We always hear about a government shutdown every few years, and sometimes it happens and sometimes it gets resolved. I never hear about state and local governments.

What happens if a state or local government can’t agree on a budget?

10 comments

  2. It’s going to vary from place to place. In Wisconsin, it essentially would never happen. The budget has to be balanced and a failure to pass a new budget means the old budget remains in place.

  3. In North Carolina, if a new budget is not passed, the state continues to operate on the previous budget. Budgets are usually passed on a two year basis, and in off years a “short session” of the general assemble will sometimes make tweaks to the budget.

    We should have had a new budget passed prior to the start of the new fiscal year in July but they have yet to pass a budget so the state is operating under the previous budget currently. North Carolina can not operate on a budget deficit like the federal government can.

  4. Depends on the state or local government’s rules. I don’t live there anymore, but North Carolina (where I grew up) had a provision where if a new budget is not passed then the previous year’s budget is used instead.

  5. Happened years ago in PA. I’m not sure individual municipalities can shut down but PA state def did. Cousin who works for the state was paid IOUs and took out a loan to pay bills.

  6. Used to happen regularly in CA — until we passed a referendum that state legislators would not get paid until they did their jobs and passed a damn budget already. No problems since.

  7. Most states have balanced budget laws that either automatically cut budgets or raise taxes without any legislative input.

    Only a couple states have perennial budget problems. Many wind up running modest income surpluses, which are either balanced out with tax cuts in the next year, or expended in community grant projects.

  8. If town meeting doesn’t pass a budget, then state law limits what can be spent. Things that relate to necessary public health and safety will continue, but others (like libraries and recreation committee) won’t. I’m not sure about schools.

  9. Absolutely. Illinois had a republican governor and a democratic state legislature that refused to cooperate and they shut down the state government for 3 years. As a result local taxes went up to fill in the gaps, and they never came back down. I lived in a wealthy school district and we had to cancel a bunch of after school activities, a poorer school district next to us was talking about moving to 4 days a week as a way to save money.

Leave a Reply
You May Also Like