As the world continues to evolve, the challenges of public budgeting are only set to increase. Aging populations, climate change, and cybersecurity concerns are just a few of the emerging trends that could impact state budgets and all public spending plans in the coming years.
The Pew Trusts project on “Managing Fiscal Risks” highlights these challenges and provides ways for fiscal leaders to effectively manage future budget challenges. Crafting a state budget involves estimating spending needs, predicting revenue trends, and balancing competing priorities to maintain a structurally balanced budget. However, with these new risks on the horizon, it’s important for fiscal leaders to look ahead and plan for the future.
In an article by Peter Muller, a former non-partisan fiscal official, we learn about the revenue effects of these emerging trends. An aging population will require more healthcare spending, while climate-related spending needs will continue to rise as states work to mitigate the impacts of climate change. Cybersecurity concerns will also require states to invest in new technologies and infrastructure to protect their systems from attacks.
To address these challenges effectively, states must proactively plan and manage their budgets. This means considering potential risks and developing contingency plans to ensure that their budgets remain sustainable in the long term. By doing so, they can better prepare for future challenges and ensure that their citizens have access to the services they need.