Impacts of Technological Change on State and Local Budgets
Technology’s impact on government finances is already widely evident. The rapid growth in e-commerce activity alone—and the resulting impact to state and local sales tax collections—has posed challenges for many governments in recent years seeking to meet growing service demands with dwindling revenues. Recent history suggests state and local governments have been slow to adapt to changing behaviors, consumption patterns, and new industries. Looking ahead, we can only expect the rate of change to accelerate. What will the resulting impacts to state and local finances include, and how can policymakers better prepare for the future? This session will explore how major technological changes and their intersection with changing U.S. demographics might impact state and local finances in the next 5 to 15 years. We will explore not just outcomes, but the various mechanisms by which governments’ fiscal sustainability could be impacted in the near future.