Exploiting These Loopholes, States Can Mask Their Huge Deficits (1)

As state finances across America are upended by the coronavirus, almost all of them face the same, self-imposed, problem: How to balance their budgets.

Forty-nine out of 50 U.S. states have adopted some kind of balanced-budget requirement that forces them to raise taxes or cut spending if revenues fall short of projections — in theory. Vermont is the only exception.

In practice, however, elected officials have found various ways to get around them over the years. And as costs related to Covid-19 mount, the temptation to take advantage of those fiscal-planning loopholes will only grow.

“The rules are not ironclad,” ...