By Jennifer Staman, Legislative Attorney
Congressional Research Service (31 Mar 11)
This report first provides a broad overview of state and local government finances and how these governments incorporate borrowing into their budget. The second section reports data on state and local government debt and how that debt has changed over time. This section includes a comparative analysis of these debt parameters for each state. The third section discusses different economic perspectives on the use of debt by governments and if governments are intrinsically biased toward borrowing more than is considered economically optimal. The discussion provides background for Congress as it deliberates potential changes in the oversight of the primary and secondary markets for state and local government debt.