“State and local government total expenditures amount to $2.9 trillion in the United States. While this is less than the federal government’s $4.3 trillion of expenditures, nearly two-thirds of federal total expenditures are transfers (either to individuals or state and local governments). This means that state and local governments have in some respects a more prominent role in decision-making than the federal government. Indeed, state and local governments make key investment decisions—about infrastructure, education, and many other areas—that help determine the long-run capacity of the entire economy.
Mobility across states has declined sharply in the United States, and one reason appears to be that land-use restrictions in economically successful regions make it difficult for many workers to move to these locations. Similarly, transportation resources are not always efficiently allocated, making it more difficult for workers to access high-quality jobs.
This document provides context for policy proposals in the form of nine economic facts about how state and local policies matter for growth. These facts highlight how rigorous cost-benefit analysis, optimal transportation policy, and land-use rules can affect access to opportunity.”