Governments are coping with a soft economy and the congressional budget deficit stalemate, but there is good news, too — such as higher state and local tax revenues flowing into government coffers.

Experts from the Council of State Governments, the Heritage Foundation, the Center on Budget and Policy Priorities and other organizations offer their views on second-half 2011 government budgets and government spending.

A few of the topics we are covering: federal budgets, transportation projects, state tax revenue, local government budget trends, ARRA-funded construction and government spending.

Federal budgets

A slightly more robust economy and rising government revenues signal some improvement in government budgets for the remainder of 2011. Higher consumer spending and gross domestic product growth (albeit at a slow 1.8 percent annual rate in the January-March quarter), low inflation, higher consumer savings rates and slow but steady hiring in the U.S. work force are all signs that the economy may be coming out of its deep freeze. Read about federal budgets in the first part of this series.

Transportation projects

The odds on whether we'll have new highway funding reauthorization legislation get addressed in this section of the second-half 2011 Keating report. Michael Balsam, founder of Bear Pond Research, outlines the chances that Congress will vote on a new reauthorization bill. High-speed rail, air traffic control systems and other traffic issues are covered in this section. Read about transportation projects in the second part of this series.

State tax revenue

Recent state tax collections have yielded good news. The New York Times reported that Michigan, New Jersey, Pennsylvania, Rhode Island and Texas all tallied higher tax collections than expected. Experts from the Cato Institute, Council of State Governments and other organizations weigh in on whether the good news for state budgets will continue in the second half of 2011. Read about state tax revenue in the third part of this series.

Local government budget trends

News reports show some cities are seeing a boost in tax revenues so far in 2011. Counties, meanwhile, are losing out on mortgage-related filing fees. Experts from the Heritage Foundation and National Truck Equipment Association tell us whether local governments will be fiscally fit for the remainder of 2011. Read about local government budget trends in the fourth part of this series.

ARRA-funded construction

A Marion, Ohio road and bridge project that is being built in part with ARRA stimulus dollars is profiled in this final section of the of the second-half 2011 Keating report. Read about ARRA-funded construction in the fifth part of this series.

Government spending

Even as lawmakers debate budget cuts, government purchases of goods and services will grow a little in the remaining quarters of 2011, and expand by about 1.4 percent in 2012, according to the latest analysis from economic consultants at Macroeconomic Advisers (MA). This section will include spending breakouts by level of government and more analysis from MA. Read about government spending in the sixth part of this series.

Series Information

The Keating Report mid-year 2011 forecast on government budgets and government spending is in the June edition of Government Product News and was offered in installments at The mid-year forecast is an update of our 2011 forecast that was published in the January edition of Government Product News.

Michael Keating is senior editor for and Government Product News. He can be reached via e-mail at

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