Fiscal Impacts of the Opioid Crisis on State and Local Governments

Robert Bifulco and Iuliia Shybalkina

The ANNALS of the American Academy of Political and Social Science, 2022, vol. 703, issue 1, 324-349

Abstract: Adverse effects of the opioid crisis on individuals influence the need for state and local government expenditures and erode their tax bases. Systematic estimates of the magnitude of such fiscal impacts are lacking. We estimate the magnitude of the effect of the opioid crisis on state and local expenditures and discuss approaches that might be taken to evaluate the impact of the crisis on revenues. We find that the fiscal impacts of the opioid crisis on state and local governments are modest for the U.S. as a whole but are likely to be greater in states with particularly high rates of opioid-use disorders. Our analysis aims to encourage and guide more in-depth studies in the future. Such studies can inform intergovernmental aid policies designed to offset the fiscal impacts of opioid misuse and can also contribute to assessing damages in opioid lawsuits.

Keywords: opioid epidemic; state and local government; fiscal impact; economic cost; health care expenditures; criminal justice expenditures; income tax revenue (search for similar items in EconPapers)
Date: 2022
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Persistent link: https://EconPapers.repec.org/RePEc:sae:anname:v:703:y:2022:i:1:p:324-349

DOI: 10.1177/00027162221137171

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