COME THE DEVOLUTION, WILL STATES BE ABLE TO RESPOND

Some policymakers are concerned that many state governments will lack the fiscal capacity to assume devolved responsibilities, meet demands for traditional state services, and provide adequate aid for local gov ernments. This study evaluates the fiscal capacity, fiscal need, and t ax effort of the 50 states and the District of Columbia, following the approach developed by the U.S. Advisory Commission on Intergovernment al Relations. The study also analyzes Census and NlPA statistics to ga in insights into the capacity of states to meet the challenges and exp loit the opportunities of the new federalism.