The right to access (and ultimately spend) public sector savings is determi
ned by the party which can control the political outcome. This implies that
anticipated future changes in the state's controlling political party may
systematically adversely affect current savings. Extending the Life Cycle/P
ermanent Income model, I show that a representative legislator will opt to
forgo current saving in favor of spending when his prospects for future pol
itical control diminish. Estimating a panel data model of 39 states from 19
73-1995, I find that an actual future change in the controlling party of a
state's lower house significantly reduces current saving.