State Budget and Tax Archive
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Policy Basics: State Supermajority Rules to Raise Revenues
April 22, 2013
Legislatures in most states (34 states plus the District of Columbia) can approve tax bills with a simple majority vote in each house, the same margin required for practically every other bill. In the other 16 states, some or all tax bills require a supermajority vote of each house (plus the … -
Strategies to Address the State Tax Volatility Problem
April 18, 2013
State revenues plummet in recessions, just when states can least afford the loss. Some proposals to address this flaw in state tax systems would change the systems’ structure — for instance, by replacing state personal income taxes with sales taxes — but wouldn’t solve the problem and would exacerbate others in … -
Policy Basics: Where Do Our State Tax Dollars Go?
Updated April 12, 2013
With state revenues still deeply damaged by the recession, policymakers continue to confront major choices about how to pay for important services now and in the future. To inform this crucial decision making, it is useful to examine where state tax dollars go as well as changing trends over time.… -
Tax Foundation Figures Do Not Represent Typical Households’ Tax Burdens
April 2, 2013
The Tax Foundation released its annual “Tax Freedom Day” report today that, once again, can leave a strikingly misleading impression of tax burdens — showing an average federal tax rate across the United States that’s likely higher than the tax rate that 80 percent of U.S. households actually pay. To project the day … -
Ryan Budget Would Shift Substantial Costs To States and Localities
March 27, 2013
The budget that House Budget Committee Chairman Paul Ryan developed and the full House passed recently would cause federal support for services that state and local governments provide — schools, health care, clean water facilities, and law enforcement, for example — to decline precipitously over the next several years. … -
State Personal Income Tax Cuts: A Poor Strategy for Economic Growth
March 21, 2013
Policymakers in a number of states including Arkansas, Kansas, Missouri, North Carolina, Ohio, and Wisconsin are promoting deep cuts in personal income taxes as a prescription for economic growth — an approach that has not worked particularly well in the past and is not supported by the preponderance of the … -
Media Briefing: Examining States’ Dramatic Higher Education Cuts and Tuition Increases
March 19, 2013
The Center on Budget and Policy Priorities held a conference call briefing to discuss the deep cuts almost every state has made to public universities and colleges, and explains how those cuts hurt students and state economies.
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Recent Deep State Higher Education Cuts May Harm Students and the Economy for Years to Come
March 19, 2013
As states prepare their budgets for the coming year, they face the challenge of reinvesting in public higher education systems after years of damaging cuts — the product of both the economic downturn and states’ reluctance to raise additional revenues. In the past five years, state cuts to higher education funding … -
States Made Deep Cuts to Higher Education, New Report Finds
March 19, 2013
Public universities and colleges in nearly every state have seen their state funding decline sharply, according to a new report from the Center on Budget and Policy Priorities. Nationwide, states are on average spending 28 percent less this year than they did in 2008, a decrease of $2,353 per student. As a result, colleges and universities have had to … -
State Taxes on Inherited Wealth Remain Common:
Updated March 12, 2013
Taxes on inherited wealth are a traditional and common revenue source for states. Prior to the passage of the federal estate tax cut in 2001, every state levied an estate tax that allowed them to “pick up” a share of federal estate tax revenues. The state “pick-up” estate taxes did not increase total estate … -
Strengthening State Fiscal Policies for a Stronger Economy
Updated March 11, 2013
Strengthening state economies and creating jobs — now and into the future — will require sensible, forward-looking state fiscal policies. States need to invest adequately in education, health care, transportation, and workforce development. To do that, they need to generate sufficient revenue, and they need to do so … -
Cutting State Personal Income Taxes Won’t Help Small Businesses Create Jobs and May Harm State Economies
February 19, 2013
Cutting state personal income taxes not only won’t promote small business growth and job creation, but it is also likely over time to threaten the success of entrepreneurs by taking resources away from critical services like education. Until recently, most proposals to cut state taxes in the name of boosting economic growth and job … -
Policy Basics: Taxpayer Bill of Rights (TABOR)
Updated February 15, 2013
A Taxpayer Bill of Rights or TABOR is a constitutional measure that limits the annual growth in state and local revenues to the sum of the inflation rate and the percentage change in the state’s population. (For example, if the general inflation rate is 2 percent and the state’s … -
Four Big Threats to State Finances Could Undermine Future U.S. Prosperity
February 14, 2013
Without adequate revenues, states and localities cannot continue providing public services like education, health care, and infrastructure that lay the groundwork for a prosperous future. But state revenue systems face four serious challenges. The most severe recession in seven decades blasted holes in state budgets from … -
ALEC Tax and Budget Proposals Would Slash Public Services and Jeopardize Economic Growth
February 12, 2013
Governors and legislatures in numerous states are considering, or have recently enacted, sweeping tax and budget proposals that follow recommendations of the American Legislative Exchange Council (ALEC), with potentially adverse consequences for middle- and lower-income families, individuals, and communities across the country. These policies … -
Policy Basics: The ABCs of State Budgets
Revised February 7, 2013
States are slowly recovering from an unprecedented budget crisis that resulted from the recent recession and the greatest decline in state tax revenues on record. Below is some background on the fundamentals of state finances and the depth of the problems that states face today. The Budget … -
Testimony of Jared Bernstein, Senior Fellow, Before the House Education and Workforce Committee
February 5, 2013
Chairman Kline and ranking member Miller, I thank you for inviting me to testify today on issues directly in the wheelhouse of this committee: education, skills, and jobs. My testimony begins by looking at the current jobs situation with an emphasis on educational investments. I then discuss ways in which recent budget cuts are threatening the … -
States Can Opt Out of the Costly and Ineffective “Domestic Production Deduction” Corporate Tax Break
Updated January 31, 2013
Over the past few years, states have faced large budgets gaps caused by a dramatic decline in revenue collections since the start of the recession. One contributor to this fiscal crisis in many states has been a relatively new corporate tax break — one that in most states never even received a vote in the state legislature but … -
2013 Is a Good Year to Repair (if Not Replenish) State Rainy Day Funds
January 15, 2013
The last decade’s roller-coaster economy has highlighted the importance of state “rainy day funds” — budget reserves for when recessions or other unexpected events cause revenue declines or spending increases. States with rainy day funds were able to avert over $20 billion in cuts to services and/or tax … -
States Should Embrace 21st Century Economy by Extending Sales Taxes to Digital Goods and Services
December 13, 2012
States are losing more and more revenue each year from a failure to require the payment of sales taxes when goods and services are sold and delivered online. The tax-exempt status in many states of “digital goods and services” — a fast-growing sector of the economy that ranges from movie downloads to online dating services to … -
Fact Sheet: Reducing Federal Deficits Without a Significant Revenue Increase Would Shift Substantial Costs to States
December 6, 2012
If it fails to include significant new revenues, a major legislative package to shrink federal deficits would almost certainly make substantial cuts in federal funds that support states and localities. These cuts likely would force states and localities to reduce the quality and reach of their basic public systems — schools, clean … -
Deficit-Reduction Package That Lacks Significant Revenues Would Shift Very Substantial Costs to States and Localities
Updated December 5, 2012
If it fails to include significant new revenues, a major legislative package to shrink federal deficits would almost certainly make deep cuts in federal funds that support states and localities as they perform many basic public functions, including educating children, building roads and bridges, protecting public health, and providing law … -
Policy Basics: State Earned Income Tax Credits
Updated December 5, 2012
Twenty-five states (counting the District of Columbia) have created earned income tax credits (EITCs) to help families struggling to get by on low wages, make ends meet, and provide basic necessities for their children. These credits build on the benefits of the federal EITC, offering a hand up to … -
Media Briefing: Examining Wide and Growing Income Gaps in the States
November 15, 2012
The Center on Budget and Policy Priorities and the Economic Policy Institute held a joint conference call briefing on Wednesday, November 14, 2012 to discuss a major new state-by-state report on income inequality. -
Pulling Apart: A State-by-State Analysis of Income Trends
November 15, 2012
A state-by-state examination finds that income inequality has grown in most parts of the country since the late 1970s. Over the past three business cycles prior to 2007, the incomes of the country’s highest-income households climbed substantially, while middle- and lower-income households saw only modest increases. During the … -
Wide and Growing Income Gaps in Most States, New Report Finds
November 15, 2012
The gaps between the incomes of the richest households and low- and middle-income households are wide and growing in most states, according to a major new report from the Center on Budget and Policy Priorities and the Economic Policy Institute that examines inequality at the state level. Across all states, the average income of the richest fifth of households was … -
Statement of Nicholas Johnson, Vice President for State Fiscal Policy, on Defeat of “TABOR” Amendment in Florida
Updated November 7, 2012
Florida voters yesterday resoundingly rejected the crippling and arbitrary spending limit known as TABOR, showing once again that such limits remain unpopular around the country. Anti-government groups have made serious efforts to enact TABORs through both ballot measures and legislation … -
Florida’s “Amendment 4” Would Cause Tax Rate Increases and Deep Local Service Cuts, Likely Harming the State’s Economy
September 25, 2012
Amendment 4, which appears on the ballot in Florida in November, would lock a deeply flawed set of property tax changes into the state’s constitution, leading to tax increases for large numbers of Florida residents, a competitive disadvantage for new and emerging businesses, and significant cuts in local services — while producing … -
Amendment 4 Would Cost Florida Jobs, Raise Taxes on Year-Round Residents, and Force Cuts in Public Services
September 25, 2012
Amendment 4 would cost the state jobs and lead to both tax increases for large numbers of Florida residents and cuts in local services such as police and fire protection, according to a new report from the Center on Budget and Policy Priorities. The measure, on the Florida ballot in November, also would put new and emerging businesses at a competitive … -
Amendment 3 Would Undermine Florida’s Schools and Universities, Health Care, and Roads
September 13, 2012
Amendment 3 will hinder Florida’s efforts to strengthen its economy if voters adopt it, according to a new report from the Center on Budget and Policy Priorities. The measure, which the Florida Legislature placed on the ballot for this November, would impose rigid limits on state spending, forcing cuts to education, roads and highways, health care and … -
Florida’s Amendment 3 Would Cut Funds for Schools, Health Care, Roads, and Other Services
September 13, 2012
Funding for Florida schools, universities, roads and bridges, health programs for children and the elderly, public transit, and a wide range of other public services will fall significantly if voters enact Amendment 3 on Florida’s November statewide ballot. This constitutional amendment would severely limit the amount of state … -
New School Year Brings More Cuts in State Funding for Schools
Updated September 4, 2012
States have made steep cuts to education funding since the start of the recession and, in many states, those cuts deepened over the last year. Elementary and high schools are receiving less state funding in the 2012-13 school year than they did last year in 26 states, and in 35 states school funding now stands below 2008 levels … -
How Health Reform’s Medicaid Expansion Will Impact State Budgets
Revised July 25, 2012
Shortly after the Supreme Court ruled that states can choose whether to adopt the health reform law’s Medicaid expansion to cover low-income parents and other adults, some governors declared that they will forgo the expansion, claiming it would place a heavy financial burden on their states.[1] Claims that states will bear a … -
States Continue to Feel Recession’s Impact
Updated June 27, 2012
As a new fiscal year begins, the latest state budget estimates continue to show that states’ ability to fund services remains hobbled by slow economic growth. The budget gaps that states have had to close for fiscal year 2013, the fiscal year that begins July 1, 2012, total $55 billion in 31 states. That amount is smaller … -
Some Basic Facts on State and Local Government Workers
Updated June 15, 2012
This brief report presents some basic facts about state and local employees: the jobs they perform, how many there are, how their pay compares with pay in the private sector, and how much states and localities — mainly school districts, cities, and counties — spend on pay and benefits. Who Are Public Employees? By far … -
New CBO Report Finds Hundreds of Thousands of People Still Owe Their Jobs to the Recovery Act
Updated May 29, 2012
A new Congressional Budget Office (CBO) report estimates that the American Recovery and Reinvestment Act (ARRA) increased the number of people employed by between 200,000 and 1.5 million jobs in March.[1] In other words, between 200,000 and 1.5 million people employed in March owed their jobs to the Recovery Act. This estimate, … -
“Digital Goods and Services Tax Fairness Act” Would Impair Funding for Education, Health Care and Other State and Local Services
May 29, 2012
The proposed Digital Goods and Services Tax Fairness Act of 2011 would immediately and significantly reduce state and local tax collections, and these revenue losses would accelerate in the future. The Act (DGSTFA, S. 971/H.R. 1860) would restrict sharply the ability of state and local governments to levy sales and gross receipts taxes … -
Testimony of LaDonna Pavetti, Ph.D. Vice President, Family Income Support Policy, Before the House Ways and Means Committee, Subcommittee on Human Resources, Hearing on "State TANF Spending and its Impact on Work Requirements"
May 17, 2012
Good afternoon Chairman Davis, Ranking Member Doggett, and distinguished members of the Subcommittee. Thank you for inviting me to testify on the relationship between TANF State maintenance-of-effort (MOE) requirements and their interaction with work requirements. I am Vice President for Family Income Support Policy at the Center on … -
North Dakota's Measure 2 is Reckless and Misguided
May 15, 2012
A proposal to amend North Dakota's constitution to ban property taxes would lock North Dakota into a risky, uncharted course of action and leave the state's schools at the mercy of the highly volatile oil industry, according to a new report from the Center on Budget and Policy Priorities, a Washington, DC-based policy research institution. "North Dakota has … -
North Dakota's Measure 2: High Risk For Little Reward
May 15, 2012
A proposal on the June 12 primary ballot would amend North Dakota's constitution to ban property taxes, a highly imprudent experiment that would fail to maximize the benefits of today's oil-driven economic boom to improve the state for future generations. The list of dangers posed by Measure 2 is long. It would: Lock North Dakota into … -
What if Chairman Ryan’s Medicaid Block Grant Had Taken Effect in 2001?
April 20, 2012
House Budget Committee Chairman Paul Ryan’s proposal to convert Medicaid to a block grant, which the House recently passed as part of Chairman Ryan’s overall budget plan, would have cut federal Medicaid funds to most states by more than 35 percent by 2010 — and to several of them by more than 50 percent — if it had been … -
Out of Balance
April 18, 2012
The state budget gaps of the last five years led to $290 billion in cuts to public services and $100 billion in tax and fee increases. Those actions lengthened the recession and delayed the recovery. Because spending reductions were dominant, hundreds of thousands of jobs were lost; undermining education, health care and other state … -
The Impact of State Income Taxes on Low-Income Families in 2011
Revised April 17, 2012
The successful bipartisan effort over the last two decades to reduce state income taxes on working-poor families has stalled and is in danger of reversing. No new states exempted working-poor families of four from income taxes in 2011, and in almost all of the 15 states where such families still pay income taxes, they saw their income taxes increase. … -
Press Release: Hawaii Among Worst States in Nation on Taxing the Working Poor
April 4, 2012
Unlike most states, Hawaii taxes working-poor families deeper into poverty, and it charges them higher tax bills than all but four other states, according to a new report from the Center on Budget and Policy Priorities. "Hawaii should help working families work toward the middle class rather than undermine their … -
The Texas Economic Model: Hard for Other States to Follow and Not All It Seems
April 3, 2012
Whatever its boosters may say, Texas is not a helpful model for economic growth for the rest of the country. True, the number of people and jobs in Texas has been expanding, causing other states to wonder whether Texas holds important lessons for state policies that can generate similar growth elsewhere. The answer is no. Texas has … -
Tax Foundation Figures Do Not Represent Typical Households’ Tax Burdens
April 2, 2012
This report has been updated. Click here for the updated analysis. The Tax Foundation released its annual “Tax Freedom Day” report today that, once again, leaves a strikingly misleading impression of tax burdens — announcing an “average” tax rate across the United States that’s likely higher than the tax … -
Federal Government Will Pick Up Nearly All Costs of Health Reform’s Medicaid Expansion
Updated March 28, 2012
For updated data, view this report: How Health Reform’s Medicaid Expansion Will Impact State Budgets July 12, 2012 Claims that states will bear a significant share of the costs of the Affordable Care Act’s (ACA) Medicaid expansion — and that this will place a heavy financial burden on states — do not hold up under scrutiny. … -
Proposed Kansas Tax Break for “Pass-Through” Profits Is Poorly Targeted and Will Not Create Jobs
Revised March 26, 2012
Kansas is seriously considering a new, unprecedented state income tax break — at a huge cost to the state budget — that would benefit large corporations and passive investors, and reward tax avoidance, while failing to meet its stated objective of job creation. The tax break was first proposed by Governor Brownback earlier this year, … -
Higher Property and Sales Taxes Likely if Kansas Eliminates Income Tax
March 22, 2012
Kansans likely would face higher sales and property taxes if the state legislature moves forward with efforts to eliminate the state income tax, according to a report released today by the Center on Budget and Policy Priorities, a non-partisan policy research organization based in Washington, DC. Elimination of the state income tax also would undermine the … -
Without A State Income Tax, Other Taxes Are Higher
March 22, 2012
States without an income tax have higher sales or property taxes, on average, than states with an income tax. No-income-tax states have property taxes that are 8 percent to 12 percent above the national average and sales taxes 18 percent to 21 percent above the national average. These data are of particular relevance in … -
New CBO Report Finds Up to Two Million People Still Owe Their Jobs to the Recovery Act
Updated February 24, 2012
View the most recent version of this report: New CBO Report Finds Hundreds of Thousands of People Still Owe Their Jobs to the Recovery Act Updated May 29, 2012 A new Congressional Budget Office (CBO) report estimates that the American Recovery and Reinvestment Act (ARRA) increased the number of people employed by between 300,000 and 2 million jobs … -
Testimony: Michael Mazerov, Senior Fellow, State Fiscal Project Before The Maryland Senate Budget And Taxation Committee Regarding Senate Bill 269 — Combined Reporting
February 22, 2012
Chairman Kasemeyer and members of the Committee, I am Michael Mazerov, Senior Fellow with the State Fiscal Project of the Center on Budget and Policy Priorities in Washington. The Center is a non-profit, non-partisan research institute that focuses on federal and state budgets, programs, and tax policies, with a particular emphasis on how they … -
Using Economic Census Data to Estimate the Revenue Impact of Taxing Services
February 15, 2012
Public finance experts have long identified the failure of states to collect sales taxes on most services purchased by households as a major shortcoming of state tax systems. A 2009 Center report lays out the case for expanded sales taxation of services, including its potential to mitigate erosion of the sales tax base and improve the fairness of … -
Testimony: Phil Oliff, Policy Analyst, Before the Maryland House Ways and Means Committee
February 14, 2012
Madam Chair, Vice Chair, and Members of the Committee, thank you for the opportunity to testify here today. My name is Phil Oliff. I am a Policy Analyst with the Center on Budget and Policy Priorities. The Center is a nonpartisan, nonprofit organization that conducts research and … -
Six Reasons Why Supermajority Requirements to Raise Taxes Are a Bad Idea
February 13, 2012
A few states are considering amending their constitutions to make it even harder to close tax loopholes and otherwise change the tax code to raise more revenue. The proposed amendments would require that revenue-positive tax changes win support from supermajorities of each house of the legislature plus the governor’s signature, rather than the normal … -
Improving Budget Analysis of State Criminal Justice Reforms: A Strategy For Better Outcomes and Saving Money
January 11, 2012
Issued Jointly With An increasing number of states are considering criminal justice reforms proven to protect the public and produce significant cost savings. For example, some states are offering effective addiction treatment to more people convicted of drug-related crimes instead of incarcerating them. Other … -
General Assistance Programs: Safety Net Weakening Despite Increased Need
Updated December 19, 2011
State General Assistance programs, which provide a safety net of last resort for those who are very poor and do not qualify for other public assistance, have weakened considerably in recent decades and are continuing to do so, despite the large increase in need resulting from the recession. This report discusses how General Assistance Programs … -
Slideshow: The State Budget Crisis and the Economy
Updated December 19, 2011
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Senate’s Balanced Budget Amendment Could Force Deep Cuts in Aid to States
December 14, 2011
The Republican-sponsored version of a constitutional balanced budget amendment, which the Senate voted on today, would require enormous federal budget cuts, very likely resulting in dramatic reductions in federal grants to states and localities for services ranging from education to highway maintenance to public safety. The attached … -
New CBO Report Finds Up to 2.4 Million People Owe Their Jobs to the Recovery Act
Updated November 23, 2011
View the most recent version of this report: New CBO Report Finds Hundreds of Thousands of People Still Owe Their Jobs to the Recovery Act Updated May 29, 2012 A new Congressional Budget Office (CBO) report estimates that the American Recovery and Reinvestment Act (ARRA) increased the number of people employed by between 0.4 million and 2.4 million jobs … -
TANF Benefits Fell Further in 2011 and Are Worth Much Less Than in 1996 in Most States
November 21, 2011
Cash assistance benefits for the nation's poorest families with children fell again in purchasing power in 2011 and are now at least 20 percent below their 1996 levels in 34 states, after adjusting for inflation. While most states froze benefit levels in 2011, six states and the District of Columbia cut them, reducing … -
The Impact of State Income Taxes on Low-Income Families in 2010
November 15, 2011
The successful bipartisan effort over the last two decades to reduce state income taxes on working-poor families has stalled and is in danger of reversing. No new states exempted working-poor families from income taxes in 2010, and in most of the 15 states where such families still pay income taxes, they saw their … -
The Current Services Baseline: A Tool for Understanding Budget Choices
October 21, 2011
When governors and legislative bodies put forward state budget proposals, they almost always recommend changes in state policies, such as increases or reductions in the number of people eligible for state services, alterations in formulas used to fund schools and local governments, changes in staffing levels, and so on. To … -
New School Year Brings Steep Cuts in State Funding for Schools
Updated October 7, 2011
To view the updated paper see: New School Year Brings More Cuts in State Funding for Schools Elementary and high schools are receiving less state funding than last year in at least 37 states, and in at least 30 states school funding now stands below 2008 levels – often far below. These cuts are attributable, in part, to the failure of the federal … -
PAYGO: Improving State Budget Discipline While Retaining Flexibility
September 22, 2011
States can help policymakers and the public understand the consequences of budget decisions and properly weigh the long-term impact of alternative proposals by adopting important budget management tools that also promote fiscal responsibility. The cornerstone of these tools is "pay-as-you-go" (PAYGO), a requirement that the … -
Raising Medicare’s Eligibility Age Would Increase Overall Health Spending and Shift Costs to Seniors, States, and Employers
August 23, 2011
Raising Medicare's eligibility age from 65 to 67, which the new Joint Select Committee will likely consider this fall as a deficit-reduction measure, would not only fail to constrain health care costs across the economy; it would increase them. While this proposal would save the federal government money, it would do so by shifting costs … -
Proposed “Digital Goods and Services Tax Fairness Act” Likely to do More Harm Than Good In Current Form
August 11, 2011
The Digital Goods and Services Tax Fairness Act of 2011 (S. 971/H.R. 1860) would regulate state and local taxation of downloaded music and movies and online services like photo storage and payroll processing. One section of the legislation — a set of so-called "sourcing rules" specifying which … -
Case for Regulating State and Local Taxation of Digital Goods and Services has Little Merit
August 11, 2011
A bill before Congress, the Digital Goods and Services Tax Fairness Act of 2011 or DGSTFA (S. 971/H.R. 1860), would regulate states' and localities' taxation of downloaded music, movies and online services like photo storage and payroll processing. Though proponents of the legislation claim that it is needed to … -
Tax Flight Is a Myth
August 4, 2011
Executive Summary Attacks on sorely-needed increases in state tax revenues often include the unproven claim that tax hikes will drive large numbers of households — particularly the most affluent — to other states. The same claim also is used to justify new tax cuts. Compelling evidence shows that this claim is … -
Podcast: Tax Flight Is a Myth
August 4, 2011
"Attacks on sorely-needed increases in state tax revenues often include the unproven claim that tax hikes will drive large numbers of households - particularly the most affluent - to other states. The same claim also is used to justify new tax cuts. Compelling evidence shows that this claim is false. The effects of tax increases on migration are, at most, small - so small that states that raise income taxes on the most affluent households can be assured of a substantial net gain in revenue."
Duration: 1:54
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Video Podcast: Tax Flight Is a Myth
August 4, 2011
"Attacks on sorely-needed increases in state tax revenues often include the unproven claim that tax hikes will drive large numbers of households - particularly the most affluent - to other states. The same claim also is used to justify new tax cuts. Compelling evidence shows that this claim is false. The effects of tax increases on migration are, at most, small - so small that states that raise income taxes on the most affluent households can be assured of a substantial net gain in revenue."
Duration:1:49
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State Budget Cuts in the New Fiscal Year Are Unnecessarily Harmful
Updated July 28, 2011
The cumulative effect of four consecutive years of lagging revenues has led to budget-cutting of historic proportions. An analysis of newly enacted state budgets shows that budget cuts will hit education, health care, and other state-funded services harder in the 2012 fiscal year – which started July 1, 2011 – than … -
Better-Than-Expected State Tax Collections Highlight Importance of Income Taxes
July 11, 2011
State revenues—especially income tax collections—are beginning to recover from the worst recession since the 1930s, but they still have a long way to go. At least 28 states have reported that tax collections for the just-ended fiscal year will exceed the amount expected when their budgets were adopted last spring. … -
New Fiscal Year Brings Further Budget Cuts to Most States, Slowing Economic Recovery
June 28, 2011
States have enacted deep cuts in education, health care, and other important public services in their budgets for fiscal year 2012 (which begins July 1 in most states). It is the fourth year in a row of budget-cutting for states, and the 2012 cuts are deeper than in past years. Of the 32 states that have enacted budgets, as … -
Camp-Hatch Proposal Would Harm Long-Term Unemployed and Weaken Recovery
June 13, 2011
Legislation from House Ways and Means Chairman Dave Camp and Senate Finance Committee Ranking Member Orrin Hatch would rescind the federal government’s commitment to provide unemployment insurance (UI) benefits through 2011 to Americans who have been out of work for more than half a year and are still looking for a job. Their bill … -
Promoting State Budget Accountability Through Tax Expenditure Reporting
Updated May 24, 2011
Each year states spend tens, maybe hundreds, of billions of dollars through “tax expenditures.” Tax expenditures are tax credits, deductions, and exemptions that reduce state revenue. They can include everything from poverty-reducing tax credits, to middle-class benefits, to corporate subsidies. Tax expenditures … -
Federal “Business Activity Tax Nexus” Legislation: Half of a Two-Pronged Strategy to Gut State Corporate Income Taxes
Updated May 13, 2011
Major multistate corporations are engaged in a two-pronged lobbying strategy aimed at substantially increasing the share of their nationwide profit that is not taxed by any state. The strategy involves the enactment of complementary state and federal legislation. The state legislation — which corporations have already … -
A Common-Sense Strategy for Fixing State Pension Problems in Tough Economic Times
May 12, 2011
Restoring underfunded state and local workers’ pension programs to full fiscal health is a long-term goal for state policymakers that should be accomplished with moderate, common-sense steps, rather than drastic measures that could imperil states’ economic recoveries. Today’s pension shortfalls were caused in substantial … -
Testimony: Iris Lav on the Transparency and Funding of State and Local Pensions
May 5, 2011
Mr. Chairman, Mr. Lewis, and members of the committee, I appreciate the invitation to appear before you today. I would like to make six related points in my testimony: Most state and local employees receive modest pension benefits, for which both they and their employers contribute annually during their working years. … -
Proponents' Case for a Federally-Imposed Business Activity Tax Nexus Threshold Has Little Merit
Updated April 27, 2011
A bill under consideration in the U.S. House of Representatives would strip states of their current authority to tax a fair share of the profits of many corporations that are based out-of-state but do business within their borders. The Subcommittee on Courts, Commercial and Administrative Law of the House Judiciary Committee held a … -
An Arizona “TABOR” Would Endanger Education, Public Safety, and Infrastructure
April 19, 2011
The Arizona legislature is considering a new, very rigid limit on state spending. The limit would closely resemble a Colorado limitation known as the Taxpayer Bill of Rights or TABOR. An Arizona TABOR would make it very difficult for future Arizona legislatures and governors to meet the state’s obligations in … -
A Hand Up: How State Earned Income Tax Credits Help Working Families Escape Poverty in 2011
April 18, 2011
Summary The federal Earned Income Tax Credit, which began in 1975 and has been expanded several times since then, is often heralded as the most effective anti-poverty program in the United States, particularly for children in working families. In 2009 alone, it lifted 6.5 million working families, including 3.3 million children, out … -
States Can Avert New Revenue Loss And Protect Their Economies by Decoupling From Federal Expensing Provision
Updated April 14, 2011
A recent change in federal tax law regarding business investment in machinery and equipment could be very costly for many states and hurt their economies. Eighteen states are on track to lose $4.6 billion in state corporate and individual income tax revenues during the current and next two state fiscal years: some … -
Proposed “Business Activity Tax Nexus” Legislation Would Seriously Undermine State Taxes on Corporate Profits And Harm the Economy
Updated April 13, 2011
A bill recently reintroduced in the U.S. House of Representatives would strip states of their current authority to tax a fair share of the profits of many corporations that are based out-of-state but do business within their borders. Representative Bob Goodlatte reintroduced the “Business Activity Tax Simplification Act” … -
Tax Foundation Figures Do Not Represent Typical Households’ Tax Burdens
April 12, 2011
This report has been updated. Click here for the updated analysis. Executive Summary Each year, the Tax Foundation releases a report projecting “Tax Freedom Day,” which it describes as the day when Americans will have “earned enough money to pay this year’s tax obligations at the federal, state, and local levels.” [1] The Tax … -
State and Local Governments Should Close Online Hotel Tax Loophole and Collect Taxes Owed
April 12, 2011
State and local governments throughout the United States are losing roughly $275 million to $400 million in revenue each year because of their failure to ensure that online travel companies like Expedia, Orbitz, and Priceline collect and remit the appropriate amount of tax on hotel room bookings. Online travel companies (OTCs) typically pay applicable … -
What if Ryan's Medicaid Block Grant Had Taken Effect in 2000?
April 12, 2011
House Budget Committee Chairman Paul Ryan’s radical proposal to convert Medicaid to a block grant, which the House will consider this week as part of Ryan’s sweeping budget plan, would have cut federal Medicaid funds to most states by more than 25 percent by 2009 and to several of them by more than 40 percent if it … -
Podcast: Governors' Budgets Proposals: The Good, the Bad, and the Ugly
April 5, 2011
Erica Williams, Policy Analyst with the Center’s State Fiscal Project discusses how proposed budgets put forth by many governors would greatly harm their states residents.
Duration: 3:17
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Podcast: Radical Medicaid Proposals Could Add Millions to Ranks of Uninsured
March 24, 2011
Edwin Park, Vice President for Health Policy, discusses how Medicaid block grant proposals would harm seniors, children, and people with disabilities, as well as states.
Duration: 4:59
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Governors are Proposing Further Deep Cuts in Services, Likely Harming Their Economies
Updated March 21, 2011
All of the 48 states releasing initial budget proposals for fiscal year 2012 (which begins July 1 in most states) have done so, and for the fourth year in a row, these budgets propose deep cuts in education, health care, and other important public services — in many cases, deeper than previous cuts. [1] These cuts will delay the … -
Podcast: Basic Facts About State and Local Workers
March 17, 2011
Liz McNichol, Senior Fellow with the Center’s State Fiscal Project discusses the facts about state and local workers: who they are, what they do, and how their pay compares to their private sector counterparts.
Duration: 3:37
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Proposed Public Employee Pension Reporting Requirements Are Unnecessary
March 15, 2011
In February, Congressmen Devin Nunes and Darrell Issa (both California Republicans) and Paul Ryan (R-Wis) introduced legislation (H.R. 567) to require states and local governments to report their pension liabilities to the federal government using what is known as a “riskless rate” — an interest rate tied to … -
Podcast: Tax Cuts Worsening Wisconsin’s Budget Problems
March 1, 2011
Nick Johnson, Vice President for State Fiscal Policy discusses the budget situation in Wisconsin.
Duration: 4:18
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Media Briefing: Medicaid, Health Reform, and the States
February 28, 2011
Judith Solomon, Vice President for Health Policy, Edwin Park, Vice President for Health Policy, and Robert Greenstein, the Center’s President, will discuss proposals to block grant the Medicaid program and repeal its maintenance of effort requirements.
Duration: 20:00
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A Balanced Approach to Closing State Deficits
Updated February 25, 2011
As states head into their fourth year of fiscal crisis, most continue to face severe revenue shortfalls that require closing huge deficits. [1] As they prepare and consider budgets for the upcoming fiscal year, which begins July 1, 2011 in most states, the choices they make about how to close those deficits have serious … -
Florida “TABOR” Proposal SJR 958 Would Endanger Education, Public Safety, and Infrastructure
Updated February 22, 2011
The Florida legislature is considering a TABOR proposal, SJR 958, to limit the growth in state revenues by the combined rate of inflation and population growth. The measure would: Immediately and over the long term raise Florida’s cost of borrowing to invest in infrastructure, costing the state potentially tens of … -
Press Release: State Unemployment Insurance Systems Need Major Reforms to Avoid Employer Tax Increases, Deep Benefit Cuts for Jobless Workers
February 9, 2011
Issued Jointly With Many states’ systems for financing unemployment insurance (UI) are broken and, without major reforms, will remain broken, requiring years of high federal taxes on employers and threatening UI’s role as a key economic stabilizer during recessions, according to a major new report … -
Testimony: Iris Lav, Senior Advisor, Before the House Oversight Committee Subcommittee on TARP, Financial Services and Bailouts of Public and Private Programs
February 9, 2011
Mr. Chairman, Mr. Quigley, and members of the committee, I appreciate the invitation to appear before you today. A spate of recent articles regarding the fiscal situation of states and localities have lumped together their current fiscal problems, stemming largely from the recession, with longer-term issues relating to debt, … -
An Update on State Budget Cuts
Updated February 9, 2011
See the following reports for more up-to-date data: State Budget Cuts in the New Fiscal Year Are Unnecessarily Harmful, July 28, 2011 New School Year Brings Steep Cuts in State Funding for Schools, October 7, 2011 With tax revenue still declining as a result of the recession and budget reserves largely drained, the vast majority of states have … -
Podcast: Troubling Trends in Governors’ Budget Proposals
February 8, 2011
Erica Williams, policy analyst with the Center’s State Fiscal Project, discusses troubling trends in governors’ new budget proposals.
Duration: 4:16
