State Budget and Tax
Eliminating State Income Tax Not a Solution to State Tax “Volatility” Problem
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 state tax systems.
States could better address revenue volatility with such strategies as stronger reserve funds and better mechanisms for managing budget surpluses.
Related:
Basics
State and local governments are the main source of funding for K-12 education, public colleges and universities, health care, transportation, public safety, and many other services — including services for low-income and other vulnerable residents. They finance these services mostly through taxes and fees, primarily income and sales taxes. (Not every state has an income and sales tax.) Unlike the federal government, states must balance their budgets on an annual basis.
Policy Basics:
- Policy Basics: The ABCs of State Budgets
- Where Do Our State Tax Dollars Go?
- Property Tax Caps
- Tax Payer Bill of Rights (TABOR)
- State Earned Income Tax Credits
Featured Experts
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Nicholas Johnson
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Michael Leachman
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Michael Mazerov
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Elizabeth McNichol
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Phil Oliff
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Jon Shure
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Erica Williams
The Center’s State Fiscal Project works with state officials and state-based nonprofits to develop responsible budget and tax policies that take the needs of low-income families into account. We provide information and technical assistance on a variety of issues, including strengthening state tax systems, state budget priorities, and making low-income programs more effective. We also help state nonprofits understand how federal budget and tax decisions affect states and their residents.
New
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Policy Basics: State Supermajority Rules to Raise Revenues
April 22, 2013
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Strategies to Address the State Tax Volatility Problem
April 18, 2013
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Policy Basics: Where Do Our State Tax Dollars Go?
Updated April 12, 2013
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Tax Foundation Figures Do Not Represent Typical Households’ Tax Burdens
April 2, 2013
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Ryan Budget Would Shift Substantial Costs To States and Localities
March 27, 2013
- More:
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Of Interest
Tax Flight Is a Myth:
Higher State Taxes Bring More Revenue, Not More Migration
A Common-Sense Strategy for Fixing State Pension Problems in Tough Economic Times
Promoting State Budget Accountability Through Tax Expenditure Reporting
Expanding Sales Taxation of Services: Options and Issues
Pulling Apart: A State-by-State Analysis of Income Inequality
Budget Cuts or Tax Increases at the State Level: Which Is Preferable During an Economic Downturn?
The State Fiscal Analysis Initiative
The State Fiscal Analysis Initiative brings together nonpartisan, independent, nonprofit organizations in more than 30 states. These organizations have diverse backgrounds and missions, but they share a commitment to rigorous policy analysis, responsible budget and tax policies, a particular focus on the needs of low- and moderate-income families.
