State Budget and Tax

State Earned Income Tax Credits and Minimum Wages Work Best Together

As states continue to recover from the recession, state lawmakers should look to help working families recover, too. They can do this effectively by strengthening their states’ earned income tax credits (EITCs) and minimum wages. EITCs and the minimum wage are twin pillars of making work pay for families that earn low wages. They boost income, widen the path out of poverty, and reduce income inequality. They also help to build a stronger future economy by putting children on a better path.

Related: States Can Adopt or Expand Earned Income Tax Credits to Build a Stronger Future Economy

 

Improving State Revenue Forecasting: Best Practices for a More Trusted and Reliable Revenue Estimate

Every state estimates how much revenue it will collect in the upcoming fiscal year. A reliable estimate is essential to building a fiscally responsible budget and sets a benchmark for how much funding the state will be able to provide to schools and other public services. Yet some states forecast revenues using faulty processes that leave out key players and lack transparency

Related: Budgeting for the Future: Fiscal Planning Tools Can Show the Way

 

 

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

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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.

 

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


The State Priorities Partnership

The State Priorities Partnership brings together nonpartisan, independent, nonprofit organizations in more than 40 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.

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