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Republicans in Some States Back Off Their Party’s Longstanding Support for EITC

April 29, 2011

When President Reagan signed sweeping tax overhaul legislation that included a major expansion of the Earned Income Tax Credit, he proclaimed that “millions of working poor would be dropped from the tax rolls altogether” and called the legislation “the best anti-poverty bill” to come out of Congress. Both parties strongly favored the EITC, and bipartisan understanding of the struggles of working poor families spread to the states. Nearly half of them enacted a state EITC to complement the federal credit. But, today, the EITC no longer enjoys bipartisan support in some states, as Republicans seek to roll back or block improvements to state credits.

State EITCs Offer Low-Income Working Families a Hand Up

April 19, 2011

As we pointed out recently, roughly half the states have Earned Income Tax Credits to help low-income working families make ends meet (see map), and nearly all of them are preserving their EITCs even in the face of severe budgetary challenges. Our new report discusses how state EITCs, in concert with the federal EITC, are providing much-needed support to working families with low earnings. State EITCs play a particularly important role in the current economic climate, as many families have seen their wages or hours cut back or have lost a wage earner due to the recession. As we explain, state EITCs:

Michigan Tax Deal Kicks Low-Earning Families When They’re Down

April 13, 2011

Nearly 800,000 Michigan families learned yesterday that their taxes will go up next year to help finance a $1.8 billion business tax cut, as Governor Rick Snyder and legislative leaders announced agreement on a new tax deal that will cut taxes for 95,000 large and small businesses while eliminating the state’s Earned Income Tax Credit (EITC).

Arizona’s New Budget Is All Pain, No Gain

April 8, 2011

There’s nothing virtuous or smart about pain for pain’s sake. Unfortunately, the 2012 budget that Arizona’s legislature passed and Governor Brewer signed yesterday inflicts nothing but pain, taking an axe to state services that will harm families, businesses, and, ultimately, the state’s economy.

Q & A: Governors' Budget Proposals: The Good, the Bad, and the Ugly

April 5, 2011

Governors across the country have released their budgets for the coming fiscal year.

Erica Williams, Policy Analyst with the Center’s State Fiscal Project discusses the good, the bad, and the ugly of every governor’s budget proposal.

Governors’ Budgets Are Out, and They Aren’t Pretty

March 21, 2011

Governors across the country have released their budgets for the coming fiscal year, and while states are facing serious problems — depressed revenues, rising human needs, depleted reserves, and the end of temporary federal aid — many governors could be making much smarter choices about how to respond.

In Florida, Latest TABOR Proposal Has Same Flaw as Predecessors

February 22, 2011

For the fourth year in a row, Florida’s legislature is considering a TABOR proposal. Florida Senate Joint Resolution 958 would impose an artificial cap on state revenues that would lock in recessionary levels of spending and hurt the state’s short- and long-term ability to invest in key areas of its economy (as it did in Colorado — the only state that has implemented a TABOR).

A Bad Idea Advances in Michigan

February 9, 2011

We blogged recently that Michigan legislators were considering eliminating the state’s Earned Income Tax Credit to help close a $1.8 billion budget shortfall. Now, a state senator has introduced legislation to do just that.

Many Governors Making Unwise Choices in Budget Proposals

February 4, 2011

It's not easy being a governor these days. Revenues remain seriously depressed, human needs are rising, reserve funds are largely exhausted, and Congress plans to let its temporary federal aid expire. The basic problem remains the economy: With state tax revenues still in a deep slump due to high unemployment and weak consumer spending, states face an estimated $125 billion budget gap for the upcoming year that they have to close.

Targeting Low-Income Working Families the Wrong Way to Balance Michigan’s Budget

January 10, 2011

Michigan’s new legislative leaders offered a distressing preview last week of how they might fill an estimated $1.8 billion shortfall in the upcoming budget year. House Speaker Jase Bolger insisted that “We cannot make it more expensive . . . to raise a family in Michigan.” Nevertheless, he and other legislative leaders from both parties would make it more expensive to raise families that are working their way out of poverty by eliminating or trimming the state’s earned income tax credit (EITC).

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