off the charts
POLICY INSIGHT
BEYOND THE NUMBERS
BEYOND THE NUMBERS
For Some States, Education Cuts and Tax Cuts Go Hand in Hand
Not only have many states imposed deep funding cuts for K-12 schools since the recession hit, as our recent report explained, but most of the states that cut the deepest also cut income tax rates, reducing revenue that might have gone to schools.
Five of the seven states that have cut general school aid per student by more than 15 percent since 2008 also cut personal or corporate income tax rates during this period (see chart):
- Kansas slashed its personal income tax rates in 2012, with the top rate dropping from 6.45 to 4.9 percent, while cutting other taxes. In 2013, the state cut its top rate again. All these tax cuts will cost an estimated $3.8 billion over the next five years.
- Idaho cut its top personal income tax rate from 7.8 to 7.4 percent and its corporate income tax rate from 7.6 percent to 7.4 percent, reducing revenues this year by an estimated $35 million.
- Oklahoma cut its top personal income tax rate from 5.5 to 5.25 percent, at a cost this year of $120 million.
- Wisconsin cut personal income tax rates across the board at a cost of about $650 million over the next two years.
- Arizona cut its corporate income tax rate, phased in over several years, to 4.9 percent from 6.98 percent. This rate cut, along with other business tax cuts, cost the state about $38 million in 2012 and will cost a projected $538 million by 2018, when the cuts are fully implemented.
Topics:
Receive the latest news and reports from the Center