A recent budget proposal from House Republican leaders could lead to a $32 billion reduction in fiscal year 2011 funding for programs operated by state and local governments — a step that would be harmful at any time but would be extremely ill-advised at this time, with states facing unprecedented budget shortfalls and the expiration of fiscal relief from last year’s Recovery Act.
BEYOND THE NUMBERS
While states that provide special tax breaks for seniors regardless of their income may appear attractive places to retire, those tax breaks will become significantly more costly over the next few decades as the elderly’s share of the population grows, as my colleague Nick Johnson noted in a recent U.S. News & World Report blog post. Those growing costs will make it harder and harder for these states to maintain high-quality public services, which can have a big impact on quality of life in a state.
As newly elected governors confront their states’ grim fiscal reality, one promise that some of them made during the campaign should go in the trash along with the yard signs and the balloons from last night’s victory celebrations: cutting or eliminating their state’s corporate income tax.
Voters in more than half of the states elected new governors yesterday — the first time that’s happened since 1938, according to Stateline.org. But one thing hasn’t changed: states still face massive revenue problems resulting from the recession. Next year will be states’ worst budget year ever. So what will the new governors do about it?
In this podcast we will discuss how in some states people will vote today on ballot initiatives today that will significantly affect public services. I’m Shannon Spillane and I’m joined by the Deputy Director of the Center’s State Fiscal Project, Jon Shure.
In today's Q & A, we discuss how states are continuing to feel the recession’s impact with Policy Analyst Phil Oliff.
Most of the attention in this election season is going to candidates, but ballot questions in several states will greatly affect these states’ ability to maintain public services. Some of the ballot measures would make it easier for states to balance their budgets without excessive cuts in areas like education and health care. Others would make it much harder.
Kudos to sharp-eyed Seattle technology blogger Eric Engleman, who broke the news today that Texas issued a $269 million assessment against Amazon.com last month for failing to collect sales taxes on its sales in the state. Engleman spotted the disclosure in the company’s third-quarter earnings report to the Securities and Exchange Commission, which was issued yesterday.
The Rockefeller Institute of Government issued a report today that says state revenues are in a “gradual recovery” after their record decline of recent years. The new data that Rockefeller has collected for the report (on revenues for the April-June quarter) are helpful. But it’s too early to say that state finances have turned the corner.
Yesterday I posted about state budget conditions. Readers may want to know how we calculate state shortfalls. Here are the basics: