BEYOND THE NUMBERS
Steps to Building State Economic Opportunity
States can take five main steps to build future economic opportunity — strategies that California, Minnesota, and Massachusetts are already pursuing to good results, I write in Bloomberg BNA’s Weekly State Tax Report.
As we laid out in our recent Fiscal Policy Agenda for Stronger State Economies report, the five steps are:
- Target public investment to boost the economy, now and in the future, by investing in areas such as education, public transportation, and water and sewage systems;
- Help struggling families share in prosperity, by strengthening and better administering supports for them and reforming economically costly immigration and criminal justice policies;
- Avoid ineffective strategies and gimmicks that can weaken a state's economy, including costly tax cuts and budget restrictions that severely limit public investment;
- Improve fiscal planning to protect investments that promote long-term economic growth through professional analyses and mechanisms that help keep the economy on course; and
- Raise revenue needed for economy-boosting investments.
As I note in my Bloomberg piece, California and Minnesota have pursued a number of these policy strategies to build their economies.
The results? Both states have improved their education systems — boosting their future prospects — while maintaining strong economic growth.
Minnesota continues to enjoy strong state finances, California voters will likely vote in November on extending the temporary personal income tax increases they approved four years ago, and another state — Massachusetts — will ask voters to decide the fate of a new measure to raise income taxes to pay for needed investments in transportation and education.
Read the full article here.