Tax and Budget Reform

Intuit, a private firm that manufactures TurboTax, has pushed California lawmakers to eliminate the popular, successful, and cost-effective public tax filing services, ReadyReturn and CalFile. These two programs offer millions of low- and middle-income Californians a free and reliable method to calculate and file taxes.

Right-wing officials have consistently expressed opposition to the federal recovery effort, even as they take credit for the American Recovery and Reinvestment ACT's (ARRA) impcat on economic growth. The combination with promoting budget-busting tax cuts while bemoaning the deficit just adds to the hypocrisy of rhetoric on the right.

When state governments make it nearly impossible to raise taxes to pay their bills, their creditors apparently get very nervous and increase their costs to borrow money. Both Arizona and California have seen their bond ratings downgraded -- and their borrowing costs likely increasing -- with analysts citing both states' tax limitation rules that require a two-thirds vote of their legislatures to raise taxes as one reason.

This week, the U.S. Senate finally overcame a filibuster by conservative Senators to move emergency Medicaid funding through the first half of 2011 and provide key funding for education jobs. This action is critical for state budgets and will protect both medical services and education programs in states across the country. Unforuntately, due to over-hyped deficit concerns, the total cost of the package is offset by spending cuts, including an $11 billion cut in Food Stamps, along with closing a tax loophole for multinational corporations.

When big bank speculation crashed the economy, millions were driven into unemployment.  But, according to a new study by two leading economists, the combination of the Troubled Asset Relief Program (TARP) loans to banks, loosening of the money supply, and federal stimulus funds for states and individuals, helped stop a far worse potential full-out Depression that would have left an additional 8.5 million Americans without jobs on top of the 8 million who have lost their jobs since the recession started-- what would have been a nearly doubling of the job loss due to the economic crisis.

Since he took office earlier this year, New Jersey Gov. Chris Christie has waged an ideological war on state employees and programs, and advocated for unsustainable and costly privatization schemes.  Even in light of overwhelming public opposition to privatization and the significant pitfalls associated with these types of initiatives, the Governor established a privatization task force by executive order in early April, seeking to identify $50 million in savings.

On June 15, voters in Trenton, New Jersey, soundly rejected a proposal to sell a majority of Trenton Water Works' infrastructure, including pipes, water towers, and tanks, to a private company. For several years, Trenton Mayor Douglas Palmer argued that water privatization would generate immediate revenue for the cash-strapped city and end its obligation to maintain aging infrastructure in surrounding townships. Community activists, unions, and the Stop the Sale campaign, successfully challenged the Mayor's plan. In the weeks leading up to the vote, polling indicated that 95 percent of city residents disapproved of the initiative.

The challenge for progressives from this “states rights” movement is not that any of these laws are likely to survive in court, but that conservatives too often get away with claiming to stand for constitutional values without significant challenge from progressives.  The reality is that the right wing has no credibility in promoting their states’ rights arguments and should be challenged more directly.  As this Dispatch will outline, their arguments fail on multiple grounds:

• First, conservative constitutional history is dead wrong.  The progressive vision of collaborative federalism between federal and state governments clearly reflects the “original intent” of the Constitution’s creators  – including those who promoted the Constitutional Amendments enacted throughout our history.
• Second, conservative leaders are constitutional hypocrites, talking about “states rights” even as they support federal laws that restrict state authority in order to protect corporate special interests. 
• Finally, unlike conservatives, progressives practice real respect for state authority by promoting and supporting state innovation and flexibility, a far more compelling practice of federalism than the rigid and false constitutional doctrine promoted by the right wing.

 

This past Tuesday, Maine votersconsidered legislation which would have reformed the state's tax structure and bond measures that will bolster infrastructure investment.By a large margin, Mainers rejected a law passed last June, LD1495, to lower the top income tax rate from 8.5 percent to 6.5 percent for state residents earning less than $250,000 annually by broadening the sales tax to include different services and shifting tax burden to nonresidents by increasing the meals and lodging tax from 7 to 8.5 percent.

State governments may seek additional funding for up to three additional years on broadband projects. The announcement comes from the National Telecommunications and Information Administration (NTIA) who recognized that "better data and strategic planning are needed on the state level.