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Tax and Budget Reform

PSN 2011 Tax and Budget Roundup: Middle Class Reels From Extreme Cuts, Damaging Right-Wing Fiscal Priorities

Lawmakers confronted massive budget shortfalls, persistently high unemployment, and myriad fiscal and economic obstacles during 2011 state legislative sessions. With states still reeling from effects of the economic downturn and with federal investment in state economies receding, lawmakers considered drastic measures to confront budgetary constraints. Though many state revenue outlooks improved slightly in the past few months, partly as a result of tax increases passed in recent years, it was little comfort as states faced collective shortfalls of $103 billion in fiscal year 2012. As sessions progressed, it became painfully apparent that conservative lawmakers were not interested in job creation, economic growth, or support for those who have been hit hardest by the recession, but rather ideologically-driven platforms that sacrificed fiscal sustainability and the economic security of millions of families for the benefit of the affluent and huge corporations.

More Corporate Welfare: Another Tax Holiday for Overseas Profits Proposed

As 2011 legislative sessions draw to a close, many states continue to wrestle with budget shortfalls. Some adopted responsible measures this session to rebuild prosperity through a balanced approach that included revenue generation, while others went down a destructive path relying exclusively on job-killing cuts. The same revenue debate that played out in the states is now coming to a boil in Washington D.C. as policymakers consider ways to raise revenue to address the federal deficit — including one misguided proposal that would result in more corporate welfare and provide little benefit for the nation’s economic security.

Property Tax Cap Proposal a Misguided Approach for New York

New York Governor Andrew Cuomo recently announced a misguided compromise with conservatives in the state legislature to place a hard cap on the annual growth of property tax revenues. The cap would limit revenue growth to the lesser of a 2% annual increase or the rate of inflation. The only exception would require a restrictive super-majority vote of 60% in municipalities where the residents wish to opt out of the program. If passed into law, this proposal will lead to a drastic reduction in essential services for hardworking New York families and place an additional burden on middle class communities which have already been battered by the economic downturn.

Right-Wing Lawmakers Override Governor’s Veto of Economically-Damaging Budget Bill

Labeling conservative lawmakers' fiscal priorities as a harbinger of "generational damage," North Carolina Gov. Bev Perdue vetoed the Republican-dominated Legislature's $19.7 billion budget proposal this past week. The Governor became the first in state history to veto a budget bill, finding that the Legislature's proposal "ignores the values of North Carolina’s people." Right-wing state legislators, deciding against extending a temporary one cent sales tax, opted for heinous cuts to several important areas, most notably, health care and K-12 and higher education. Assessing the potential economic impact of such extensive and damaging reductions to essential public programs, the North Carolina Budget & Tax Center concludes that the budget would have extremely deleterious repercussions on the state's economic well-being and prospects for recovery. So much so, that the cuts would lead to the loss of 32,022 jobs, $1.3 billion in lost wages for workers, and $2.8 billion in foregone industry output.