2011 presents states with a stark choice: austerity and inequality or progress and growth. This Dispatch will address three key progressive policy options for legislators to promote economic security by rebuilding prosperity in the states: Corporate Transparency, Progressive Tax Reform and Revenue Generation, and proactive Economic Development policies.
This past week, Illinois lawmakers approved legislation to raise the state corporate and personal income tax. In explaining the need for the effort, Gov. Pat Quinn explained that the state's "fiscal house was burning." Indeed, faced with a revenue shortfall of $15 billion, legislators garnered the political will to enact sensible means to generate sorely-needed revenue.
As states confront collective shortfalls amounting to almost $140 billion in the coming year, progressive leaders face an enormous challenge in building support for necessary investments, even as the general public has grown skeptical of the ability of government to deliver on its promises. To counter this dynamic, progressives are championing several innovative and sound policies to protect taxpayers, promote economic security, support the interests of the middle class, and ensure sound investments in public structures and local communities.
In the wake of last week's results, progressives must continue to pursue policies to promote economic growth and equity, address revenue shortfalls through sound tax reform, alleviate the burden on working families, and support public programs. This is especially necessary as conservatives in legislatures and governor's seats are promising a slew of heinous cuts to state programs and several other fiscally irresponsible proposals.
On Tuesday, in addition to electing federal, state, and local officials to a new term, voters in 37 states will decide on approximately 160 ballot measures, including statewide initiatives, proposed amendments to state constitutions, and legislative and popular referenda. The total number of ballot measures across the nation is down this year from recent highs in midterm election years - according to the Ballot Initiative Strategy Center, there were 224 ballot measures nationwide in 2002 and 226 in 2006.
Debunking the Myth of the Overcompensated Public Employee - This Economic Policy Institute
analysis demonstrates that state and local public employees are under
compensated. On average, state and local government workers receive
3.75 percent less compensation than comparable private sector employees.
On top of that, the benefits public employees receive do not offset the
lower wage rate.
Recession Hits Workers’ Paychecks: Wage growth has collapsed- Wages are growing at less than half the rate they were before the recession, according to this Economic Policy Institute report. The report recommends providing fiscal relief to states to preserve government and private-sector jobs, while raising the minimum wage.
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.
The fundamental challenge in this recession is that the growth that
preceded it was a mirage. Bubble era borrowing created a network of
financial jobs, real estate jobs and construction jobs that collapsed
with the end of the bubble. Many of those jobs will never return.
An extremely high proportion (75%) of job losses in this recession are
permanent rather than temporary. States will need to nurture
completely new industry sectors and the infrastructure to support those
jobs, while the jobless will need retraining in new skills to
participate in those sectors.