A state that asks everyone, including the luckiest few, to pay their fair share during a time of historic inequality. A state with a minimum wage above the federal floor that helps boost consumer spending and power the economy. A state that has been able to avoid economically devastating budget cuts and public sector job losses by seeking responsible budget solutions.
What one word might describe a state that has adopted policies like the above to rebuild their economy? The American Legislative Exchange Council (ALEC) has one in mind: “poor.”
Progressive States Network Executive Director Ann Pratt issued a statement following the release of the jobs report showing the economy adding 233,000 private sector jobs and losing 6,000 public sector jobs in the month of February.
Conservatives have long wanted state lawmakers to believe that enacting sweeping tax cuts is the key to spurring economic growth. As most legislators across the country grapple with another year of difficult budget choices, controversial economist Arthur Laffer and the American Legislative Exchange Council (ALEC) have been pushing a comparative analysis which aims to prove that the nine states with no state income tax (Alaska, Florida, Tennessee, Washington, Nevada, Texas, South Dakota, New Hampshire and Wyoming) have dramatically outperformed the economies of the nine states with the highest income tax rates (California, Hawaii, Maine, Maryland, New Jersey, New York, Ohio, Oregon, and Vermont).
A proposal to create a state-owned bank is gaining momentum in Washington State, where a bill modeled after the successful Bank of North Dakota was introduced in January with 44 co-sponsors in the House. In a speech at the outset of the legislative session, Speaker of the House Frank Chopp called it one of the caucuses’ key priorities this year.
In the year since conservatives took control of the U.S. House of Representatives and legislative bodies in states across the nation, we’ve seen them move their agenda with alarming disregard for both democracy and the economic security of the nation. From the irresponsibly provoked debt ceiling “crisis” to the wholesale obstruction of job creation efforts, conservatives on the national stage took an approach of reckless political brinksmanship over the past year that put the entire economy at risk. And from Wisconsin to Alabama and beyond, 2011 saw conservatives in the states—buoyed by support from their corporate allies in the 1%—launch attack after attack on workers, women, voters, and immigrants. But the new year brings new hope for progressives looking to turn the tide—hope that, for the time being, largely resides not in the halls of Congress but in the 50 states.
Facing another round of deep cuts to health care and education as a result of ongoing revenue shortages caused by the slow economic recovery, and on the heels of a new national survey reporting that most state budgets have now seen spending fall below pre-recession levels, some states are signaling that they will be pursuing more balanced approaches to their budget troubles in 2012 than they have in previous years.
As the Occupy Wall Street movement spreads across the nation and occupations promise to continue into the winter months, the physical presence of the protesters and their effective communication of the widely shared concerns of “the 99%” about the consolidation of wealth and political power is already having a significant impact on the public debate. Reeling from Occupy-inspired criticism and watching as hundreds of thousands of their customers move their money to smaller banks and credit unions, big banks like Bank of America this week backtracked on their plans to institute yet another proposed fee for debit card use. With gridlock in Congress continuing, the most significant political impact of the Occupy protests may ultimately be felt in statehouses, where the renewed national focus on the consequences of historic levels of inequality are showing signs of revitalizing prospects for a host of progressive economic policies, including one key demand of the protests: asking the 1% to pay their fair share.
Most states have hundreds of tax expenditures on their books, ranging from tax credits to reduce poverty to exemptions benefiting homeowners to business subsidies. Some of these expenditures, like a sales tax exemption on groceries, have a broad social benefit and enjoy widespread public support. Yet the benefits of others, which are often created for specific companies or industry sectors while purportedly incentivizing local economic growth or job creation, are less clear. Many states have exemptions and credits that are decades old and in some cases outdated or underperforming, with no laws in place to review them and assess their actual impact in local communities. However, another year of severe revenue shortages and deep budget cuts now has many states scrutinizing the true value of these preferential tax treatments.