Policymakers in South Carolina learned late last week that the state will likely face a budget deficit of some $430 million heading into FY 2009. A number of states will have to close budget gaps in the coming fiscal year -- in part because critical sources of revenue growth have slowed with the cooling housing market. But South Carolina has brought some of this problem on itself. As the Bureau of Economic Advisors -- the body responsible for the latest budget projection -- indicates, one of the three largest factors contributing to the likely deficit is the $240 million in tax cuts enacted this summer.
News like this should give elected officials in Utah some pause. According to the Deseret Morning News, legislators there are already talking about using a projected $400 million budget surplus to cut taxes once again. Yet, as the News points out, that surplus may exist only because Utah's budget projections have not yet been updated to account for previously enacted tax cuts. In other words, some elected officials want to use these surpluses, which may not even exist because of previous tax cuts, to fund more tax cuts. Anti-tax politicians with this kind of mindset like to portray themselves as conservative, but this kind of behavior can only be described as reckless