State Rundown 10/30: Ballot Measures and Bad Policy


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IMG_012214capitol_br59.J_7_1_AQ2T51MO_L72370298.JPGNPR has the latest on Kansas Gov. Sam Brownback’s implosion, noting that since his tax cuts were enacted neighboring states have seen more robust job growth, and that revenue shortfalls have been double what state officials originally projected. Politico’s Morning Tax reports that, because the state must balance its budget each year, legislators have been forced to raid highway and reserve funds, as well as close the only school in the town of Marquette. Art Laffer, architect of the Brownback cuts and supply-side partisan, told NPR that it would be nonsense to expect people to quickly adjust to Kansas’ new tax codes, and that it could take a decade to see the promised results -- so great news for Kansas schoolchildren! His take is a departure from state revenue secretary Nick Jordan, who predicted two years ago that the state would see noticeable growth in three years. Maybe 2015 will be the charm?

Speaking of disastrous tax cuts, Chris Fitzsimon of North Carolina Policy Watch wrote an op/ed in The Courier Tribune on the insanity that is North Carolina fiscal policy. He assails lawmakers for their 2013 tax breaks for corporations and the wealthy, noting, “Just three months into the new fiscal year, North Carolina has a revenue shortfall of just over $60 million and it may balloon to ten times that much before next June.” Quoting ITEP data, Fitzsimon warns that “the cost of the Robin Hood in reverse tax cut could reach $1.1 billion this year.” The cuts, initially projected to cost $513 million this year, will actually cost $704 million -- a difference of $191 million, more than enough to pay for the $109 million in education funding that the legislature cut this summer. Meanwhile, the richest 1 percent of North Carolinians received, on average, a $10,000 tax break. I guess we found out where the money for teacher’s raises went.

Zach Schiller of Policy Matters Ohio has an op/ed in The Cleveland Plain Dealer opposing Gov. John Kasich’s proposed elimination of the state income tax. His case is convincing (and not just because it features ITEP data): over the past decade, Ohio has cut its income tax rates by almost 30 percent, just to see job losses of 2 percent while national employment increased by 4 percent. Moreover, shifting the tax burden from income to sales would give the wealthiest Ohioans tens of thousands of dollars in tax cuts while increasing taxes for the bottom fifth. Schiller gets it: “Proponents of income-tax repeal need to explain: Why should we add to growing income inequality and further slant the state and local tax system against low- and middle-income Ohioans so that the affluent can pay less?”

A new poll shows that the number of Massachusetts voters who support ballot Question 1 -- a repeal of a law indexing the gas tax to inflation -- is rising. A month ago, support for repeal stood at 36 percent, while 50 percent said they would vote no on Question 1. Today, support of and opposition to the ballot measure are equal, at 42 percent. Opponents of Question 1 argue that letting the value of gas tax revenue to erode over decades, as has been the case in numerous states, leads to higher costs in the long run since necessary maintenance is deferred. They also argue that taxes set as a rate already increase with inflation, so the approach outlined in the law is not a novel one. Supporters of Question believe that taxes should not increase without legislators publicly voting to do so.

Thank you for visiting Tax Justice Blog. CTJ and ITEP staff will soon retire this domain. But ITEP staff are still blogging! You can find the same level of insight and analysis and select Tax Justice Blog archives at our new blog, http://www.justtaxesblog.org/

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