This week we are bringing you news from a growing number of states with current and projected revenue shortfalls including Mississippi, Virginia, New Mexico, Oklahoma, Wyoming and Tennessee. Thanks for reading the Rundown!
-- Meg Wiehe, ITEP State Policy Director, @megwiehe
New Jersey Gov. Christie, one of the nation's most hard-line anti-tax governors, has ended a four-decades-old tax reciprocity agreement with Pennsylvania and in the process has shown he is in fact willing to raise taxes – just so long as high-income New Jerseyans are protected. Nixing the deal will raise taxes on upper-income Pennsylvanians and lower- and middle-income New Jerseyans who cross the border to go to work.
Mississippi revenues are already running behind for the new fiscal year, a particularly disconcerting sign considering lawmakers budgeted $130 million more than they expected to receive in tax revenues under normal circumstances. Meanwhile, state transportation commissioners estimate they need nearly $1 billion per year in additional funds to keep the state's infrastructure in good shape.
It appears fiscal issues will be front and center in Virginia in 2017, with Gov. McAuliffe announcing a projected $1.2 to $1.5 billion revenue shortfall this week that could be the largest in state history. The good people at The Commonwealth Institute have offered thoughtful solutions to the shortfall.
New Mexico Gov. Martinez will call a special session to deal with the state's $485 million current-year revenue shortfall sometime in September. Tensions may be high in that session, with some legislators insisting on further funding cuts and refusing to consider revenue solutions, and others arguing "We're not cutting anymore; we're amputating."
Oklahoma's Governor, Mary Fallin, decided against calling a special session to discuss teacher pay increases. Instead, the state's budget surplus will be divvied out amongst state agencies who felt the brunt of recent state spending cuts.
Wyoming lawmakers look to the sales tax as revenue from energy reliance continues to take a hit. Specifically, lawmakers are looking to end certain exemptions. The Equality State relies heavily on the sales tax, a tax that disproportionately falls on low- and middle-income families.
Tennessee's decision this year to cut taxes for its wealthiest residents by beginning a phase-out of the state's "Hall Tax" on certain dividend and interest income is already leading directly to calls for 2 percent budget cuts throughout state departments that all Tennesseans rely on.
What We're Reading...
- A study on state pension funding from Pew shows that when looking at long-term returns and contribution practices, only 15 states are contributing enough to improve the standing of their funds over time.
- Just in time for Labor Day, check out new reports on the state of working Connecticut and Pennsylvania in 2016, and Vermont's Framework for Progress.
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