what’s going on in other states? deep recession and slow recovery many states enacting substantial...

What’s Going On in Other States?

• Deep Recession and Slow Recovery

• Many States Enacting Substantial Tax Cuts (ex: Kansas and North Carolina)

Kansas 2013 Tax Changes

• Cut Personal & Corporate Income Taxes

• Raised the Sales Tax

• Cut Tax Credits for Low-Income Families

Kansas Raised Taxes for Lower-Income Families and Cut Them the Most for the Richest

Tax Revenues Are Down in Kansas, Rising in Most States

Kansas Added Jobs More Slowly Than the U.S. as a Whole Since the Tax Cuts Took Effect

North Carolina 2013 Tax Changes

• Cut Personal & Corporate Income Taxes

• Expanded the Sales Tax

• Capped the Gas Tax

• First State to Eliminate its EITC

North Carolina Raised Taxes for Lower-Income Families and Cut Them the Most for the Richest

Lowest 20%

$12,000

Second 20%

$25,000

Middle 20% $41,000

Fourth 20%

$67,000

Next 15%

$113,000

Next 4%

$236,000

Top 1%

$940,000

0.2% 0.2% 0.2%0.1%

-0.1%

-0.4%

-1.1%

Impact of North Carolina’s 2013 tax changes, as a share of income

North Carolina Tax Revenues Projected to Fall by $650 million Upon Full Implementation

Tax Cuts Have Consequences

• Substantial Cuts to K-12 Education

• Cuts to 2- and 4-year Public Colleges

• Reduced Access to Health Care

Wages for Low-Paid Workers Same as 40 Years Ago

Poverty Remains High

What Can States Do?

• Make Investments in Health, Education, and Fighting Poverty

• Boost the Minimum Wage

• Earned Income Tax Credit

Earned Income Tax Credit

• Currently in Place in Twenty-Five States

• Helps Families Make Ends Meet

• Encourages and Rewards Work

• Actively Fights Poverty

OPEN & ACCOUNTABLE BUDGETS

• Every state budget should have:

A Map for the Future

Professional & Credible Estimates

Ways to Stay on Course

Mississippi Fails to Plan Ahead

• No Multi-Year Revenue/Spending Forecasts

• Sporadic and Low-Quality Fiscal Notes

• No Estimates for Continuing Current Levels of Services