New national report: More states raising, reforming taxes to address recession
The Center on Budget and Policy Priorities released a new report yesteday that further clarifies what North Carolina lawmakers simply must do to address the current budget crisis.
Here are the key fiindings:
In response to the current recession, 16 states this year have enacted tax increases. Another 17 states are considering revenue-raising options.
This response is consistent with past practices. States often reduce taxes during economic expansions and increase them during downturns. In the recession of the early 1990s, some 44 states raised taxes; in the early 2000s, some 30 states did so.
Raising taxes reflects sound policy judgment. Tax increases can be less harmful to families and less damaging to state economies than the likely alternative: deep cuts in services.
Federal economic recovery funds are reducing the size and extent of state tax increases. But those funds are insufficient to avert the need for tax increases.
The bottom line: The state Senate was right to propose a half-billion in new revenue — even before the latest, bigger shortfall numbers came out. In contrast, the House will be placing the state on an insane, suicidal path if it persists with what appears to be its current plans –i.e. to craft a budget with two-billion dollars LESS revenue that the Senate used and NOTHING in the way of tax hikes.
At some point, tax increases (hopefully of the progressive variety) MUST be a part of the final budget deal if North Carolina wants to avoid a retreat that could damage public services and structures for decades to come.