One point of contention in the North Carolina tax reform debate has been the fate of one particular tax expenditure—the uncapped sales tax refund for nonprofits. The refund applies to "sales of taxable tangible personal...
- Associated Press Interviews Tax Foundation Director of State Projec...
Associated Press Interviews Tax Foundation Director of State Projects Joseph Henchman About State Budgets
By Glen Johnson
In Massachusetts, freefalling tax revenue will mean no more dental and hospice care for legal immigrants. Maryland is closing a mental health center. And Illinois has $2.9 billion in unpaid bills.
As bad as state budget-cutting was during the past year, a report issued Thursday showed it's bound to be even worse in the coming months. Despite signs of improvement in the national economy, many states' finances are still dismal. ...
All that is bad news for governors and state legislators who have been reluctant to cut deeper for fear of angering constituents.
"They want to be able to hold to the commitments they have made, so they hold onto optimistic tax forecasts. That leads to revenue shortfalls when the reality hits," said Joe Henchman of the Tax Foundation, a nonpartisan tax policy think tank in Washington.
Some states such as Indiana used rainy day and federal stimulus money "for one-time expenses while they got their house in order," he said. "But many states used this money to maintain the status quo and put off hard choices."
Illinois, he added, "taped together a temporary budget and kicked the can down the road."
In Fiscal Year 2010, state and local governments collected $441.6 billion in property taxes, comprising 23.5 percent of state and local own-source revenue. The tax exists in all...
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