The Tax Policy Blog

January 05, 2009

The IRS sent James Howarth a bill for 5 cents and demanded he pay. Then they sent him a refund notice for 4 cents but said he'd have to request payment since it was under $1. He tried to call to sort it out but couldn't get a live person. Now he doesn't know what to do. Just stamping the envelope is 42 cents, after all.

Hat tip:...

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January 04, 2009

I recently appeared on C-SPAN's Washington Journal to discuss the economic situation facing the states and how individual states are dealing with budgets and related tax issues. Click here to watch the video.

Below is each state's situation in more detail; these blog posts have been going up over the past two weeks and here they are all together. Stay tuned for more analysis and reporting on...

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January 03, 2009

Alaska Gov. Sarah Palin (R) has proposed a 7 percent spending cut in the $11.2 billion budget to close a $402 million shortfall (the comparison does not count $746 million in checks mailed out last year from windfall profits tax proceeds). Alaska's general fund derives much of its revenue from oil revenue and taxes, and the budget assumes...

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January 03, 2009

Alabama Gov. Bob Riley (R) has announced hiring freeze (reducing state workers from 39,000 to 36,000); a ban on merit raises; travel curtailment; and a cut to spending in a targeted manner by 10 percent. Education, which faces a $795 million shortfall, will be cut across-the-board by 12.5%,...

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January 03, 2009

Arkansas Gov. Mike Beebe (R) has introduced a balanced $4.4 billion budget, including $145 million in unfunded spending, and a $30 million cut in the sales tax on groceries from 3 percent to 2 percent (the general sales tax is 6 percent). The budget also proposes adding $120 million to the state's rainy day fund over the next two years.

More...

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January 03, 2009

Negotiations recently broke down between Arizona Gov. Janet Napolitano (D) and the legislature over $400 million of spending cuts to the $9.9 billion budget. Officials estimate a $1.2 billion shortfall. In the last five years, Arizona's government spending has grown at twice the rate of inflation and population increases...

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January 02, 2009

In mid-December, Delaware Gov. Ruth Ann Minner (D) announced $55 million in budget reductions to partly reduce a $109 million shortfall in the current $3.4 billion budget, including a $23 million accounting trick shifting Medicaid payments from the end of the month to the beginning. The...

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January 02, 2009

In November, Connecticut legislators held a special session and approved $71.8 million in cuts (plus a tax amnesty program expected to generate $40 million, but lawmakers rejected a move to seize $40 million in unclaimed deposits on bottles and cans). Since then, the shortfall in the current biennium's $18 billion budget...

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January 02, 2009

In November, Colorado Gov. Bill Ritter (D) unveiled a $19.2 billion budget proposal for 2009-10, of which the general fund portion is a 5% increase over 2008-09. The proposal includes a $386 million shortfall. Ritter estimates that the state faces a shortfall in the current year's budget of $77 million, but...

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January 02, 2009

California's budget hasn't been balanced in a decade, with each year involving some combination of accounting tricks and borrowing to paper over the shortfall (now estimated to be $15 billion this year and $25 billion next year, out of a $103 billion annual general fund budget). In 2004, voters approved $15 billion in long-term borrowing to pay for short-term expenses, but the accompanying spending controls were...

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January 02, 2009

Phil Kerpen, Director of Policy at Americans for Prosperity, penned an op-ed in today's Washington Times on a potential reauthorization of the State Children's Health Insurance Program (SCHIP) being funded by a 156% increase...

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January 01, 2009

Idaho Gov. C.L. "Butch" Otter (R) in December ordered state agencies to cut 3% from their budgets, on top of a 1% reduction ordered in September, and plan for a 6% cut in 2010. The $82 million savings, in addition to $22 million of other cuts, balances ...

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January 01, 2009

Hawaii Gov. Linda Lingle (R) recently unveiled a $22.4 billion 2010-11 biennial budget that reduces discretionary funding by 14%, draw down $75 million from the state's rainy day fund (leaving it at $15 million in 2011), and borrow from bottle/can deposits and...

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January 01, 2009

State officials say that Georgia faces a $1.6 billion to $1.8 billion shortfall in its current $21 billion budget. Gov. Sonny Perdue (R) has ordered agencies to cut spending by 8% and plan for cuts in their 2010 budget requests. Perdue has unveiled plans for...

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