Moody’s warns New York State that it could downgrade its credit if the state does not address its structural deficit.
Overoptimistic revenue projections in Washington State have led to a gap opening up in the current budget (altogether, a 3.3% reduction from the previous budget). Democratic members of the Legislature are softening up the ground for taxA tax is a mandatory payment or charge collected by local, state, and national governments from individuals or businesses to cover the costs of general government services, goods, and activities.
increases, suggesting new taxes on cigarettes and candy. A leading Republican proposes privatizing the state-run liquor stores.
Students at University of California campuses protest a 32% fee increase (tuition, though it’s not called that, will rise to $10,302 a year). University Regents have requested $913 million from the state to avoid the increase and enrollment cuts.
The California Legislative Analyst’s Office explains that California’s deficit is structural and requires “very difficult choices about state priorities” and that “major state spending programs will have to be significantly reduced.” The report includes a number of suggestions.
Beneficiaries of Michigan’s film tax creditA tax credit is a provision that reduces a taxpayer’s final tax bill, dollar-for-dollar. A tax credit differs from deductions and exemptions, which reduce taxable income, rather than the taxpayer’s tax bill directly.
plead with the state not to axe it. The subsidies, some of the most generous in the country, cost the state about $150 million per year. Rep. Peter Lund argues that the credits aren’t building anything permanent in the state, quipping, “virtually any industry, from ‘chicken dinners in Frankenmuth’ to cars, would prosper in Michigan if the state agreed to cover 42% of its costs.”
Detroit votes to borrow $250 million to pay this year’s operating expenses. The loan will be repaid over 20 years. The state must still approve the loan.
One rumor is that the 2001-03 tax cuts targeted for expiration will be repealed a year ahead of schedule, effective January 1, 2010, but passed later in the year and made retroactive.