State Budget and Tax

Lessons for Other States from Kansas’ Massive Tax Cuts

Tax cuts enacted in Kansas in 2012 were among the largest ever enacted by any state, and have since been held up by tax-cut proponents in other states as a model worth replicating. In truth, Kansas is a cautionary tale, not a model.

As other states recover from the recent recession and turn toward the future, Kansas’ huge tax cuts have left that state’s schools and other public services stuck in the recession, and declining further — a serious threat to the state’s long-term economic vitality.

Meanwhile, promises of immediate economic improvement have utterly failed to materialize. Report | Press release

 

The Top 5 (Okay, 6) State Tax Charts

The first chart (below) shows that more than half of state tax dollars go to fund education (K-12 and higher education) and health care. State tax dollars also fund other critical services such as transportation, corrections, public assistance, care for residents with disabilities, police, state parks, and general aid to local governments.

View the other featured charts

Related:  Tax Day Roundup, 2014

 

Basics

State and local governments are the main source of funding for K-12 education, public colleges and universities, health care, transportation, public safety, and many other services — including services for low-income and other vulnerable residents.  They finance these services mostly through taxes and fees, primarily income and sales taxes.  (Not every state has an income and sales tax.)  Unlike the federal government, states must balance their budgets on an annual basis.

Policy Basics:
- Policy Basics: The ABCs of State Budgets
- Where Do Our State Tax Dollars Go?
- Property Tax Caps
- Tax Payer Bill of Rights (TABOR)
- State Earned Income Tax Credits

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The Center’s State Fiscal Project works with state officials and state-based nonprofits to develop responsible budget and tax policies that take the needs of low-income families into account.  We provide information and technical assistance on a variety of issues, including strengthening state tax systems, state budget priorities, and making low-income programs more effective.  We also help state nonprofits understand how federal budget and tax decisions affect states and their residents.

 

Of Interest

Tax Flight Is a Myth:
Higher State Taxes Bring More Revenue, Not More Migration

A Common-Sense Strategy for Fixing State Pension Problems in Tough Economic Times

Promoting State Budget Accountability Through Tax Expenditure Reporting

Expanding Sales Taxation of Services: Options and Issues

Pulling Apart: A State-by-State Analysis of Income Inequality


The State Fiscal Analysis Initiative

The State Fiscal Analysis Initiative brings together nonpartisan, independent, nonprofit organizations in more than 30 states. These organizations have diverse backgrounds and missions, but they share a commitment to rigorous policy analysis, responsible budget and tax policies, a particular focus on the needs of low- and moderate-income families.

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