States Shunning Tax Hikes, Unlike Past Recessions
Congressional lawmakers aren't the only ones paralyzed by partisan gridlock on issues of taxes, spending, and debt.
Democrats and Republicans in several states are locked in what are in some ways classic ideological squabbles about how much to spend on K-12 and other areas of government, as I report in a story this week. Some states are under the gun, with the fiscal year coming to a close.
Many GOP leaders have vowed to oppose any tax increase, preferring instead that states balance their books through budget cuts alone. One of the indicators of this anti-tax sentiment was provided to me by Donald Boyd, of the Rockefeller Institute of Government, who studies state and local finance.
During the recessions of the early 1980s and early 1990s, states made up for big losses in state revenue by approving tax increases, says Boyd, who drew from different sources of data in his analysis. (See graphic, below, which you can click to expand.) That has not been the case during this economic downturn, despite its severity, he notes.
States have culmulatively approved fewer tax hikes since 2009 than they did during those earlier periods. Whether states remain committed to their anti-tax policies, as schools and others part of state government clamor for help, remains to be seen.