Huh? Did you say our state tax revenues grew by 1.8%? Why don't we tell everyone they "plummeted"!
Never let a good pandemic go to waste!
The Unnecessary State Covid Bailout
Governors plead poverty even as tax revenue is rolling in.
By The Editorial Board
Feb. 24, 2021 6:41 pm ET
Democrats in Congress are planning to ladle out another $350 billion to state and local governments, though many haven’t finished spending their Cares Act checks and some are running budget surpluses. This is income redistribution for public unions.
About one third of the $150 billion that Congress allocated in direct aid to state and local governments last spring still hasn’t been spent. These funds were intended to help governments cover pandemic needs amid budget shortfalls, but most haven’t needed it.
Research outfit Wirepoints recently estimated that
44 states are running surpluses for fiscal years 2020 and 2021 when Covid relief and budget reserves are included. The six outliers: New York, New Jersey, Illinois, Maryland, Hawaii, Nevada. They have pre-existing spending problems or rely heavily on tourism.
Nearly half of states rolled in more tax revenue in calendar year 2020 than 2019, according to the Reason Foundation. On average, state revenues were a mere 0.01% lower across the board.
Seventeen state treasurers recently moaned to Congress that “tax revenues have plummeted,” but collectively they’ve seen
a 1.8% increase year-over-year, the Kansas Policy Institute reports.
Gov. Andrew Cuomo recently warned of a $15 billion budget deficit and threatened to raise New York’s top income tax rate to 14.7%—the nation’s highest—though New York’s revenues were down a mere 1.5% from 2019. He refuses to renegotiate union contracts or cut spending.
Illinois Democrats warned of a budget doomsday to frighten voters into enacting a progressive tax last November, but the measure failed and state revenues were 0.9% lower than in 2019. Gov. J.B. Pritzker last week said improved revenues would spare schools from spending cuts. Yet he’s proposing to slash the tax-credit scholarship program that helps low-income kids attend private schools.
Some private schools have increased enrollment because they have remained open while unions have kept public schools closed. Yet Democrats want to punish low-income families seeking better educational options.
New Jersey’s revenue in 2020 was 0.4% lower than the year before, though Democrats in Trenton last fall raised the top income tax rate on earners making more than $1 million to 10.75% from 8.97%—retroactively to January 2020. Too bad for millionaires who lacked the foresight to escape to Palm Beach in 2019.
To his credit,
Connecticut’s Democratic Gov. Ned Lamont has opposed a push by state legislators to raise taxes on the well-to-do and instead froze state worker pay. “Why would you want to raise taxes when you don’t have to?” he recently said. Revenue in Connecticut was down 1.2% year-over-year in 2020.
Federal stimulus has propped up state spending. Most blue states have progressive income tax structures and have benefited from booming asset prices, especially equities.
California has a $15 billion surplus. Revenue last month was $3.7 billion (17%) higher than in January 2020. Democrats are now planning to spread their surplus around.
Gov. Gavin Newsom on Tuesday signed a $7.6 billion state-funded Covid spending bill that includes $600 payments to individuals earning up to $30,000.
Undocumented immigrants could qualify for checks up to $1,200. Businesses will also get $2.1 billion in grants and fee waivers, which is only fair since they were forced to shut down much of last year.
Democrats in Washington like those in Sacramento are trying to obtain political relief for themselves.
Most federal funds to state and local governments will invariably flow into higher union pay, pensions and benefits and other payouts to buy votes. The two defeats in the Georgia Senate runoffs are costing Republicans and American taxpayers many times over.
https://www.wsj.com/articles/the-unn...ut-11614210064
Plead Poverty and Pass the Champagne Please!
