State News Quick Hits: Red Ink Mounting in Tax Cutting States

News we cannot make up from our friends at the NC Budget and Tax Center: The North Carolina Senate wants to take a sacred public trust, the education of our children, and subject it to the whims of a voluntary funding system. After frittering away precious resources for schools by giving millionaires – among the only people who have prospered much in recent years – an income tax cut they didn’t need, the Senate now wants North Carolinians to voluntarily give back part or all of their income tax refunds so teachers can get a pay raise. A better, saner solution would be for the Senate to acknowledge reality: the tax plan that it and the House passed last year and the governor signed into law is failing the people of North Carolina – and their kids. Read more about this ridiculous plan here.

Kansas lawmakers should be prepared to see lots of red ink within the next year. Former state budget director Duane Goossen has said the state simply won’t have enough money to pay its bills. One reason Kansas is going down this path is because the state no longer taxes pass-through business income, and the price tag of the deduction is largely unknown.  Perhaps this is the evidence Kansans need to prove that Governor Brownback’s experiment has failed.

Tax Fairness advocates take heart! Kudos to Missouri Gov. Jay Nixon for coming out against a sales tax hike for transportation. The governor said, “The burden of this … sales tax increase would fall disproportionately on Missouri’s working families and seniors.” The need for increased transportation funding is real, but it makes little sense to hike the sales tax almost immediately after cutting income taxes.

Perhaps South Carolina Governor Nikki Haley hasn’t closely watched the income tax elimination debate that has sputtered to a halt in other states. If she were paying attention she would see that each of these proposals has gone  nowhere, yet she is proposing that very same thing in the Palmetto State.