State Rundown 12/10: The Best Laid Plans (and Reports)

Kansas Gov. Sam Brownback bowed to reality yesterday and unveiled his plan to close the state’s self-inflicted budget gap. In true Sam Brownback fashion, his solution is to stiff highway projects and pensioners rather than reverse his disastrous tax cuts. The plan has been criticized by state leaders on both sides, since keeping your state’s roads in poor condition and your senior citizens poor is bad for economic development. Brownback’s proposal also includes smaller, though significant cuts for early childhood education programs, further showing the governor’s willingness to rob Kansas’s future to pay for unnecessary tax cuts today.

A new report commissioned for Wisconsin Gov. Scott Walker by his lieutenant governor claims that the state’s high taxes and complex tax code are a drag on economic growth. While no recommendations are made within it’s pages, the report’s conclusion represents a consensus among state business and political leaders who were included in the meetings. Not surprisingly, this consensus leaves out the thoughts of advocates for public services, educators and other Wisconsinites who must have missed the invitation to the 23 meetings held across the state. Walker seems to be taking a page from Indiana Gov. John Pence’s playbook, after Pence held a tax reform conference this past summer open to Art Laffer and Grover Norquist, but not the public.

Meanwhile, Maryland legislators held a hearing recently to discuss the fate of its tax incentive program for film production, after a damning report showed the program brings in only 10 cents for every dollar spent. The bulk of the $62.5 million in credits went to just two shows, “Veep” and “House of Cards.” The credits first generated controversy early this year, when House of Cards threatened to stop production in the state unless lawmakers put up more money. This crisis was averted after Kevin Spacey agreed to schmooze with lawmakers and pose for photos at an Annapolis wine bar. Frank Underwood would be proud.

A new report from the North Carolina legislature’s top economist reveals that state revenues are $190 million short of what was previously projected (this is on top of a previous downgrade in revenue availability for the year by $200 million). Fiscal experts in the state say the gap was caused by weak individual income tax collections and falling paycheck withholdings in the wake of last year’s tax overhaul. ITEP and our allies at the North Carolina Justice Center have been sounding the alarm for months over the huge tax cuts passed for the wealthy, arguing that their cost was wildly underestimated. Let’s hope state lawmakers don’t make up for missing revenue by cutting crucial services and making things worse.

A report commissioned by a pro-business group claims that “tax reform” would boost business in Iowa. The state tax code, according to its authors, is too cumbersome and complex, leaving investors too confused to set up shop in the state. The Chamber Alliance, which commissioned the report, will lobby the state to simplify (read: fewer brackets) and reduce (lower rates) corporate and personal income taxes. Apparently the $4.4 billion in property tax cuts and $90 million in annual income tax relief passed by state legislators last year hasn’t been enough to make the state competitive.