State Tax Snapshot: Can’t Buy Me Love?


It would be reasonable to think that happy and harmonious times would be ahead for state lawmakers in 2014. For the first time since the Great Recession, the states are experiencing relative prosperity. Also, the governor’s office and legislatures in several states are overwhelmingly controlled by the same party.  

But even members of the same party can disagree with how money should be spent.

Picture a family recovering from the Great Recession to explain the states' fiscal positions, Scott Pattison, executive director of the National Association of State Budget Officers (NASBO) told Bloomberg BNA Jan. 14.

Both parents are back in the workforce and they received unexpected raises from their jobs, but they won't necessarily be able to immediately repay the money they raided from the college funds and they will still have to make monthly payments on the home equity loan they took out instead of paying it all off, said Pattison. The extra funds will enable states to “discuss should we have tax cuts, additional programmatic funding,” such as pre-kindergarten, “and whether they can restore some of the tax cuts from the past,” he said. 

Pattison’s observations, which appeared in Bloomberg BNA’s State Tax Outlook, were validated by two recent stories about fiscal feuds brewing in New York, California, and other states. Some of the budget disputes were ignited by a Democratic governor seeking tax cuts (e.g., New York) or a Republican governor advocating for more money for teachers (e.g., Missouri), according to a story in the New York Times.

 Then there’s Wisconsin, where a Republican governor is at odds with members of his own party over his plan to enact an aggressive tax cut, notes an article by the Pew Organization’sStateline. 

The fact that it’s an election year in many states will only add fuel to the fire.

Continue the discussion on BBNA State Tax Group on LinkedIn: Will 2014 be the year of the “family feud”? Or will states such as New York enact important tax reform measures?

By Steven Roll

Follow me on Twitter at @Roll_StateTax

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