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I thought this
report and links below would be of interest to several on this list, especially
Arthur, who has written a book on the subject of cyber taxes, as well as others
on FW who are involved and/or following e-government development. Oregon, btw,
was listed as at Significant Risk in this report. Coincidentally, the Oregonian
editorialized today that Portlanders, usually generous about taxes,
were losing faith that income taxes could sustain schools. Oregon has no sales
tax. Measure 5 here did to school financing what Prop 13 did in California, but
we haven’t recovered from it yet. Creative
options, like cell phone taxes, are being considered as partial remedies while
schools, recreational parks, basic services such as fire and police systems are
being affected. In another
sign of contradictions inherent in these changing times is the city of Portland
just passed measures to establish public campaign financing for mayoral,
commissioner and auditor candidates. Other states such as Maine have had broader
‘clean campaign’ laws for much longer, demonstrating that taxation and public financing
is a busy patchwork quilt, no easy task to synchronize efficiently. Lest we forget,
all these are pebbles in the stream compared to the boulders blocking revenue
channels: the Bush tax cuts and the cost of war. - KwC Report: States face long-term budget gaps States' failure to
modernize their tax systems to reflect the shift from a manufacturing to a
service-based economy puts many at risk for chronic budget gaps, according to a
May 17 report from the Center on Budget and Policy Priorities, a
Washington, D.C., think tank that focuses on policies that affect the poor.
The report said Alaska, Arkansas, Colorado, Florida,
Nevada, New Mexico, Pennsylvania, South Carolina, Tennessee, Texas, and Wyoming
face the greatest risk of a "structural deficit," which the Center defines as a
chronic inability to grow state revenues in tandem with growth in state
government expenses or the state’s economy. The
states rated as best-positioned financially are Minnesota, Nebraska, New Jersey, North Dakota, Vermont and
Wisconsin, where expenditures are reportedly least likely to annually outpace
revenues. The report, titled
"Faulty Foundations: State Structural
Budget Problems and How to Fix Them," includes a state-by-state analysis of the factors that put each state at
risk for a structural deficit. Most states' failure to tax services, coupled
with the rapid growth in Internet purchases - the vast majority of which escape
state sales tax - are a prime cause of states' inability to keep pace with
growing expenses, according to the report. Other factors
include shrinking corporate income tax revenue, antiquated personal income tax
brackets, federal restrictions on state taxing authority and state-imposed tax
and spend limits. The report
highlights states' responses to factors that put them at risk for a structural
deficit, such as Virginia's recent decision to phase out income-tax exemptions
for pension incomes and Nebraska's effort to expand its sales tax base to
include services. It concludes
that serious budget problems loom even though states' revenues are on the
upswing as the nationwide economy recovers from the 2001 recession. "With the
fiscal crisis easing in most states, states can take the initiative to
modernize and strengthen their revenue systems," Liz McNichol, a senior
fellow at the center and a co-author of the report stated in a press release. Zahradnik cited an
April 14 study by the National Conference of State Legislatures in which budget directors in about half of the states
reported concerns that a structural budget gap is developing. The Center's report
stresses that states' current and upcoming structural budget problems are
largely independent of cyclical budget shortfalls due to economic downturns. States will find it next to impossible
to claw their way out of structural deficits unless they expand their tax base
and halt recent efforts in many states to cut taxes, Zahradnik said. On the other hand,
Paul Prososki, state government affairs manager for the anti-tax group Americans for Tax Reform, challenged the report's conclusion that state revenues need
to be expanded to meet state governments' needs. "There is not a revenue problem here," Prososki
said. "It's just that after three years of not being able to grow
government because of the recession, they want to make up for it by growing
government amazing quickly." Raising taxes won't
solve states' structural budget problems because costs to states of programs
such as Medicaid are growing so quickly that they will continue to outpace
revenue growth, even with modest annual tax increases, he said. Prososki
added the states should instead search for innovative ways to reduce the costs
of those programs without decreasing the quality of services. "We can't fix it on the tax
side," he said. "We have to fix it on the spending side." Source:
Governing.com 051805 http://www.stateline.org/live/ViewPage.action?siteNodeId=136&languageId=1&contentId=32451 RELATED The Way We Tax: A 50 State Report (2003) http://www.governing.com/gpp/2003/gp3intro.htm Grading the States 2005: The Year of Living Dangerously http://www.governing.com/gpp/2005/intro.htm Cordell, et al. The New Wealth of Nations: taxing
cyberspace ISBN 1-896357-10-5. http://www.amazon.com/exec/obidos/tg/detail/-/1896357105/qid=1116521411/sr=1-1/ref=sr_1_1/002-0080843-4721651?v=glance&s=books |
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