To Cut Taxes or Keep Services: 2 States Act as Test Cases (NY Times)

[pinto]

To Cut Taxes or Keep Services: 2 States Act as Test Cases

By Michael Cooper
Published: July 10, 2012

OCEAN CITY, Md. — As state governments begin to emerge from the long downturn, many are grappling with a difficult choice: should they restore some of the services and jobs they were forced to cut after the recession — or cut taxes in the hopes of bolstering their local economies?

The debate over the proper balance between taxing and spending has been raging in Congress, on the presidential campaign trail and in statehouses around the country, and no two states have settled it more differently this year than Maryland and Kansas, whose fiscal years began July 1.

Maryland, a state with a pristine credit rating controlled by Democrats, raised income taxes on its top earners this year to preserve services and spending on its well-regarded schools — leading some business groups to warn that the state might become less competitive. Kansas, controlled by Republicans, decided to try to spur its economy with an income tax cut — which Moody’s Investors Service, the ratings agency, recently warned would lead to “dramatic revenue loss” and deficits that will likely require more spending cuts in the coming years.

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Gov. Martin O’Malley of Maryland, the chairman of the Democratic Governors Association, gave an impassioned defense of his approach to mayors from across the state who gathered here at the end of last month at the annual convention of the Maryland Municipal League.

http://www.nytimes.com/2012/07/11/us/as-state-revenues-begin-to-comeback-maryland-and-kansas-choose-different-paths.html?_r=1&hp

[Proud Liberal Dem]

1. cut taxes IN THE HOPES OF bolstering their local economies?

[pinto]

2. Yeah. Makes one go...

Ask any California municipality, city, county or the state as a whole.

[LiberalFighter]

3. Exactly what does Kansas have to offer that would encourage business and families to move there?

When they cut taxes that reduces revenue to provide the services that businesses need too. And if businesses don't consider Kansas to be good for their economy why would families move to Kansas? Or if families don't want to move to Kansas why would those businesses operate in Kansas if they can't get good employees?

[Liberal_Stalwart71]

4. I love my governor! He rocks!!!!

[madinmaryland]

5. Same here!!

O'Malley for President in 2016!