Western states urged to diversify tax bases | Salt lake Tribune

[Ediacara]

Western states urged to diversify tax bases

By Rebecca Walsh
The Salt Lake Tribune

Utah's budget is uncomfortably tight. But it could be worse.

Oregon teachers offered to go unpaid just to meet state requirements for time spent in the classroom. Montana lawmakers considered cutting dialysis for low-income patients.

Utah's budget woes in contrast seem less dire.

But a study released today by Utah State University's Western Rural Development Center (WRDC) concludes 13 Western states, including Utah, could better weather the budget blows of economic downturns if leaders diversified state tax bases. Using the same theories that protect wise Wall Street investors, a group of economists found, state budget-crunchers could cushion state coffers and avoid the job and service-cutting angst plaguing them now.

"State budgets are in their worst shape in 60 years," WRDC Director Steve Daniels, wrote in the report. "States across the country are making cuts that virtually no one could have imagined five years ago. The ability of state fiscal systems to weather bad times eroded without our noticing. Western states do not have basic tax systems sufficient to meet their ongoing obligations."

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[oneighty]

1. Yup!

To bad the rich states are getting poor too or we could
send you all some of that 'spread the wealth revenue' sharing by the federals.

You got states rights: Raise your state taxes!

180

[stevedeshazer]

2. The article has some good analysis

It fails because it does not take into account the added burden of unfunded mandates forced upon the states by the Republican-led Congress since 1994. It also does not take into account the multi billion- dollar extortion by Enron and related sham companies following the "deregulation" of energy trading in the late '90s.

As recently as 2000, many of these states had budget surpluses, just like the federal government.

If y'all don't believe that Grover Norquist means what he says about shrinking government until it's small enough to be drowned in a bathtub, think a little harder.

[TrogL]

3. Now is when we find out if trickle-down economics works

Theoretically (ie. their theory) is that the rich, having all the money, will spend it to create the infrastructure, absorb the startup costs and attract the skilled workers to get new industry off the ground.

Problem is, investing in infrastructure is Keynesian and there's no way they'd go for it. Without the infrastructure it's not going to happen. That's why Canada is the number one country right now for doing business - its infrastructure is immaculate; good roads, good track, new wire, dark fibre, educated workforce, good social programs, R&D hotspots (eg. U of A, UWO, UBC, U of T), good relations with the Europeans and a sound loonie.

Unless the States digs deep and does something about its infrastructure, opportunity will move abroad.