U.S. states greet new fiscal year with more spending, school funding

WASHINGTON Fri Jun 27, 2014 4:44pm EDT

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WASHINGTON (Reuters) - Days before most U.S. states' new fiscal year begins, 40 states have passed budgets that boost spending and dedicate extra funding primarily for education, according to a brief released on Friday by the National Association of State Budget Officers.

But in many states spending increases and tax cuts are not as dramatic as their governors proposed this winter, due to softer-than-expected revenue, NASBO found. Typically, governors suggest budgets in January that legislatures use as starting points to negotiate.

States have primarily increased education funds by changing school finance formulas, raising amounts for early education, and tying higher education funding to performance measures, it found.

At the same time, they have also increased funds for Medicaid, the health insurance program for the poor, and other healthcare areas such as mental health.

In their budgets for fiscal 2015 some also cut taxes - mainly business and property taxes.

States had anticipated revenue growth to slow or even flat-line this year. At the end of 2012 taxpayers had reacted to impending changes in the federal tax code by "accelerating" their income to take advantage of lower levies. That boosted personal income tax collections for states last year, but the bulge ended this year.

Meanwhile, economic growth in the first quarter of 2014 fell off in some states.

"The decline in revenue has caused several states to reduce spending increases for certain programs, enact smaller tax cuts, delay pay raises, and has led to smaller ending balances for fiscal 2014," NASBO said. "Additionally, in some states governors have made line-item vetoes to ensure that the budget remains in balance for fiscal 2015."

For 46 states, fiscal 2015 starts on July 1, and 40 of those states have enacted their budgets. Massachusetts and Pennsylvania are the most behind - their legislatures have not yet finalized budgets. In Delaware, Illinois and New Jersey, legislature-approved budgets are awaiting governors' signatures. North Carolina's legislature is debating adjustments to the previously passed biennium budget.

(Reporting by Lisa Lambert; editing by Matthew Lewis)

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Comments (1)
morbas wrote:
USA tax structure is the fault and an obstacle to worldly potential. Transaction tax code imposes disproportionate burden at the most fundamental rights of liberty, justice. Any encumbrance on sustenance is contrary to equality in the ’pursuit of happiness’. Debt and deficit is simply insufficient revenue. We can nationalize the tax code eliminating all other taxation, immediately balancing the budget(s), embracing our ’1913 Income Tax Act’ graduated income tax principle(s). The Income Tax Act of 1913 represents the best approach of combining all income into a non-exempt graduated tax base. This was sufficient to generate a roaring twenties economic plateau. Consumers pay business burdens through product cost overhead. The executives are allowed huge profits, which are relatively untaxed, and that are a major business burden. This an incentive for wealth disparity, that is self regulated by a graduated taxation at margin above subsistence wage. Separation of Corporate and State is needed to shield against oligarch subversion of the peoples Democracy.
For municipalities, property and fee based revenue are the only constitutionally available revenues. This revenue base unfairly burdens sustenance side economics and suppresses the American small businesses. This is favored by the Tea-GOP because they are funded by the 0.1%, while the DNC is supported by the 99.9% economics.

To: Office of Senator ____________________
United States Senate Washington,
D.C. 20510
To: Office of Representative_________________________
U.S. House of Representatives
Washington, DC 20515

We the people of this United States do proclaim this federal government ‘of, by and for the people’. That, in order to fairly distribute revenue burden, to satisfy ‘net income’ progressive taxation, to balance all governments budgets, and to not tax poverty;
The people mandate:
Income National Tax code that shall use margin graduated income tax principle: Margin $30k 0%, each dollar above this at a linear increasing rate {(Income*(Income/$800k[1])*90%[2]; 90%[2] limit} . Exemptions shall be prohibited, couples freely share income(s). The Federal Reserve shall amend the (90%[2],$800k[1]) rate point, and control currency printing mandated to maintaining currency availability and value. The Federal Reserve shall set the Margin rate value well (>2x) above highest of all State Poverty Level(s). Revenue shall be proportioned 1/3rd Federal,1/3rd State proportioned per cast ballot and 1/3rd Local proportioned per cast ballot.
This National Tax is a peoples tax, no other citizen taxation shall be permitted. Business shall not be taxed. The Federal Reserve shall control taxation. The people will by simple majority approve or reject all margin and rate changes at every Congressional House Representative election year ballot.
Tax Reduction on the many…
Examples
Yearly Effective
Salary Tax Rate
30k 0.0%
50k 0.5%
100k 2.8%
200k 8.1%
500k 24.5%
1M 51.3%
5M 82.3%
10M 86.1%
up

morbas(i)

Jun 30, 2014 10:05am EDT  --  Report as abuse
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