One long-standing, widespread state strategy to collect debt has been the use of offset programs — ensuring that any pending payments to individuals or entities (tax refunds, for example) are used to cover their delinquent obligations.
In fiscal year 2015, for example, Iowa’s Offset Program collected $47.2 million in debt, a 162 percent increase from FY 2006. Two primary factors have contributed to this increase in debt recovery. First, certain casino winnings must now be used to pay an individual’s debt. (Other offsets can come from tax refunds, lottery winnings, and payments to vendors for goods and services.) Second, Iowa allows local governments to participate in the program. This local involvement also takes place in states such as Kansas, Minnesota and Wisconsin.
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There are not many questions of public policy that economists widely agree upon. The benefits of free trade, negative impacts of rent controls, and the infeasibility of returning to a gold standard, are a few. Add to that list the use of tax-exempt municipal bonds to subsidize the construction of professional sports complexes, a practice that 85% of surveyed economists disagree with.
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Natural resource extraction is a key component of many Western states’ economies and often generates a sizeable share of state revenue. However, natural resources are finite, the price of energy commodities is increasingly unpredictable, and revenues are volatile and tough for state forecasters to accurately predict. As a result, many states have created severance tax-based sovereign wealth funds to set aside a share of today’s revenue in order to generate investment earnings for state use in the future. This free CSG eCademy features Patrick Murray of The Pew Charitable Trusts, who presents findings and policy recommendations from a new research brief, including challenges and opportunities for state policymakers in energy-producing states.
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Maybe, but not as soon as Gov. Bentley had hoped.
On Tuesday, Aug. 23, the Alabama House failed to allow a committee meeting to move forward in time to get the lottery proposal, as a constitutional amendment, on the Nov. 8 general election ballot, according to media coverage by AL.com.
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In 2016, shoppers in 17 states will have the opportunity to purchase certain items free of sales tax on what are known as sales tax holidays. Widely popular with consumers, sales tax holidays are often pitched as a win-win for everyone; spurring further local economic growth while giving taxpayers’ pocketbooks some much needed relief. Recent findings, however, suggest that these holidays are often ineffective fiscal tools.
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Governors’ salaries in 2016 range from a low of $70,000 to a high of $190,823 with an average salary of $137,415. Maine Gov. Paul LePage earns the lowest gubernatorial salary at an annual rate of $70,000, followed by Colorado Gov. John Hickenlooper, who earns $90,000 per year. Pennsylvania Gov. Tom Wolf has the highest gubernatorial salary at $190,823, followed by Tennessee Gov. Bill Haslam’s salary of $187,500 per year, although Haslam returns his salary to the state. Governors in four states—Alabama, Florida, Illinois and Tennessee—do not accept a paycheck or return all or nearly all of their salaries to the state.
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Overall, state fiscal conditions showed modest improvements in fiscal year 2015. Revenue growth accelerated, mostly due to strong income tax collections, while total state spending from all fund sources increased at its fastest rate since 1992 due to additional federal funds from the Affordable Care Act. In addition, the number of states making mid-year budget cuts remained low, and states’ total balances reached an all-time high in actual dollar terms. In fiscal 2016, states expect both revenue and spending to grow slowly. However, some states are facing significant budgetary challenges associated with the decline in oil prices. It is likely that budget proposals for fiscal 2017 and beyond will remain mostly cautious with limited spending growth.
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State and local governments have been reshaping their finances since the Great Recession. They have been struggling with three major sources of fiscal stress: slow tax revenue growth, growth in pension contributions that has been heavily concentrated in a few states, and Medicaid spending growth driven by recession-related enrollment. In 37 states, pension contributions plus state-funded Medicaid grew by more than state and local government tax revenue between 2007 and 2014, in real per-capita terms. In response to these strains, state and local governments have cut infrastructure investment, slashed support for higher education, cut spending on K–12 education, cut spending on social benefits other than Medicaid, reduced administrative staff and reduced most other areas of the budget.
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