The Center's work on 'State Budget and Tax' Issues

The Center’s State Fiscal Project works with state officials and state-based nonprofits to develop responsible budget and tax policies that take the needs of low-income families into account. We provide information and technical assistance on a variety of issues, including strengthening state tax systems, state budget priorities, and making low-income programs more effective. We also help state nonprofits understand how federal budget and tax decisions affect states and their residents.


Improving State Budget Policies

December 4, 2014 at 2:26 pm

States’ choices about investing in schools, health care, child care, and other services can either help create opportunity and prosperity for people or hold them back.  This short video explains how the State Priorities Partnership, a national network of 41 independent state policy organizations, works to:

  • strengthen policies that affect low- and moderate-income families, such as health care, economic security, education, and child care;
  • make state tax systems fairer and more effective in raising needed resources; and
  • help other nonprofits and the general public participate in debates about budget priorities.

Launched in 1993 in 12 states, the network — which local and national foundations support — has grown steadily; its 41 states include four-fifths of the U.S. population.  CBPP coordinates the network.

The Rise in State Prison Populations

December 3, 2014 at 10:01 am

Most states’ prison populations are at historic highs after decades of extraordinary growth. This growth has been costly, limiting economic opportunity for communities with especially high incarceration rates and taking critical resources from other important investments, such as education. Click on the map below to learn more about the rise in prison populations and spending in each state. The downloadable data file also includes state-by-state information on recent criminal justice reforms.

More Bad News for Backers of Kansas Tax Cuts

November 21, 2014 at 10:42 am

The latest projections from Kansas’ nonpartisan Legislative Research Department bring more bad news for those who hoped Kansas’ massive tax cuts would generate an economic surge.

The department predicts that personal incomes will grow more slowly in Kansas than in the nation as a whole this year and will continue to lag behind the national rate in 2015, 2016, and 2017, by wide margins (see graph).

This isn’t what tax cut proponents predicted.  Governor Sam Brownback said they would be “a shot of adrenaline into the heart of the Kansas economy.”  The Heritage Foundation’s Stephen Moore, who helped design them, said the economic benefits would be “near immediate and permanent.”

Faced with the state’s unimpressive economic performance since the tax cuts took effect, proponents now claim they just need a little more time to work.  But the new forecast, combined with last week’s announcement that Kansas’ budget has fallen much further into the red than previously acknowledged (because of the tax cuts), casts further doubt on those claims.

This shouldn’t be a surprise.  History suggests that deep cuts in personal income taxes are a poor strategy for economic growth, and the serious academic literature typically finds little relationship between a state’s tax levels and its economic performance.  So there’s no reason to think that the tax cuts will cause Kansas’ economy to boom in the future.

California Votes to Shrink Prison Population and Reinvest Savings

November 6, 2014 at 4:28 pm

California voters approved Tuesday a measure to not only reduce the state prison population but also reinvest the savings in specific, high-priority programs.  As our recent report on criminal justice reform and education investments explains, Proposition 47 includes several features that make it a model reform.

Specifically, it:

  • Makes targeted sentencing reductions by reclassifying certain offenses from felonies to misdemeanors, for both current and future offenders.
  • Requires the state to calculate the savings from these reforms each year and deposit them in a dedicated fund.
  • Earmarks the savings for specific investments in mental health and substance abuse treatment, supporting at-risk youth in schools, and victim services.

State policies have been the major drivers of rising prison populations in recent decades, so these changes will reduce prison overcrowding and lower incarceration rates.  The California Legislative Analyst’s Office estimates that Proposition 47 would likely cut the state’s prison population by several thousand inmates while generating corrections savings in the low hundreds of millions of dollars annually.  Even better, research indicates that states can significantly reduce their prison populations without harming public safety.

Just as important, Proposition 47 ensures that the savings get reinvested in specific areas of the budget.  While most states have enacted criminal justice reforms, few have directed the savings to investments in human capital (such as education) or low-income neighborhoods.

How Has State K-12 Funding Fared in Your State?

November 5, 2014 at 3:00 pm

This interactive map shows the change — in both dollars and percent — in state general K-12 funding per student since 2008.  As our recent report explains, funding is below pre-recession levels in at least 30 states, after adjusting for inflation; in 14 states, the decline exceeds 10 percent.  While most states are providing more funding per student this school year than they did a year ago, funding generally hasn’t risen enough to fully offset earlier cuts.