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Tracking State Tax Policy Is Hard; A New Resource Helps You Prepare For Policy Debates In All 50 States
What are the biggest trends in state tax policy?
Sometimes there are easy answers to this question. In recent years nearly every state made changes in response to 2017’s Tax Cuts and Jobs Act and 2018’s Wayfair decision on online sales taxes. A decade ago nearly every state dealt with revenue shortfalls caused by the Great Recession.
But sometimes you have to sift through 50 very different states (and the District of Columbia) and their very different tax policy debates. And to better understand what a state is doing and why, you need to know its policy choices and the priorities, challenges, and history that shape its decisions.
That’s why we created a new resource for anyone who cares about state tax and budget policy: State Fiscal Briefs.
Each brief summarizes a state’s finances, political environment, economics, and demographics, and helps get you up to speed on recent debates on taxes, education, and Medicaid. The briefs can help readers—from long-time experts to first-time observers—better understand their state’s policy debates as well as what’s happening in other states.
Start with the basics. How does your state raise revenue? Maryland's top source is individual income taxes; Missouri’s is charges; North Dakota’s is severance taxes; Pennsylvania’s is property taxes; and Washington’s is general sales taxes. (And one of Delaware’s top sources is corporate license fees.)
What issues are hot in each state? Nebraskans debate property tax reform every year. Wisconsin’s governor wants Medicaid expansion but its legislature does not. In 2019, Oregon’s legislature passed paid family leave, Illinois’s legalized and taxed marijuana, and Alabama’s raised the gas tax.
And more is (always) on the horizon. Arizonans may vote in November on significantly increasing their individual income tax to pay for more education spending. Both Iowa’s and South Carolina’s governors are proposing big tax cuts. North Carolina’s legislature and governor have still not agreed on a fiscal year 2020 budget—six months and counting after the start of fiscal year 2020.
You are not expected to remember all this. Policy debates are an open-book test.
What’s happening in the 50 states? A lot. So start here.
Posts and comments are solely the opinion of the author and not that of the Tax Policy Center, Urban Institute, or Brookings Institution.
Hans Pennik/AP Photo