Big surprise (not really): States are going broke. Excerpt:
More than half the states are facing big deficits this year, and they are mostly blue states, including California, Connecticut, Delaware, Illinois and New York and Oregon. Wait. These are states with high taxes and some of the deepest pools of red ink. There’s got to be a message here.
But some red states have money woes, too. The biggest fight is in Kansas, where the Republican-dominated Legislature recently passed a massive income tax hike that would raise taxes on every small business in the state and every wage earner with income above $15,000. Fortunately, Gov. Sam Brownback vetoed the GOP tax hike, but it will be back in some form.
So what is the source of the budget crises from coast to coast? First, on the revenue side, tax receipts are down because states are frontline victims of the slow-growth era of the Obama years. When the U.S. economy sputters at only 1.6 percent as it did in 2016, state and local tax revenues barely trickle in. So much for the liberal spin that President Obama left behind a healthy economy.
Revenues have plummeted in oil-producing states such as Alaska, Kansas, Oklahoma, North Dakota and Wyoming. Liberals are pushing big tax increases in each of those states, which not so long ago gorged on new spending during the years of high prices. North Dakota had one year in which the budget rose more than 50 percent.
It’s bad enough that the Imperial City runs debts into the tens of trillions with no thought for the next generation. But the several states cannot even print money to hide the debt; they must live within their means, and they just plain aren’t.
It’s significant to note that our own Colorado is not exempt from these woes, with the 2016 budget running somewhere between $227 and $333 million out of a $28.5 billion budget in the red, depending on whose estimates you believe; that’s a pretty good trick for a state that has just realized a $70 million tax windfall from legal marijuana sales.
Historically, tax hikes have limited value in the states just ass they do at the Imperial level. Sadly for Keynesians, the Laffer Curve is a real thing, and there is only so much blood that can be squeezed from the public stone.
The states, just like the Imperial government, are going to have to learn within their means; as I have pointed out many times before, we have mortgaged our children’s futures, and posterity will rightly damn us for it.