Statehouse Beat: Business Tax Cuts Not Working as Planned
Sunday Gazette-Mail - Revenue Secretary Bob Kiss was being brutally frank recently. He conceded that business tax cuts enacted in 2008 have helped create a "structural imbalance" that is contributing to near-monthly revenue shortfalls that over the past two years have forced severe spending and program cuts just to balance the state budget. Read
With most agencies and programs at the breaking point where they can no longer absorb additional cuts, Kiss suggested that tax increases might be the only option: "At some point, once you cut to the bone, the only way to address the structural imbalance is to have a revenue increase."
Looking back, no one sold the tax plan as a way to cripple the state's budget. In 2008, legislators were convinced that making state business taxes competitive with neighboring states would pay off in new business investment and economic growth.
So, what went wrong?