State Budget Crises: Where to Go from Here

Spending beyond inflation and population growth accounts for budget gaps

By Daniel M. Rothschild

It didn’t have to be this way, with states slashing budgets, cutting services, hiking taxes and fees, all while peering into the crevasse of fiscal meltdown.

That’s the conclusion of a new paper by Matthew Mitchell, an economist at the Mercatus Center at George Mason University. In “State Spending Restraint: An Analysis of the Path Not Taken,” Mitchell calculates what state budgets would look like today if legislatures had held per-resident, inflation-adjusted spending to their 1987 or 1995 levels.

And it’s a much different picture than what’s playing out in statehouses across the country.

Government Boost to Small Business Could do More Harm than Good

Mercatus scholar warns that discrimination over business size lacks economic justification

By Daniel M. Rothschild

With the Senate set to create a $30 billion fund for small business lending and House Republican Whip Eric Cantor (R-VA) praising small businesses as “the engine of job creation,” elected officials and their challengers of both parties are scrambling to praise–and give special privileges to–small businesses.

Data Places Louisiana First in Nation for Overpayment of Unemployment Benefits

Director of state’s workforce commission warns against state-by-state comparisons

NEW ORLEANS – According to data released by the US Department of Labor, Louisiana is by far the leading culprit for overpayments of unemployment insurance. However, Louisiana’s Workforce Commission Director, Curt Eysink, strongly disputes any interpretation that places the state’s UI program at the bottom of the pack.

Study Finds Federal Grants Lead to Increased State Taxes

Dependence on federal aid places state revenue in precarious position

By Daniel M. Rothschild

With federal grants to states increasing by 73 percent over the last decade and totaling $654 billion in 2010, governors and legislatures are grateful for federal assistance in plugging budget gaps.

They may rethink their decisions in the coming years; however, as they begin raising taxes when federal largesse dries up.

State Income Taxes Stifle Economic Growth

With new state-level taxes on the table across the nation, Mercatus scholar warns of past experiences

By Daniel M. Rothschild

With states facing revenue shortfalls of historic proportions, legislatures are seeking new ways to raise funds. Washington voters will consider one of these measures this November: should the Evergreen State become the first state in two decades to create a personal income tax?

Commentary: Governor Jindal and Mayor Landrieu Eliminate Government Vehicles, Save Taxpayers Money

The past week has brought good news from both Governor Jindal and Mayor Landrieu regarding cutbacks in the number of employee take-home cars. As noted in a Times-Picayune editorial, when Governor Jindal took office, Louisiana’s fleet of employee cars was 10th largest in the nation. This is ludicrous, particularly when one considers the relative size of our state.

Commentary: Cost of Government report sheds positive light on Louisiana, but national trend very alarming

Last week, on August 19th, Americans for Tax Reform revealed their annual Cost of Government Day, which, according to ATR, is the day “on which the average American has earned enough gross income to pay off his or her share of the spending and regulatory burdens imposed by government on federal, state, and local levels.”…

Questions Remain Over Approach to Eliminating Government Workers

Unclear whether bill intended to reduce number of state employees will have significant impact

Baton Rouge — It may not be surprising that state Senator Jack Donahue’s legislation to reduce Louisiana’s disproportionately large government work force was met with criticism. What is surprising is that much of this criticism comes from administrators that support its underlying goal.