NCPA - National Center for Policy Analysis

Some States Are Not "In The Money"

February 18, 2000

Most states are so flush with tax revenues they are trying to figure out what to do with their surpluses. But a few are far less fortunate. Their lawmakers must decide whether to raise taxes or cut spending because their state economies are not diversified enough to reap the full benefits of the nation's economic boom.

  • One such state is Wyoming -- whose residents pay no personal income tax to the state and, overall, a lower percentage of their income in taxes than residents of any other state.
  • Another is Louisiana, where unstable oil prices and marginal increases in tax revenues have left it facing a potential deficit of $540 million for the fiscal year beginning in July.
  • After spending increasing amounts on education, Tennessee needs to cut spending by $342 million or find new sources of revenue.
  • Budget cuts are in the cards for Iowa, which is suffering from a slow rate of economic growth attributed to low farm prices.

Finally, there is Kansas, where revenue collections have come up short of forecasts -- necessitating cuts in its budget.

Source: Michael Janofsky, "In a Time of Plenty, Some States Facing Plenty of Shortfalls," New York Times, February 18, 2000.


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