NCPA - National Center for Policy Analysis

States Consider Cutting Taxes Again

January 6, 1999

With budgets firmly in the black and coffers overflowing, at least 32 states are contemplating tax reductions this year, according to a survey by the National Conference of State Legislatures. Among the proposals before lawmakers are cuts in income, business, sales, property and car taxes. Targeted cuts could benefit seniors, married couples, college students and the working poor in some states.

  • Last year, 35 states reduced taxes by a record $6.8 billion.
  • Even with the cuts, the states ended 1998 with $35.4 billion in reserves -- a level not achieved since 1980.
  • Reductions in spending on welfare and Medicaid savings, as well as the prospect of $206 billion in funds from the tobacco settlement beginning in 2000, are propelling the tax-cut trend.
  • Since 1995, at least 25 states have cut taxes each year -- for a total savings to taxpayers of nearly $17 billion.

However, some of the largest states -- including California and New York -- plan no new cuts this year.

Source: Richard Wolf, "32 States Look Into Reducing Taxes," USA Today, January 6, 1999.


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