Blueprint: Rebuilding Prosperity for States and Working Families

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Conference Call - Tues 2/8 4pm EST - Rebuilding Prosperity: 2011 Blueprint for Economic Security


On Tuesday, February 8th at 4pm EST, the Progressive States Network will host a call focusing on messaging and framing around several key policies that can rebuild prosperity, including transparency, progressive revenue generation, and economic development. Speakers will include Massachusetts Senator Jamie Eldridge, Maine Representative Diane Russell, Dan Cohen from In the Public Interest and Jason Judd fromDemos

Please RSVP for this call by clicking here.


Blueprint: Rebuilding Prosperity for States and Working Families

Tax and Budget Reform   *   Altaf Rahamatulla

2011 presents states with a stark choice: austerity and inequality or progress and growth.

While Wall Street and the rich are enjoying historic profits, the economic downturn’s impact is still being felt on Main Street, where the middle class continues to struggle. Unemployment remains abysmally high and  prospects for further federal job creation measures are slim to none. With states facing another year of unprecedented budget pressures, conservatives continue their corporate welfare crusade by attempting to take money out of the pockets of working families to benefit the affluent. With an agenda that places the interests of private industry over the public, they are advancing damaging and regressive policies, including reckless budget cuts, privatization, and huge tax breaks for the rich, which will only cause more damage to the economy and the middle class.

Meanwhile, Americans view government policies as favoring large corporations over the needs of average families. A July 2010 Pew poll revealed that 74 percent of the public said that government had done either a "great deal" or a "fair amount" to help banks and 70 percent thought similarly of the government's support of big business. Similarly, a Gallup poll last month revealed that 62 percent Americans want big business to have less influence in the country.

While the Right fights to bankrupt states to benefit their corporate backers, progressives can fight to rebuild prosperity for our states and our families.

Progressives at the state level have a significant role to play in placing the country on a sustainable road to recovery by championing the needs of the middle class and working families. To that end, Progressive States Network recently released our 2011 Blueprint for Economic Security, a series of policy options to encourage growth, create jobs, and forge an equitable and sound path toward recovery.

The Rebuilding Prosperity section of the initiative includes a set of sound fiscal and economic options, such as Corporate TransparencyProgressive Tax Reform and Revenue Generation, and proactive Economic Development policies. While conservatives focus on slash-and-burn cuts and reckless tax breaks, progressives can use these solutions to advocate for economic recovery and prosperity: making government more accountable to citizens, providing protections for taxpayers, levelling the playing field for small businesses, reducing the unfair burden on the moderate and low-income families, supporting the growth of a vibrant middle class, and ensuring sound investments in public structures.

Many legislators are already acting to foster recovery in the states. Last month, Illinois lawmakers approved legislation to raise the state corporate and personal income tax. In explaining the need for the effort, Gov. Pat Quinn explained that the state's "fiscal house was burning." Faced with a revenue shortfall of $15 billion, legislators garnered the political will to enact sensible means to generate sorely-needed revenue. Though the state faces a number of structural budget issues, compared to the short-term fiscal gimmicks used in the past, this action is undoubtedly a responsible step in the right direction.

Here are some other ways states are working towards recovery and prosperity in 2011:


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Transparency and Accountability Reforms


The precarious economic and fiscal circumstances states confront in 2011 merit a more detailed review of spending on economic development subsidies and contracts. Near double-digit unemployment, massive revenue shortfalls, and a slow recovery continue to batter state budgets and dim growth prospects. Even with this backdrop, states continue to give away millions of taxpayer dollars to corporations with little to no accountability in place.

Transparency measures enjoy broad, bipartisan support, are extremely popular with the public, and lend themselves to effective messaging. A survey on Recovery Act transparency found that Republicans, Independents, and Democrats all strongly supported the inclusion of tracking and reporting requirements to ensure that taxpayer money was effectively spent and had a positive impact on the economy.

Championing transparency allows lawmakers to earn public trust and advance reforms to make government more accountable, encourage job creation and innovation, and guarantee an efficient use of taxpayer dollars.


Progressive Tax Reform and Revenue Generation


Although the recession may have subsided at the national level, 2011 still finds states reeling from historic budget shortfalls, high unemployment, and significant revenue declines. The lingering effects of the downturn and its accompanying revenue crisis have forced state lawmakers to consider extreme fiscal measures to confront budgetary constraints.

Research and historical precedent demonstrate that raising revenue in a progressive manner is economically sound, politically feasible, and popular with the public - especially compared to massive cuts in investments in education, infrastructure, and health care that endanger a state's economic security and social vitality. Investment in economic growth is not a partisan issue - it is a necessary step to prosperity that should garner support from both progressives and conservatives.


Economic Development Banks

Though large corporations have posted historically high profits in recent months, small businesses are still reeling from the impact of the downturn. Unemployment remains high and states do not have the necessary revenue to invest in infrastructure, education, and other vital areas of growth. As bank lending has declined dramatically, small business owners have been discouraged from even seeking the loans they need to expand their businesses and create jobs.

Progressive leaders in many states are considering proactive economic development policies to confront this ongoing issue. One of the most innovative is the creation of a development bank, similar to North Dakota’s - the only state in the country to have its own bank. At the basic level, a development bank is capitalized by state money, publicly governed, can serve as a depository for state revenue, and returns a portion of its profits to the state. Rather than sending state funds to big banks, the development bank would keep deposits in-state. As such, a development bank reduces state dependence on large financial corporations and allows states to invest dollars in local communities - and create jobs - rather than line the pockets of Wall Street CEOs. Lawmakers across the country, from Maine to Oregon, are moving on the concept.

Steps Forward


US: Arizona-inspired immigration bills lose momentum in other states

WA: Lawmakers consider proposal for state bank

US: Stimulus funds help states expand internet access to rural residents


Steps Back


NC: Report: Despite 'unaffordable' cost to state, Voter ID law moves forward

US: Nine states where right wing is proposing bills restricting reproductive rights


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The Stateside Dispatch is written and edited by:

Nora Ranney, Legislative Director
Marisol Thomer, Outreach Director
Devin Boerm, Health Policy Specialist
Fabiola Carrión, Broadband and Green Jobs Policy Specialist
Cristina Francisco-McGuire, Election Reform Policy Specialist
Tim Judson, Workers' Rights Policy Specialist
Suman Raghunathan, Immigration Policy Specialist
Altaf Rahamatulla, Tax and Budget Policy Specialist
Mike Maiorini, Online Technology Manager
Charles Monaco, Press and New Media Specialist
Ben Secord, Outreach Specialist

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