Tax and Budget Reform

Stimulus Resources Update

We've added to the resources we detailed this past Monday, Implementing the Recovery Plan: A Resource Guide for State Legislators and Advocates

The Council on State Governments has created to identify opportunities for states to get federal assistance and track programs and efforts to implement the recovery plan in each state.

Implementing the Recovery Plan: A Resource Guide for State Legislators and Advocates

Recognizing the severity of the economic crisis our nation faces, President Obama this week signed the landmark American Recovery and Reinvestment Act, a plan aimed at "restoring or saving" 3.5 million jobs and investing in the long-term future of the American economy.  

Built into the plan is a recognition that, while the federal government will assist in funding the work, the implementation of the plan will rest mostly with the states.  This Dispatch provides facts, guidance and a collection of resources to state leaders and advocates on how to implement the recovery plan in a strategic manner that strengthens our states and honors our progressive values.

Economic Recovery Plan will Cover Less Than Half of Projected State Deficits

While groups like the American Legislative Exchange Council (ALEC) have condemned federal help for state governments in the recovery package, most analysts recognize that state spending is going to be the most immediate stimulus available for reviving the national economy.


Unfortunately, as a new study by the Center on Budget and Policy Priorities details, while state deficits are projected to be $350 billion over the next 30 months, the House recovery plan just approved includes only about $150 to $155 billion that can be used to address those shortfalls, meaning that 55% to 60% of projected state deficits will remain.

Why States Need to be a Focus for Any Economic Recovery Plan

We are in what the Center for American Progress has called a "labor market free-fall." The economy shed 524,000 jobs in December, the 12th month in a row of job losses. The unemployment rate spiked half a percent to 7.2 percent, and 11.1 million workers are unemployed, well above expectations.  Over the past year, the economy has lost 2.6 million jobs—more than in any year since 1945.  If nothing is done, the Economic Policy Institutes estimates that more than 5.5 million jobs are likely to be lost during this recession unless a major job-creating stimulus plan is enacted. 


In a debate too often dominated by rightwing tax cut rhetoric, there is a real opening for progressives to demand a fairer, more accountable tax and budget system.  The public has a strong commitment to funding both social services and the long-term investments needed for economic growth, but state residents are frustrated by governments that they believe tax low- and middle-income residents too much and upper-income residents and corporations too little.  Hidden economic giveaways to companies receiving tax breaks and government contracts only add to voters' suspicion that state budgets serve those with money, not the average taxpayer.  In response, a range of reforms at the state level are creating more transparent tax and budget decisions and strengthening voters' trust that their tax money will actually go towards the important public services that they do support.  These approaches include: