6 predictions for where states are planning to get their tax money
The financial landscape is looking worse than lawmakers expected, sending states to ferret out every opportunity to expand, demand, and open new and broader tax pipelines. No business will be spared.
$3 billion — that is the magic number in economic stimulus money passed by the House in the latest volley of federal funding. This bill, which at the time of this writing is still live but unlikely to gain further traction, would give cash-strapped states and local governments more than $1 trillion.
And it’s not enough. Lawmakers know that $1 billion spread across the United States would hardly make a dent. Colorado alone posted preliminary estimates of an immediate budget shortfall of as much as $3.1 billion in the next few years as tax revenues decline and needs rise.
Struggling states across the nation are looking at similarly staggering shortfalls. As states grapple with declining revenues and delayed tax collections, policymakers are thinking hard about how to balance their budgets. According to the Tax Foundation, every state but Vermont has varying balanced budget requirements. To find money that has simply vanished during the coronavirus outbreak, lawmakers are reviewing laundry lists of budget cuts and new ways to expand the tax base.
Where will the money come from? And how will the pursuit of state and local tax revenue impact businesses? Forecasting where states will focus their attention is anyone’s guess. But we can look at the past for a good idea of where government pay dirt may be the greatest and businesses can expect to see tax regimes move.