July 1, 2008

Growth in State Tax Revenues Is the Slowest in 5 Years, Report Says

A report on state finances being released today delivers another round of bad news about budget conditions, signaling that more spending cuts could lie ahead for higher education and other state programs.

State tax collections are at their weakest in five years, according to the report, by the State University of New York’s Nelson A. Rockefeller Institute of Government.

Over all, tax revenues increased by only 1.7 percent during the first quarter of this year, compared with the same period a year ago, the report says, marking the slowest growth rate since 2003. During that same period, for the first time in six years, sales taxes (a key revenue source) showed no growth from the year before, the report says.

Today’s report follows the release last month of a similarly gloomy report by the National Governors Association and the National Association of State Budget Officers. Those groups found that overall growth in state spending had slowed significantly across the nation and that an increasing number of states faced revenue shortfalls.

Tighter state budgets often signal bad news for college officials and students, who face cuts in operating budgets and increases in tuition as legislatures struggle to make ends meet. —Sara Hebel

Comments

1. I wonder…could the Chronicle and its brain washed liberal/socialist propoganda be more obvious?

   And, could the Socialist/liberals that so often post here and so obviously hate the U.S….question? Why not move to, say Iran or North Korea?

   You would learn the value of what you take for granted every day.

   “Academe.” The very word is a shame as compared to what it was 50 years ago.

   Such a shame…..

   Academe is the last and only hope for those that have no ability to function in the real world and have found positions to spout their fury against an imaginary enemy (i.e. the USA). Higher education is filled with those that cannot find jobs elsewhere, are having or have had mental problems and are somewhat delusional in their feelings toward the very nation that gives them their freedom of speech.

   It is sickening. Someday, may this nation rid itself of the infestation, the cockroaches that call themselves “Ph.D’s” and maybe….just maybe…we can finally teach our children patriotism and what they face in the the world ahead….

   Until then…we have paper “doctors” that like to sip wine and think they are someone when they step off of a campus.

   Funny…deep down they all know, when they take their Zoloft and Xanex each day…they are no one and are just victims of a system that is….

   well, hopefully better in 100 years.

   — Mr. Miller    Jul 1, 05:33 PM    #

2. Mr. Miller, to quote Publilius Syrus, 100 BC, “It is only the ignorant who despise education.” I see we have desperatley failed you and so you yourself.

   — Ph. D Patriot    Jul 1, 07:12 PM    #

3. Mr. Miller,

   As a “conservative” (I hate those kinds of labels) in academe, I understand why you feel like you do, but you are being too simplistic. Yes, there are those in academe who are as you describe, and they have influence. There are many others, though, who are not. Most of us are in the trenches every day trying to educate the masses as best we can. Almost all of my engineer colleagues, for example, could (and have in the past) make much more money in industry, but we choose to teach instead.

   The liberal wacko types who exist mostly in the social sciences and humanities disciplines do serve a purpose as well. Most students take their courses as electives or as part of a required general education core curriculum. Most students also have common sense and can filter the BS from the real. When one of the ultra-feminist professors in my graduate level education leadership program told the class, on the first day of class, that she was a feminist, that she viewed everything from that perspective, and that if we didn’t like it we should drop the course immediately, it was an object lesson on how not to conduct a class (or by extension, a business meeting) that includes a bunch of bright, independent thinkers. Freedom of speech is a wonderful thing.

   — FB    Jul 2, 09:32 AM    #

4. Now, a comment regarding the article:

   Short term gains in tax revenue can be obtained by raising the tax rate. It may seem counterintuitive, but the opposite is true if you want to achieve long term gains in tax revenue. Taxes, especially sales taxes, are collected as a result of commerce. As commercial activity increases, so does the tax base, which increases the total amount of taxes collected. Increasing the tax rate, however, tends to reduce commercial activity because it reduces profits. Allow industry to keep more profit, and that profit will be recycled through investment. Taxes will be collected each time investment takes place. If you reduce the ability to invest, you will reduce the overall amount of money collected in taxes.

   Its kind of like the WalMart model. WalMart makes incredible profits because it sells at low prices. The profit margin is slim, but volume is so high that overall profit goes up. The same philosophy must be applied to taxes. Keep the tax rate low, which will increase activity, which will increase tax revenue.

   We cannot, however, continue to increase spending at a rate that exceeds the growth of tax revenue. Reaganomics works, but only if it is accompanied by fiscal common sense on the part of the government. We’ve got to have the moral courage to stop electing folks who promise to make the government the savior of the people by continuing to increase government spending on every entitlement program out there. For the last few years, even though we have had some tax cuts, we have also significantly increased spending. We have created government programs, such as “No Child Left Behind”, for example, which have increased costs with little if any benefit in return.

   We’ve got to slow down government growth and reduce restrictions on private growth. We just can’t afford to do otherwise.

   — FB    Jul 2, 10:01 AM    #

5. I wonder…could Mr. Miller’s extreme conservatism and failure to acknowledge basic facts of our economy be more obvious?

   Our economy is in trouble, and that’s neither a conservative nor liberal observation: it’s a fact. And IF one has to point fingers, there’s only one way to point them after the worst 8 years of a Presidency in the history of this nation. Taxes are necessary to run out nation. The most relevant questions are how much, and for what.

   — Al    Jul 2, 11:03 AM    #

6. Wow, Mr. Fox . . . uh, I mean Miller! That’s the biggest bunch of sour grapes I have seen in a long time! Couldn’t hack it in academe, eh? Or never tried, out of fear of failing?

   — Aesop    Jul 2, 11:29 AM    #

7. I bet Mr Miller’s hero is a prominent American whose Daddy’s money and friends waved him through Yale and Harvard, kept him from getting his ass shot off in Viet Nam and financed a few failed ventures, including attempting to run our country – with the help of some pond scum like Rove and Cheney.

   — AW    Jul 3, 01:25 PM    #

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