Posted by: al66888 | June 12, 2007

Must Read of the Day: 40 States with budget surpluses

More than 40 states have reported budget surpluses resulting from higher than expected tax collections

Governors in 23 of those states proposed tax cuts, and a majority of states with surpluses chose to shore up their roads, schools and rainy day funds. For example, lawmakers in Utah agreed to a $1 billion bond act to fix state roads and add lane miles, while in Idaho state spending on education outpaced that on Medicaid for the first time in 20 years.

“When states return to a positive balance, they will not normally go back to tax cutting right away,” said Arturo Perez, a fiscal analyst with the National Conference of State Legislatures, which has tracked the spending of states and tabulated the list of those with surpluses. “But there has been across the country a growing interest in addressing the issue of property tax levels and burdens.”

So with lower federal taxes, and plenty of tax cuts, Americans have had available money to spend which in turn generates additional revenues. This is the basis of supply side economics. More money in people’s pockets- economy thrives, and tax revenue actually increases- more money in the government’s pockets- economy slows, recession begins. Remember that when you’re listening to the ’08 Presidential Candidates and those that say we’re not going to renew the Bush tax cuts and we’re going to raise taxes on this, this, and this.

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