Stateline Stories

Report: Delaware Has Lowest Business Taxes; Alaska Highest

New report says businesses pay lower taxes in Delaware, Oregon and Utah; higher taxes in Alaska and North Dakota. But what your company pays may depend on the business you’re in.

Mortgage Deduction Rates Vary Widely Among States

The mortgage interest deduction is a tax break that benefits middle-class Americans all over the country—or does it?

Delay in Implementing Sequester Forces Deeper Unemployment Cuts

Unemployment benefits were already on the chopping block thanks to sequestration. But in three-dozen states, the pain for the long-term unemployed is even greater because states have been slow to enact the across-the-board federal cuts.

Federal Road Fund Could Go Broke by 2015

With federal transportation money drying up, will the burden fall to the states?

Infographic: Spending on Public Health Drops

Our public health systems are meant to be at the forefront of prevention, but state and federal investments are shrinking.

NFL Plays Offense to Get Public Money for Stadiums

Why are so many teams asking taxpayers to build new pro football stadiums this year?

State Revenues Reach Record High After Recession’s Decline

The Great Recession hurt state tax collections, but many have rebounded and total revenues reached record highs last fiscal year.

Obama Budget Calls for More Competitive Grants

The White House budget, released Wednesday, envisions making states compete with one another for a host of federal grant programs, similar to the Race to the Top education program.

States’ Free Online Tax Filing Services Often Overlooked

Some 20 states allow taxpayers to file income tax online for free. Is your state one of them?

States Rack Up Victories in Bids to Collect Online Sales Taxes

After more than a decade of trying, state officials think they may get to collect billions of dollars of taxes on online sales soon. Find out why.

Sequester Will Force Universities to Scale Back Scientific Research

The sequester is already limiting the amount of money universities can offer to graduate students.

Which States Tax Your Travel the Most?

Your vacation dollar won’t go as far in some destinations because of state and local travel taxes.

U.S. Senate Passes Test Vote on Online Sales Tax

A symbolic, nonbinding vote was taken Friday on a proposal that would allow states to collect sales tax for purchases made online.

Congress May Reverse Some of Sequester’s Cuts to WIC

An effort to keep the federal government open could also deliver relief to pregnant women, mothers and young children in need of food.

Congress Debates Highway Safety Funding Cuts

Budget battles on Capitol Hill could cost states federal money to fight distracted driving and to roll out graduated licenses for teen drivers.

The 5 States Most Vulnerable to Sequestration’s Education Cuts

Automatic federal budget cuts will slash more than $1 billion in K-12 education dollars this year, paring everything from Title I money for low-income students to school improvement initiatives.

Automatic Defense Cuts Will Deal Blow to States

A Stateline analysis shows automatic defense spending reductions will hit defense contractors hard. This sector comprises as much as 8 percent of some state economies.

States in Recovery: Revenues

For nearly half the states, recovery is tenuous, with revenues still below peak levels before the recession.

Governors Fear Loss of Bond Tax Exemption

A panel of top tax policy analysts has warned the nation’s governors they face an ongoing risk of increased borrowing costs if President Obama and Congress curb or eliminate the tax exemption on municipal bonds to bring down the federal budget deficit.

States with Heavy Military Presence Hurt Hardest

The White House published a 50-state list of potential impacts from the automatic budget cuts known as sequestration. States that rely heavily on military spending would be hurt worst.

Backlash for Red-Light Cameras Hasn’t Slowed Spread

Throughout the country, state legislatures are considering how broadly to use traffic cameras, but the number of communities using them keeps growing.

Where Is Manufacturing Making a Comeback?

After years of losing jobs to lower-cost, overseas operations, several Rust Belt states are seeing a resurgence of manufacturing, led surprisingly by Michigan. In the last three years, Michigan gained nearly 70,000 manufacturing jobs, the most of any other state, according to the latest government figures. Indiana

Gas Tax Loses Favor as Governors Look for New Transportation Money

In the search for more transportation money, governors and state lawmakers are largely avoiding one of the most obvious and straightforward funding sources: state gasoline taxes.

Fracking for State Dollars

The boom in oil and gas production has some states taking another look at the kinds of taxes they levy.

States’ Fragile Recovery at Risk

State budgets are finally climbing out of the fiscal hole they’ve been in for the last four years. But Washington isn’t making it any easier for them.

Surpluses Await Some States in 2013 Sessions

The surpluses that state lawmakers will find waiting for them this year may not go very far.

Uncertainty from Washington Continues for States

States trying to craft their budgets for the upcoming year will have to wait until March for more details from Washington.

Election Year Brings Big Changes in State Policy

From battles in the legislatures to battles at the polls, Stateline reporters traveled all over the country in 2012 reporting on news from the states.

Congress Likely to Postpone Online Sales Tax Collection

A bipartisan group of state elected officials has pushed hard for federal legislation that would allow states to require the collection of sales taxes on internet purchases. For now, though, that effort hasn’t overcome congressional gridlock.

As Federal Immigration Overhaul Looms, California Schools Slash Adult English Classes

Requiring immigrants to learn English would likely be a key component of any federal immigration overhaul. But widespread cuts to English programs in California show that even that requirement may not be easy to roll out.

Fiscal Cliff Jitters Could Boost Early State Tax Revenue

When filmmaker George Lucas sold his company and the Star Wars franchise to Walt Disney Co. this fall, he saved hundreds of millions of dollars in state and federal taxes by not waiting until next year when higher tax rates are anticipated. He’s hardly alone.

Medicaid Trumps `Fiscal Cliff’ as Top State Budget Concern

Medicaid is still the biggest budget worry for the coming year, according to a new survey of state legislative directors to be released soon. Nowhere is the problem larger than in Texas, which faces a $4.3 billion Medicaid deficit.

Tax Breaks for Sale: Transferable Tax Credits Explained

States offer billions of dollars of tax incentives that businesses can sell to other businesses. Here’s why they do it and how it works.

Costly Prison Phone Calls Frustrate Families

Most state prisons impose a surcharge on calls made by inmates. Many of the inmates’ families have trouble paying it.

Jobless Benefits At Risk in Fiscal Cliff Debate

Amid the fervor over the fiscal cliff in Washington, there’s one federal program also facing a Dec. 31, 2012 deadline that if allowed to pass could cost unemployed Americans thousands of dollars and deprive states of crucial federal funding that’s helped them weather the worst of the Great Recession.

More States Dig into Libor Scandal

As lawsuits and inquiries mount, more states are looking into the rate-rigging scandal.

Cyber Monday Sparks Calls for Online Sales Tax

A coalition of small business leaders is hoping this will be the last Cyber Monday of the era without online sales taxes. It is pressing Congress to pass legislation requiring most online retailers to collect and remit sales taxes.

Budget Cuts, Revenue Swings Await States In ‘Fiscal Cliff’ Drama

State budgets and economies would be hit particularly hard by the automatic tax increases and spending cuts caused by the looming “fiscal cliff,” if it’s not averted, according to a new report by the Pew Center on the States’ Fiscal Federalism Initiative, which explored how the fiscal cliff would affect states in a number of ways.

Historic Gay Marriage, Marijuana Measures Win Approval

After years of rejecting same-sex marriage at the ballot box, three states endorse it.

Infographic: Ballot Measures Gave Voters Say on Divisive Issues

Voters in 38 states will decide 174 statewide ballot measures on Election Day. Are any on your ballot?

Obama's and Romney’s Tax Plans: What Do They Mean for States?

Overlooked during the presidential campaigns is how Obama and Romney’s tax proposals could affect states. Here’s a look.

States Struggle With Unemployment Funds Still in the Red

More than $26 billion in lingering debt and billions in mounting interest have forced a number of states to scale back unemployment benefits, raise taxes, tap general funds and even turn to the private bond market.

Survey: As State Budgets Improve, So Does Trust in Government

A Gallup survey estimates that 65 percent of Americans have expressed a “great deal” or “fair amount” of trust in their state governments, a level not seen since the days before the financial crisis.

Sequestration: How a Spending Stalemate Would Affect the States

There is still time for Congress to avoid the “fiscal cliff” that would force billions of dollars in spending cuts and tax increases at the start of next year. But whatever happens, the states run the risk of being big losers.

Heat Wave, Budget Cuts Strain Utility Safety Net

Budget cuts and a blistering hot spell wave left states short on cash this summer while tackling high energy demand. Now many worry about having enough heat when winter comes.

With VP Pick, Romney Endorses Fed-State Overhaul on Food Stamps, Medicaid

By choosing Paul Ryan as his running mate, Mitt Romney has endorsed large changes in federal-state relations, particularly in dealings with food assistance and health care.

A Likely Reprieve for Food Stamp Program

The food stamp program has been facing the threat of deep reductions that would cut off benefits for millions in states all over the country. But a stalemate in Congress may stave off the pain.

Are States’ Unemployment Insurance Loans Dragging Down Economies?

Most states are still paying off those unemployment benefits that went out to millions of those without work during the recession, but it’s the way some are doing it that raises concern.

Tennessee’s Haslam To Relay Governors’ Wish For Online Sales Tax

A congressional committee will hear testimony Tuesday (July 24) on a bill that could send billions of dollars to the states each year. Tennessee Governor Bill Haslam and Wayne Harper, a Utah state representative, are among those scheduled to appear before the House Judiciary Committee to comment on the “Marketplace

States Consider Politically Fraught Welfare Waivers

States consider their options — and the politics — of the federal welfare waivers proposal.

Report: Without Major Overhauls, State Budget Crises Will Linger

A lack of government transparency and a focus on federal budget woes have masked state budget crisis, leaving them largely unaddressed, according to a report released Wednesday. Without major change, the report warns, soaring costs of Medicaid and shrinking tax collections will only worsen the problem.

Health Care Ruling, Elections Dominate Governors’ Meeting

The typical low-key summer gathering of the nation’s governors was anything but subdued this year. The U.S. Supreme Court’s recent decision leaving it up to the states whether to expand their Medicaid programs topped headlines coming from the National Governors Association meeting in Virginia.

Iowa Governor Blasts Pentagon Air Guard Cuts

Just days before he and other governors are scheduled to meet with Pentagon brass, Iowa Governor Terry Branstad attacked the Defense Department Thursday (July 12) for failing to work with governors on plans to drastically cut the size of the Air National Guard.

Infographic: S&P State Credit Ratings, 2001–2012

Private, independent credit rating agencies evaluate states’ financial health. States with the lowest grades typically have trouble keeping their spending in line with their tax revenues.

Food Stamp Fight on Capitol Hill

Congress is considering dramatic changes in the way states administer their food stamp programs.

Public-Sector Issues Erupt in Presidential Campaign

President Obama and GOP presidential hopeful Mitt Romney both found themselves over the weekend explaining comments they made involving the public sector.

For Many State Budgets, a Year of Relief

With their fiscal circumstances improving this year, many states had the luxury of debating tax cuts and spending increases for the first time since the recession began. Still, the progress is uneven and more challenges loom. Part one of a weeklong series.

Unemployment Tax Cheats on States' Radar

States are beginning to crack down on employers who avoid paying their full share of unemployment taxes through bogus schemes that often leave other employers making up the difference.

Budget Woes, Elections Top Lawmakers Priorities

State lawmakers from across the country are making their way back to their respective capitals for the 2004 legislative session. Two topics reign supreme for most of them: crafting budgets and their own reelections.

Clark Pledges to Aid States, Boost Homeland Security

Retired Gen. Wesley Clark would send $40 billion back to state and local governments and seek $40 billion more for homeland security if he were elected president of the United States, he said in an interview with Stateline.org.

Mixed Prospects for States in Election-Year Congress

Election-year politics and a tight congressional schedule might bring both good and bad news for states. Theres a good chance Washington will fork over more federal dollars for highways. But on the downside, Congress could cost states billions of dollars in taxes, sources on and off Capitol Hill tell Stateline.org.

Governor Races Likely to Turn on Budget Issues

In the 11 governors' races in 2004, voters won't have a Hollywood movie star to provide political sizzle. But they may get a chance to vote for a former baseball All Star, a top White House aide or the husband of a former governor. Six seats held by Democrats and five by the GOP are up for grabs; three states have no incumbent on the ballot, and four races are in key presidential swing states. Stateline.org has compiled a rundown of the races, issues and major candidates.

Let the Meager Times Roll; Half of States Face Shortfalls

State budgets are off the critical list, but dont put away the respirators just yet. The fiscal health of many states is still weak and in some cases anemic.

Governors to Press Their Issues with Federal Officials

This year's National Governors Association meeting in Washington, D.C., will have extra star power with the premier appearance of California Gov. Arnold Schwarzenegger (R). But the real focus will be on the tried-and-true issues of more federal money and less federal intrusion.

Governors Press Bush for More Highway Dollars, Jobs

State governors went to the White House to register concerns about jobs and highway dollars but failed to win offers for any new funds or programs. President Bush promised to set aside election-year politics and work with members of the National Governors Association. But one of his Cabinet members struck less than a conciliatory tone by calling the nations largest teachers union a terrorist organization.

Smokers Help to Balance State Budgets

Smoking may be bad for your health, but it's good for state revenues. Vilified for its health effects, tobacco becomes a popular choice to milk for extra dollars to close state budget gaps.

States and Public Colleges Consider New Relationships

The combined wallop of recession-driven budget cuts to higher education, swelling enrollment and escalating tuition fees has prompted state policymakers and educators to begin eyeing changes in states traditional support for higher education. At least five states are considering proposals to begin weaning public universities from state control.

States Stuck with Federal $29 Billion Tab, NCSL Says

The federal government is stiffing states $29 billion this year for an array of programs that Washington dictates but doesnt adequately fund, the National Conference of State Legislatures says in a report released today. Of that total, $9.6 billion comes from the federal No Child Left Behind education law.

Billions at Stake in Internet Tax Debate

Most people yawn and get that cloudy, glazed-eye look when discussing the Internet and taxes. State lawmakers, on the other hand, see a vibrant shade of green--as in money--when discussing ways to convert Internet commerce into sorely needed tax dollars for state coffers.

Job Creation Vexes States in a Weak Economy

State government--not private industry--was the biggest creator of new jobs in the country last month, a development that could explain why states are putting so much energy into keeping and growing new businesses within their borders. With jobs of utmost concern this election year, states are trying an array of strategies: from banning outsourcing of state-contract jobs to incubating high-tech startup companies.

Election-Reform Funds About to Be Sent to States

States are on the verge of receiving $2.3 billion in long-awaited federal money to help them revamp their election systems in the wake of the 2000 presidential race, which was marred by unprecedented ballot problems. But voters shouldn't expect reforms to be totally in place when they go to the polls in November. Many states won't be able to enact changes in time, and some states still aren't sure what to do about their voting equipment.

Soaring Gas Prices Unlikely to Affect Gas Taxes

Record-high gas prices may send you scrounging for loose change under the car seat, but so far only Florida is considering lowering its fuel tax to try to ease the pain. Other states have no immediate plans to follow suit unlike four years ago when at least two states temporarily removed gas taxes.

States Target Deceased to Recoup Nursing Home Costs

States are leaving no stone unturned in their search for ways to save money in health care not even gravestones. Georgia and Michigan are the last of the 50 states to consider estate recovery plans, in which the state seizes assets from the estates of dead patients who lived in nursing homes on the states tab.

High-Tech Humiliation Helps States Nab Tax Cheats

As Americans across the country rush to meet this weeks April 15 federal tax deadline, some states are trying a different approach to make sure taxpayers pay up: public humiliation on the World Wide Web. More than a dozen states publish on the Internet the names of businesses and individuals who havent paid their state taxes. Georgias program flushed out eight state lawmakers who were behind on their taxes and netted $300,000 in just six weeks.

Report: States Spend Less; More Cuts in the Offing

State spending declined this year to the lowest level in nearly 15 years, according to a new report from the Center on Budget and Policy Priorities.

Latest State Revenue-Raising Wrinkle: Taxing Services

What do getting a tattoo, having the dog groomed and docking a boat have in common? Depending on which state you live in, the bills for all these services may have an added state tax. At least 17 states are considering tax increases as lawmakers try to come up with budgets for fiscal 2005, which begins July 1 in all but four states. Hiking the tobacco tax is, by far, states most common revenue raising proposal, but the idea of taxing services is on the table in a handful of states.

State Budget Picture Shows Modest Improvement

Is the glass half-full or half-empty for state budgets? Thirty-two states expect to end fiscal 2004 with a modest surplus, but 33 states project budget gaps for fiscal 2005. The new data released April 28 from the National Conference of State Legislatures comes as many states are struggling to craft final budgets before a July 1 deadline and as state lawmakers converge in Washington, D.C., to attend the NCSL spring meeting.

States Wage Offensive to Keep Military Bases Open

With a year to go before the Pentagon launches a new round of military base closings, states are competing to keep their hometown installations off the target list. States are engaged in a serious offensive to preserve bases that can mean thousands of jobs and billions of dollars to local economies. Illinois has hired expensive Washington lobbyists. Texas, among others, is spiffing up around bases. Florida has decreed its strategy to keep 21 military bases open a state secret.

Tax Foe Renews Attack on National Governors Association

As many states enter the final budget planning stages for fiscal 2005, a conservative anti-tax group is once again prodding governors to take what it calls a cost-saving measure: drop out of the National Governors Association.

Money Mattering More in Judicial Elections

Big-money politics, expensive television advertising and special interest pressure are creeping into state judicial elections. A new report documents record amounts of money flowing into campaigns for justices for some states' highest courts, raising questions about whether judgeships are becoming too political. In the 38 states to elect their high court judges, reforms are slow in coming.

Medicaid Trumps Education in State Budgets

After three years of the worst fiscal situation in the last 60 years, states are now witnessing relatively robust revenue growth. While the Midwest is still lagging, the Rockefeller Institute of Government recently reported that state revenues were up 8.4 percent for the first three months of calendar year 2004. There are clearly differences of opinion regarding the sustainability of the current recovery, but there is cautious optimism that it will continue through 2005.

GAO Critical of Last Year's $10 Billion Bailout for States

Congress may want to think twice about signaling to states that Uncle Sam will rescue them each time a recession hits, the General Accounting Office, a congressional watchdog organization, suggested in a new report. Routine bailouts hardly give states an incentive to sock money away for tough times, the GAO said, amid other criticisms of last year's $10 billion federal bailout of states.

Statehouses Wind Down, but Budget Issues Remain

It's not yet summer vacation for many state lawmakers. Legislatures in 11 states are struggling on deadline to pass fiscal 2005 budgets to keep their governments running this year, and at least a dozen states may throw up their hands and call special sessions to finish business.

Tax Revenues Spell Good News for States

States collected more tax revenue in the first three months of 2004 than in nearly any quarter over the past four years, says a new report that provides yet another sign that states finally may be shaking off the fiscal headache that began in 01. The report by the Rockefeller Institute includes a state-by-state and region-by-region breakdown.

Panel Urges Unclogging Pipeline for Security Funds

State and local governments have received less than one-sixth of the federal funds allocated to them for homeland security defenses since the Sept. 11 attacks not because they wouldnt love to invest that money in emergency staff and equipment but, they complain, because red tape has prevented it. Now a task force of governors, mayors and other officials is asking the Congress and the White House to loosen up the regulatory logjam.

Medicaid Still Busting State Budgets

More than 65,000 poor and disabled Mississippi residents will lose government-funded health coverage through Medicaid on July 1. The states Medicaid rollback, although the most drastic this year to date, is just one of several health care cuts looming in the states. Despite a recent uptick in state revenues, many states still are struggling to maintain services and avoid restricting the $300 billion health care program that serves about 50 million Americans.

Capitol Hill Flirts with Reviving Sales Tax Deduction

Taxpayers in seven states are being used as bait to gain support for a major corporate tax package pending on Capitol Hill. Under a measure passed by the U.S. House, taxpayers in states without income taxes could once again deduct state sales taxes on their federal tax returns. Most state lawmakers like the idea, but some groups from different sides of the political spectrum give the deduction a thumbs down.

States Need Fewer Tax Hikes to Stay in the Black

States fiscal nightmare of the past four years appears to be ending. Fewer states were forced to raise taxes and fees in 2004 than last year, according to a new report from the National Conference of State Legislatures, a nonpartisan group of legislators meeting in Salt Lake City this week. Overall, states in 2004 hiked taxes $2.8 billion, significantly less than the $8.8 billion net tax increase in 2003. But final figures arent in yet from six states, including giants California and New York, which are without new budgets for fiscal 2005.

Bill Would Help States Fight Unemployment Tax Fraud

A prospective federal law could help states and small businesses save nearly half a billion dollars over the next five years by closing a loophole used by some companies to dodge high state unemployment taxes.

Funding Woes Plague State AIDS Programs

Hundreds of poor, uninsured people with HIV and AIDS in dozens of states are without access to life-sustaining medicines because state and federal funding levels cant meet the demand for service. Several states are banking on a quick infusion of federal cash to deliver AIDS drugs to more patients, but the search still is on for a long-term solution.

States Score Political Points with Sales-Tax Holidays

Back-to-school shoppers in 12 states are ringing up savings with a little help from their state lawmakers. From Connecticut to Texas, states are giving shoppers a temporary break this summer from paying sales tax on clothes, shoes, even computers. But critics say these state tax holidays are political gimmicks that score points with voters, but arent good fiscal policy.

A New Crop of Tobacco Money Coming to States

Tobacco may be bad for smokers health, but it continues to be good for state coffers. The giant tobacco settlement fund that states have been dipping into to balance their budgets just got an extra source of revenue. A major U.S. seller of generic cigarettes has agreed to pay states an estimated $1.7 billion over the next decade to avoid getting sued for health-care costs related to smoking.

Hot-Button Social Issues Cram State Ballots

Voters this November will tackle controversial issues that many statehouses couldnt resolve, including whether to ban gay marriage, boost the state minimum wage or have a lottery. Californians will have the longest list of ballot questions with 16.

Medicaid Is Fastest-Growing Squeeze on State Budgets

A new 50-state survey outlines the scope of Medicaids budget woes this fiscal year. The cost of caring for 52 million poor and disabled Americans who rely on Medicaid for health care is projected to jump 11.7 percent for states this fiscal year, four times faster than all other state expenditures, according to the report by the Kaiser Commission on Medicaid and the Uninsured.

Congress Restores State Sales Tax Deduction

Taxpayers in seven states will get a temporary break on their federal income taxes. A giant corporate tax bill that Congress approved over the Columbus Day weekend includes a provision to allow taxpayers in seven states without income taxes to deduct sales taxes instead from their federal returns for 2004 and 2005.

States Losing Fight Against Fat, Study Says

Alabama weighed in as the heaviest state in 2003 because nearly one third of its residents are obese, while Colorado ranked thinnest, with only 16 percent of its population considered obese, according to an Oct. 20 report analyzing states efforts to fight fat.

Anti-Tax Groups Target Statehouse Spenders

National anti-tax groups are targeting state lawmakers, particularly Republicans, who reneged on pledges not to hike taxes. Several GOP state lawmakers went down in the primaries, and tax-busting groups now have their sights set on Tuesdays general elections.

Budgets, Bonds and Ballots

The race between President George W. Bush and Senator John Kerry might have been the marquee match-up on election night, but, by no means was it the only closely monitored contest last week.

Congress Bans States from Taxing Internet Access

States will have to look to places other than the Internet for new venues for now. President Bush is expected to sign legislation that bans states from imposing a tax to access the Internet. But the nine states that already tax computer users when they go online can continue to do through 2007.

Changes to Special Education Law Give States More Leeway

State officials are praising Congress changes to special education law for giving states new flexibility and authority in schooling the nations disabled children, but they remain skeptical of the promise of more federal money. Under the bill, the federal government pledges to ramp up funding for special education over six years and finally cover 40 percent of states added costs of identifying and serving mentally and physically disabled children. But Capitol Hill lawmakers still will have to approve those increases annually.