Many states are running out of money, plain and simple. Although it’s not always easy to determine the best solution to help the government fund essential programs and services and keep residents happy, the bottom line often comes down to one grim answer: Raise taxes.
According to taxjusticeblog.org, more than 30 states are experiencing some sort of revenue shortfall. And, the contributing factors are as varied as the geographical locations of the state and the needs of the citizens in that area. Some have been deeply affected by a steep plunge in oil prices, some are still reeling from too-good-to-be-true tax cuts and some are simply not sure how their state’s finances, or the U.S. economy as a whole, will fare under the new White House administration.
So, what is are state governments doing to combat fiscal disaster? For the most part, many are trying to think outside the proverbial box, seeking ways to improve things before resorting to drastic measures.
As a result, some states are assessing new ways to use revenues generated from existing taxes. Sure, this may mean difficult, likely unpopular decisions will need to be made on just where the money is best spent. However, for the most part, state taxpayers are likely to be happier in the long run if they do not see an increase in existing taxes to pay for what they already believe is a decline in services and if no new taxes are added.
Still, some states may find that the situation is too dire or cooperation is just not there to justify revenue re-distribution. Popular ideas of late for new ways to bridge the funding gap in those states include legalization of marijuana and gambling and increases in gas, cigarette and entertainment taxes.
Of course, there is no perfect solution. But, at least most can agree that something needs to be done, and soon.
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