No state with a budget gap the size of North Carolina is trying the "cuts-only" approach to combat budget shortfalls
RALEIGH (July 14) -- The vast majority of states facing budget gaps comparable to North Carolina's are raising revenues to protect their economies, updated information compiled by the NC Budget & Tax Center finds.
Not a single state with a budget gap the size of North Carolina's is adopting a cuts-only approach. Instead, states are choosing to raise revenue to preserve vital public investments that make up an economy's lifeblood.
"Though most states are facing the same financial hardships we are, the majority of those are saying that raising revenue is well worth it," said Jonathan Palmer, a research assistant with the NC Justice Center's Budget & Tax Center and the author of the report.
Even traditionally conservative states such as Mississippi are adopting balanced budget strategies that include tax increases. Twenty-five states have already raised taxes since the beginning of 2009, and 13 more are considering revenue-raising proposals now.
States with large budget gaps are increasingly turning to the balanced approach -- a mix of cuts and increased revenues -- to close budget gaps.
History, Palmer writes, vindicates out this approach. Raising revenues is consistent with the policy that 44 states took during the recession in the early 1990s, and 30 took during the 2001 recession. North Carolina is among the states that raised revenues during both recessions.
"The lessons of history are clear," said Palmer. "Even if it were possible to balance the budget with cuts alone, it would devastate families and the economy."
The report is available online at: http://www.ncjustice.org/?q=node/343
FOR MORE INFORMATION, CONTACT: Jeff Shaw, communications director, NC Justice Center, 919.863.2402, 503.551.3615 (mobile).