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A Balanced Approach to a Responsible State Budget: Maximizing Revenue without New Taxes

Both the House of Representatives and the Senate have initiated a “new” state budget process for FY 2012. In contrast to longstanding practice, they have adopted General Funds revenue estimates prior to determining appropriations. The two chambers are using different sets of revenue estimates, however. The estimates adopted by the House would require appropriations committees to cut $1.4 billion from the Governor’s aggregate recommendation for state agencies and programs. This report examines the House and Senate revenue estimates and presents a “revenue maximization plan” that would enable the General Assembly to craft a balanced and responsible budget for FY 2012 — without new taxes. The combination of adopting the Senate’s revenue estimates (derived from the Commission on Government Forecasting and Accountability), selectively leveraging revenue from other state funds, and decoupling state tax law from federal “bonus depreciation” would create a fiscal year balance of about $900 million. A substantial portion of the positive balance should be used to restore funding for human services programs that are subject to devastating cuts in the Governor’s proposed budget. The remaining surplus would be applied to the state’s backlog of unpaid bills. Download and read report

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