Tennessee Taxpayers Get a Bailout (Along with Everyone Else)

Not a fan of the stimulus? Consider this:

State and local governments collected 2.9% less in tax money in Q1 of this year than in Q1 of 2008. Fortunately, the federal government stepped in to bail them out.

Thanks to quick bursts of stimulus money from Washington, the total cash available to state and local governments is 1.6% more than the first quarter of last year. Not quite enough to keep up with inflation, but still a huge help. Without the stimulus, the states would be in a deep, deep mess.

Thank goodness we are one nation, indivisible. And thank goodness the Republicans didn’t get to stand in the way.

With the dramatic upswing in money from Washington and downturn in various tax revenues, federal funds are now the biggest individual source of income for state governments for the first time ever.

Another interesting tidbit from the same article:

State sales tax revenues are down 2% nationwide because of the economic crisis.

But state income tax revenues are down 11%.

I still believe an income tax is a stronger, fairer system but I'm not going to close my eyes (or my blog) to interesting facts just because they're inconvenient to my position.

Today's Bad News Is Brought to You by the Number Three

And the top three states for the biggest fall-off in tax revenues thanks to economic disaster that President Bush is leaving behind…

1. Florida
2. Arizona
3. Tennessee

Projections of this year’s state budget deficit are now reaching $1 billion.

You Say You'll Change the Constitution, Well, You Know...

The states want federal money to put people to work on roads, school repairs, and other infrastructure projects. Too bad the federal government is broke too. The difference is, most states are constitutionally required to have a balanced budget (Tennessee included) while the federal government can spend, spend, spend endlessly on credit.

The GOP used to demand a Constitutional amendment to require a balanced budget. It was one of many things I agreed with them on. Whatever happened to that? Deficit spending should require a two-thirds vote in Congress. That way we can do it in times of desperation, like now, but not just on the whim of an idiot president.

Blame Bush

With the State’s tax revenue still swirling around the economic toilet bowl, Governor Phil Bredesen will ask all State departments to develop plans to cut their budgets by 10% or more. That’s up from the 3% cuts he originally requested.

Blame Bush

It now looks like the State’s tax revenue is going to fall $800 million below projections. Raising the state sales tax should not be an option. We just tripled cigarette taxes last year. Assuming we drain half the State’s rainy day fund, that’s still $425 million we have to cut. Ouch.