Due to the effects of the Great Recession, states across the country are facing severe budget shortfalls for the next few years. According to the Center on Budget and Policy Priorities, cumulative state budget shortfalls will total $180 billion in fiscal year 2011 and another $120 billion in 2012.
As my ThinkProgress colleague Zaid Jilani wrote, states have reacted to their fiscal deterioration in a couple of ways. Conservative-led governments are “refusing to responsibly raise revenues and instead slashing their states’ social and infrastructure spending,” while “progressive-led state governments are asking their states’ most prosperous citizens to sacrifice a little so that spending on the most vital programs can be protected.”
This week, two states — Minnesota and South Carolina — tried to act responsibly by raising revenues in ways that won’t damage the economic recovery. Minnesota attempted to increase its income tax on its wealthiest residents, while South Carolina attempted to boost its cigarette tax, which is the lowest in the nation. But both measures were vetoed today by each state’s respective Republican governor:
— Gov. Tim Pawlenty made good Tuesday on his threat to veto a Democratic plan to repair Minnesota’s budget because the bill includes a tax increase…”It is nonsensical to increase taxes on job providers merely weeks after I signed a bill to provide tax incentives for Minnesota businesses to grow jobs,” Pawlenty wrote to lawmakers.
— Gov. Mark Sanford announced his veto Tuesday afternoon of raising the state’s cigarette tax to 57 cents from 7 cents per pack…”In these difficult economic times, we believe it would be sheer folly to impose the largest tax increase since 1985,” he said.
Minnesota is facing a $2.9 billion deficit, while South Carolina’s lawmakers were caught “flat-footed” last week by a $213 million unanticipated shortfall. Yet both Republican governors saw fit to veto common sense revenue raisers, which could foist the effects of budget cuts onto vulnerable residents who need social services and students who have already seen education budgets slashed to ribbons.
In fact, both states have already cut education funding in response to the economic crisis. Minnesota’s proposed income tax increase would have raised $395 million, helping the state avert a “cash crunch” that could result from a recent court ruling that Pawlenty overstepped his bounds in cutting money for schools. Meanwhile, the cigarette tax increase in South Carolina — where the cigarette tax is ten cents lower than anywhere else in the country — would have gone towards placing $125 million in the state’s Medicaid trust fund.
“The question is: Are we going to be leaders who stand up and protect people who don’t need our protection, or are we going to make the choice to be leaders who stand up and vote to protect people who need us?” asked Minnesota State Rep. Ryan Winkler (D). From their actions, it’s very clear where Pawlenty and Sanford stand.