Donatelli: Federal Budget Can be Balanced With Spending Cuts

Republican-led states already have succeeded with no new taxes

As the budget season rolls on, a remarkable trend is emerging: States with Republican governors and legislative majorities are balancing their budgets and reforming key programs without raising taxes. Conversely, states with Democratic governors and legislatures are content to raise taxes without basic program reforms. This philosophical and partisan divide focuses on the age-old question of the proper size and scope of government and Republicans and Democrats are providing starkly different answers.

Republican led states that have enacted budgets without tax increases include Ohio, Wisconsin, Pennsylvania, Indiana, Maine, Texas and Florida. Pennsylvania, Texas and Florida reduced spending in absolute terms. In addition, virtually all of these states offered some tax reductions for business investment designed to generate more job growth. Indiana cut their corporate tax rate. Maine cut their top marginal individual rate at a time when Democratic governors are trying to raise theirs. Pennsylvania phased out the business franchise tax for thousands of small businesses. New Jersey put a cap on local property tax increases and Ohio phased out the “death tax.” These Republican leaders realize that while the spending side must remain in check, growing revenue and generating new jobs is the long-term answer to their states’ fiscal health and financial future.