In another important sign that the economy is bouncing back, many states are enjoying budget surpluses or are breaking even. Cash reserves are at their highest levels since 2008, before the onslaught of the Great Recession.
By the end of the fiscal year this summer, state coffers are projected to be flush with a collective $41.4 billion, according to the National Conference of State Legislatures. That’s roughly the equivalent of 9 percent of overall state revenue, a sizeable increase since 2010 when those funds were at the low level of 5.2 percent.
Now that revenues are rebounding, governors have the rare opportunity to decide whether this cash on hand should be used save government jobs, to cut taxes, or to potentially boost economic growth. - Read more at The Wall Street Journal
WOMEN TO PAY MORE FOR LONG-TERM CARE Longevity used to be a good thing. Not any more, at least not for women. Genworth Financial, a Virginia-based insurance company, is planning to implement gender-based pricing because women tend to live longer than men and are more likely to need long-term care. - Read more at The Fiscal Times
CONGRESS CONSIDERS PENALIZING CORPORATE DEBT – House and Senate members are weighing the possibility of limiting the tax deductibility of interest payments for businesses, as part of a broad tax reform package. Experts say the corporations most likely to be hurt by the proposed tax hike are those that borrow heavily, like capital-intensive manufacturing groups, hedge funds and private equity investment companies. - Read more at The Financial Times
WEEKEND RECAP: SENATE PASSES A BUDGET After pulling an all-nighter and voting for 13-continuous hours, the Democratic-controlled Senate passed its first budget in nearly four years on Saturday at 4:56 a.m. The Senate’s 2014 budget, which passed along a largely party-line vote of 50 to 49, reduces the deficit by $1.85 trillion over the coming decade (according to the budget’s authors) with an additional $1 trillion tax hike and a modest reduction in government spending. Of course, the Senate-passed budget -- much like one recently passed by the Republican-controlled House mainly serves as a Democratic wish list. It’s not clear whether the two chambers will try to reconcile the big differences in their budgets, or simply use them as ammunition in upcoming partisan debates over taxes, spending and entitlement reform. - Read more at The Fiscal Times
LAWMAKERS WARM TO INTERNET SALES TAX… During lengthy debate on the budget Friday, the Senate voted 75 to 24 for a non-binding measure that would give states the power to collect sales tax on Internet purchases that residents make from out-of-state companies. Though the vote was largely symbolic, it signaled that the taxing measure has strong support from both sides of the aisle and could pass if offered in the form of binding legislation. Supporters of the Internet sales tax estimate that $20 billion in sales tax goes uncollected every year from out-of-state online merchants. - Read more at U.S. News
…AND COOL TO CARBON TAXES Also included in debate on Friday was a nonbinding proposal targeting the use of taxes on carbon emissions. The amendment offered by Sen. Sheldon Whitehouse, D-R.I., would ensure that any revenue from a carbon tax would go toward reducing the deficit. The measure not surprisingly was overwhelmingly rejected, illustrating that the Obama administration might be alone in its efforts to fight climate change by possibly taxing carbon emissions from power plants and other facilities. - Read more at The Hill