REPORT: In 12 States, GOP Plans To Slash Corporate Taxes While Increasing Burden on Working Families

Paul Breer and Kevin Donohoe

ThinkProgress has been documenting conservative efforts to shift the burden of record budget shortfalls onto middle-class Americans, while simultaneously doling out tax cuts to corporations. While progressive governors have proposed raising revenue from those who can afford it, alongside painful cuts to programs, Republican governors have unveiled budgets that cut taxes for corporations and raise them on the middle-class and working poor. In this report, ThinkProgress evaluates the priorities conservatives have set in twelve states:

NEW JERSEY: Last year, Gov. Chris Christie’s (R) budget raised taxes on the working poor and middle-class by cutting the state’s Earned Income Tax Credit and homestead rebates — yet still found money for lucrative corporate tax cuts. This year, Christie’s budget calls for $200 million in business tax cuts, while cutting mental health services, $540 million from Medicaid, and witholding property tax rebates for seniors until public workers give up many of their health and pension benefits. Many New Jerseyans have said they prefer a tax on millionaires to Christie’s draconian cuts.

MICHIGAN: Gov. Rick Snyder’s (R) budget would make Michigan’s already regressive tax system even more unfair for the state’s poorest residents. The plan cuts taxes on business by more than 86 percent while slashing $1.2 billion in funding for “schools, universities, local governments and other areas.” Snyder also wants to raise personal taxes by 30 percent — an increase that will fall disproportionately on Michigan’s lowest income residents.

GEORGIA: Last week, the Georgia House passed an austerity budget that will increase health insurance costs by more than 20 percent for state workers, teachers and retirees and cut funding for state universities by $75 million. The House has already gutted the state’s HOPE scholarship program, and is now considering implementing a regressive new tax system that would lower income taxes for the rich while raising the sales tax on basic necessities. House Majority Leader Larry O’Neal (R), meanwhile, has introduced a bill that would implement a flat income tax rate and cut corporate taxes by 33 percent.

FLORIDA: At a Tea Party rally last month, Gov. Rick Scott (R) unveiled his budget, telling supporters he would make the state the most “fiscally conservative” in the nation. The budget would slash corporate income and property taxes, lay off 6,700 state employees, cut education funding by $4.8 billion, and cut Medicaid by almost $4 billion.

OHIO: Gov. John Kasich (R) has proposed cutting 25 percent of schools’ budgets, $1 million from food banks, $12 million from children’s hospitals, and $15.9 million from an adoption program for children with special needs. A Kasich staffer revealed yesterday that these cuts are more about politics then budget-balancing, telling the Cincinnati Dispatch that “even if there weren’t an $8 billion deficit, we’d probably be proposing many of the same things.” The plan includes tax cuts for oil companies, a repeal of the estate tax and an income tax cut for the rich that former Gov. Ted Strickland (D) halted last year because of the state’s fiscal crisis.

IOWA: Gov. Tom Branstad (R) began this year proposing a budget that included a $200 million tax cut on commercial property taxes and corporate income but would freeze spending on schools, cut $42 million to state universities and lay off “hundreds” of state workers. Since then, the Governor has already begun laying off state nursing home workers and frozen funding for mental health services. The budget is now moving through the politically divided legislature, where Republican-controlled House committees have gone even further, approving tax refunds for upper-income Iowans while cancelling infrastructure investments, eliminating preschool for 4-year-olds, closing Iowa workforce development offices, and making even deeper cuts to public universities.

PENNSYLVANIA: Gov. Tom Corbett (R) presented a budget last week that would cut taxes for corporations, while freezing teacher salaries, cutting dental care for Medicaid recipients, and eliminating more than half of the state’s universities. Yet the state has lots of revenue potential in northern Pennsylvania, where out-of-state energy companies’ “fracking” of natural gas has reaped them hundreds of millions of dollars in profits. Corbett has refused to tax these companies, many of which helped fund his gubernatorial campaign, and has instead opted to lay of more than 1,500 state workers.

MAINE: Despite calling for “shared sacrifice” Tea Party Gov. Paul LePage’s (R) budget would cut income taxes for Maine’s wealthiest one percent, while actually raising property taxes for the state’s middle class. This so-called “jobs budget” freezes healthcare funding for working parents, cuts money for schools and infrastructure and raises the retirement age for public workers. Yet LePage was still able to find more than $200 million in tax cuts for large estates, business and the rich.

WISCONSIN: The tax cuts Gov. Scott Walker (R) signed earlier this year worsened his state’s fiscal condition, so now Walker is planning to raise taxes on the poor, eliminate $26 million in tax credits for seniors and single mothers and cancel property tax rebates for low-income Wisconsinites making less than $24,000 a year.

SOUTH CAROLINA: Gov. Nikki Haley (R) has proposed ending the state’s corporate income tax, even while she calls for cutting physical education, K-12 schools, and Medicaid. Haley has received pushback from Republican colleagues: last week the legislature rejected her plan to force state employees to pay more for health insurance.

KANSAS: Facing a $493 million budget shortfall, Gov. Sam Brownback (R) has called for eliminating the corporate income tax while proposing a $50 million cut to education. With majorities in both Houses, Republicans have proposed a cut to the federal Earned Income Tax Credit that would push 6,500 families below the poverty line.

ARIZONA: Last October, as she ignored 26 other possible funding solutions, Gov. Jan Brewer (R) implemented painful cuts to the state’s Medicaid program, which resulted in 2 deaths and left 98 Arizonians waiting for transplant funding. After months of protests, Brewer finally agreed to set aside $151 million in an “uncompensated-care pool to pay health-care providers for ‘life-saving’ procedures, including transplants.” However, House Republicans refused to restore funding for organ transplants because, as House Appropriations Committee chair Jon Kavanagh (R) said, “not enough lives would be saved to warrant restoring millions in budget cuts.” Then, while peoples’ lives were in danger, Brewer eagerly signed tax cuts for businesses that will cost the state $538 million.

Despite calling for “shared sacrifice” in their plans, Republican governors have yet to ask corporations to share the burden of record budget shortfalls. Ultimately, choosing big business over Main Street could undermine the already slow economic recovery. However, a Main Street Movement in many of these states has emerged to protest placing the burden of deficit reduction solely onto the backs of the middle-class and public employees.



ThinkProgress » REPORT: In 12 States, GOP Plans To Slash Corporate Taxes While Increasing Burden on Working Families