Rewarding Corporations While Punishing Workers
March 18, 2011, 5:00am

As a result of the Great Recession, states across the country are dealing with depressed tax revenues and record budget shortfalls, forcing them to make difficult choices to fulfill their constitutional balanced budget requirements. Some governors are pushing for progressive revenue raisers, in addition to steep spending cuts, to reduce these budget gaps. For instance, Govs. Brian Schweitzer (D-MT), Mark Dayton (D-MN), and Dan Malloy (D-CT) have all proposed closing corporate tax loopholes and cutting special interest tax breaks to bring more revenue into their states. However, several Republican governors have chosen a different path, proposing to shift the burden of deficit reduction onto middle- and lower-class Americans and public workers, gutting vital and popular services while increasing taxes on those who can least afford it. But these same governors have seen fit to simultaneously dole out new tax cuts to corporations, proposing increased corporate giveaways even as they ask their most vulnerable constituents to sacrifice. Today, the Progress Report evaluates the priorities conservatives have set in twelve states:

— 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 two 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.” Brewer eagerly signed into law tax cuts for businesses that will cost the state $538 million, and the state is proposing another $33 million in tax breaks for the for-profit college industry.

— FLORIDA: At a Tea Party rally last month, Gov. Rick Scott (R) unveiled his budget, telling supporters that he would make the state the “most fiscally conservative” in the nation. He proposed slashing corporate income and property taxes, laying off 6,700 state employees, cutting education funding by $4.8 billion, and cutting Medicaid by almost $4 billion. Scott’s ultimate plan is to phase the Sunshine state’s corporate income tax out entirely. He has also proposed, with the Republican legislature, to gut Florida’s unemployment insurance system, leaving unemployed workers “with much less economic protection than unemployed workers in any other state in the country.” Local school officials have called Scott’s plan for school district funding “devastating.”

— GEORGIA: Last week, the Georgia House passed a 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.

— 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. 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, cutting universal preschool for 4-year-olds, closing Iowa workforce development offices, and making even deeper cuts to public universities.

— KANSAS: Facing a $493 million budget shortfall, Gov. Sam Brownback (R) has called for eliminating his state’s 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.

— 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, businesses and the rich. He also exempted himself from the pension changes he wants other public employees to accept.

— MICHIGAN: Gov. Rick Snyder’s (R) budget would make Michigan’s already regressive tax system even worse 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 education and local government. Snyder also wants to raise personal taxes by 30 percent — an increase that will fall ten times harder on Michigan’s lowest income residents than its richest. Snyder also signed into law a new measure that allows him to declare a “financial emergency” in Michigan towns and schools districts, and then give a state-appointed financial manager power to dismiss local officials and void contracts.

— 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 has called for $200 million in business tax cuts, while proposing to cut mental health services, cut $540 million from Medicaid, and withhold 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.

— OHIO: Gov. John Kasich (R) has proposed cutting 25 percent of his state’s education budget, $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 that these cuts are more about politics than 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 Ohio 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. Kasich has also announced that he’d like to open his state’s parks to oil and gas drilling.

— 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 cutting $1 billion in education funding. But the state could raise significant revenue from ending special interest tax breaks and by levying a fee on companies that use the environmentally destructive “fracking” technique to obtain natural gas, which has reaped them hundreds of millions of dollars in profits. Pennsylvania is the only state in the nation’s top 15 gas producers that doesn’t levy a tax on this environmentally destructive industry, but Corbett has refused to tax these companies, many of which helped fund his gubernatorial campaign. Corbett’s education cuts also hit students from poor districts ten times harder than students in wealthier districts.

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

— WISCONSIN: The tax cuts Gov. Scott Walker (R) signed into law earlier this year worsened his state’s fiscal condition and were used as justification for his bill stripping collective bargaining rights from public workers. Now Walker is planning to 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. He has also proposed legislation to dismantle his state’s Medicaid system.

Prime Minister David Cameron said today that British air force fighters will begin heading to the Mediterranean “in the coming hours” to join the international coalition in implementing a no-fly zone over Libya. “The Defence Secretary and I have now instructed the Chief of the Defence Staff to work urgently with our allies to put in place the appropriate military measures to enforce the [UN] resolution,” he said.

Update: Libya’s deputy Foreign Minister has declared that the government is ready to accept a cease-fire after the UN authorized a no-fly zone last night to protect civilians from Libyan pro-government forces. “We are ready for this decision [a ceasefire] but we require an interlocutor to discuss how to implement it,” Khalid Kaim said.

Saudi Arabia’s King Abdullah “announced on Friday billions of dollars in handouts for his people and boosted his security apparatus” in an apparent attempt to head off a nascent pro-democracy movement. The announcement comes at a time when the Saudis have sent over a thousand troops to neighboring Bahrain to put down a pro-democracy uprising there.

Seven Bahraini opposition leaders were arrested in early morning raids by the government. The U.S. government has been calling for the government to negotiate with the opposition, but the arrests “left it unclear who could speak.”

“Opposition to the war in Afghanistan has grown in the House,” with 93 lawmakers, including eight Republicans, voting yesterday for a bill that would have directed President Obama to remove U.S forces from the country by the end of the year. While the measure still fell far short of passing, it garnered 30 more votes than a similar measure introduced a year ago.

USA Today has found that the “suicide rate for female soldiers triples when they go to war, according to the first round of preliminary data from an Army study.” But “the suicide risk for female soldiers in Iraq or Afghanistan is still lower than for men serving next to them.” The findings “also show that marriage somehow helps inoculate male and female soldiers from killing themselves while they are overseas.”

For the first time in its history, the Washington Post-ABC News survey has found that a majority of Americans back gay marriage. Five years ago, support for gay marriage was at only 36 percent, but now 53 percent say it should be legal.

A Wall Street Journal study found that 50 major corporations’ CEOS took home $126.1 million in 2010 bonuses, “the biggest gain in at least three years.” But under the new Wall Street reform law taking effect this year, every business whose stock-market value exceeds $75 million will have to let investors voice their opinions on such rewards.

President Obama “ordered a safety review of the nation’s nuclear power plants in an effort to quell mounting fears sparked by the unfolding catastrophe in Japan.” Yet he also defended American nuclear plants, saying they’ve been declared “safe for any number of extreme contingencies.”

And finally: In order to buy time for two colleagues who were running late to a vote, Rep. Dan Burton (R-IN) “listed movie recommendations, used his cellphone and considered doing impersonations” on the House floor yesterday. Burton’s film recs? The “Lord Of The Dance 3D,” which was released Friday. “I just decided to wing it for a little bit and be a little interesting,” he told reporters afterwards.