The fiscal cliff negotiations currently taking place in Washington will have both good and bad effects on states’ revenues, a panel of tax experts said Friday.
While state budgets are still reeling from the great recession of 2008, which caused states to face their “biggest challenges in 70 years,” they face further budget upheaval as the federal government addresses the fiscal cliff and sequestration cuts, said Nicholas Johnson, vice president for State Fiscal Policy at the Center on Budget and Policy Priorities.
Johnson joined a panel of tax experts during a conference at the National Press Club sponsored by Tax Analysts, which provides non-partisan tax news and analyses. The panel of tax experts examined issues related to “state fiscal cliffs” and their implication for state tax policy.
“Not only do states face their own cliffs, both short and long term, they also will be greatly affected by what happens in the coming weeks in Washington,” said Tax Analysts President and Publisher Christopher Bergin. “There’s a real connection between the federal budget and state budgets that many people in Washington don’t spend much time thinking about, one that could ultimately wind up with states feeling some of the greatest effects of the fiscal cliff.”
Bergin moderated the discussion, which in addition to Johnson included Donald J. Boyd, co-executive director of the Task Force on the State Budget Crisis; Joseph Henchman, vice president for Legal & State Projects, Tax Foundation; and Cara Griffith, legal dditor of State Tax Notes.