Even as it seems like Massachusetts and other states are limping out of the recession and moving toward fiscally healthier budgets, a new report paints a much more pessimistic view of the financial challenges facing states. The report, covered in this New York Times story, looked specifically at six large states other than Massachusetts, but the challenges facing those six states sound awfully familiar.
Those challenges include rebuilding Massachusetts after the severe budget cuts of the last four years while simultaneously coping with what are likely to be huge cuts in federal aid to states in 2013. In addition, traditional sources of state revenue are eroding as more retail sales move to the tax-free internet and as consumers spend more money on services, which are rarely taxed, and not on goods, which are taxed. Massachusetts faces all of these problems, in addition to a transportation infrastructure that's in shambles.
The report notes that some states are really trying to "unbuild" government. Massachusetts has another option. We can substantially reform our tax code, raise significant new revenue, make our tax system fairer, and invest in our communities instead of continuing down the road of dismantling our schools, our colleges and universities, our social safety net, and our cities and towns.