Closing budget deficits is not always the optimal fiscal policy in the short term  or the medium term. Instead, budgets should simply be seen as a tool with which to boost living standards. Sometimes policy needs to move the budget toward a deficit to achieve this; at other times, the budget needs to be moved closer to a balance or surplus.

Reducing budget deficits is too often presented as a key budgetary challenge. Defining fiscal policy this way in the present economic environment, however, is simply bad economic analysis. Instead, the most pressing economic task should be viewed as finally securing a durable return to genuine full employment.


The Status of Working Families in Indiana: 2015 Report

The Status of Working Families is a biennial report that analyzes the general state of Indiana’s economy as it relates to working families by examining data on poverty, labor force and wages, followed by working-family friendly policy options. This year, our report offers access to the data, online and interactively, for users who wish to share or further explore our findings. This analysis guides our research and subsequent policy recommendations that follow each chapter. Measuring the economic health of Hoosier families is a central function of the Institute’s mission: to research and promote public policy that provides Hoosier families the ability to achieve and maintain economic self-sufficiency.

Taking Bold Action on Transportation Will Give New Jersey’s Economy a Firm Foundation for the Future

In order for its economy to remain competitive, New Jersey needs a state-of-the-art transportation network and must be willing to make the investments this requires. With the funding needed to restore this essential but deteriorating lifeline about tapped out, policymakers must act with urgency to reverse a steady decline. After years of avoiding this problem – settling at best for temporary, inadequate measures ­– New Jersey needs bold action to fix its transportation system.

To maintain and improve the state’s roads, bridges and mass transit systems, as well as to begin projects critical to our future, New Jersey should increase funding for the state Transportation Trust Fund – which has stagnated for a decade – by 25 percent for the next 10 years, up to $20 billion over the decade from $16 billion. To do so, the most sensible option is to extend the state’s 7 percent sales tax to gasoline. Based on current gas prices of approximately $3.50 per gallon, the imposition of the sales tax would be the equivalent of a 24.5-cent-per-gallon increase.

This would not only help put the Transportation Trust Fund on solid footing, but it would also prevent the resources generated from the present gas tax from losing their purchasing power over time, jeopardizing the very transportation system the money is supposed to preserve.

Who Pays? The Cost of Kansas’ Tax Cuts for Local Communities

Kansas has sharply reduced state support for schools, libraries and other community services in recent years, forcing towns and cities to cut programs that Kansans depend upon or raise more money locally to sustain them. While the cuts by the state were initially prompted by the Great Recession, the substantial income tax cuts Kansas lawmakers enacted in 2012 and 2013 are draining even more resources and making it nearly impossible to replace vital aid to Kansas communities.

Since the recession hit in 2008:

  • State aid for schools is down 8 percent, after adjusting for inflation, and state funding to help teachers improve their skills has been eliminated. These cuts are leading schools to increase class sizes; lay off teachers, counselors, nurses, and school librarians; and pass more costs on to parents by raising fees for school activities all coming at a time when a well-educated workforce is more important than ever to prospective employers.
  • State support for libraries has been cut by over 30 percent, forcing reductions in operating hours, cutbacks in book purchases, or the establishment of waiting lists for summer reading programs. In some areas, libraries are the only resource many people have for filling out online job applications and furthering their education.
  • State aid for local health services is down more than 12 percent. Local health departments play a key role in providing health services, such as childhood immunizations, and addressing health emergencies in both rural and urban communities across Kansas.
  • State support for community-based corrections has been cut by 21 percent. This vital program is helping make neighborhoods safe and reducing the number of repeat offenders, ultimately saving taxpayers money.

These deep cuts pose a serious problem for the state’s ability to compete in the future. Our economy, and the health of our towns and cities, depends on wise investments in the education, health, and safety of our people.

A “Lost Decade”: Revisiting Kansas’ past, so we can redirect its future

Claims that Kansas’ failed tax-cut experiment was justified as a response to a “lost decade” for the state’s economy aren’t borne out by what actually happened at that time. If anything, there is strong evidence that Kansas’ economic situation is worsening since the tax cuts began to weaken the state’s ability to make public investments in schools and other drivers of job growth and widespread prosperity.