WASHINGTON -- Increased health care spending and uncertainty from the federal government over spending has complicated the fiscal picture for states at the same time there has been revenue growth.
The fall 2012 version of the Fiscal Survey of the States, released Friday by the National Governors Association and the National Association of State Budget Officers, shows that states are "modestly recovering" but the outlook remains uneven across state lines. In a conference call with reporters Friday morning, Scott Pattison, the executive director of NASBO, and Dan Crippen, NGA executive director, indicated that all states have not reached pre-recession levels in terms of economic activity. Pattison and Crippen said that the current debate over federal spending cuts has led to an uncertain outlook for state governments.
Pattison said a series of federal cuts triggered by the sequestration process would have an impact on states trying to resume spending on programs cut in previous years. "We're not back to where we need to be," Pattison said. "The data shows money tight for the foreseeable future. With uncertainty at the federal level there is not enough money to make up for those cuts."
Crippen said that governors have been reminding President Barack Obama and congressional leaders of the need to consult with state leaders in the ongoing fiscal cliff talks. He said that with health care spending for Medicaid and government retirees continuing to rise and be a larger portion of state budgets, there is a need for states to be included in talks about the future of federal Medicaid spending.
The Survey showed that the two growth areas for state spending center on health care and K-12 education spending. The full report can be viewed here.
Crippen noted that state leaders are also grappling with a hole in the federal highway trust fund, which has caused issues with state transportation spending. He said with a federal gas tax hike unlikely, governors and state legislatures will have to find ways to increase transportation spending dollars at the state level.
Pattison said smaller, particularly those with energy and agricultural resources have been seeing a more unbeat economic outlook. Among those are North Dakota, which has seen a rise in state revenue collection and economic growth due to a rising oil and gas sector in the western part of the state.
Crippen used the call to renew a push by state governments for federal legislation allowing states to collect sales tax on online puchases. Currently, consumers have to report that sales tax to states individually, which states note is an uncommon practice and has lead to budget holes. The National Conference of State Legislatures organized a lobby day on Capitol Hill for state legislators during their fall forum last week.
Figures provided by NCSL show that states could collect $23.2 billion in revenue from online sales. Former Kansas Revenue Secretary Joan Wagnon told HuffPost last week that the legislation has its best shot of passing this year after a push that started in the late 1990s. Wagnon, now the chairwoman of the Kansas Democratic Party, said the legislation would also benefit rural states, since many rural consumers prefer to shop online rather than use up a tank of gas to drive to stores.
Crippen said that with a growing trend in online shopping, states will continue to suffer until Congress passes a bill.
"In the meantime you can expect sales tax to continue to decline," he said.
CORRECTION: An earlier version of this article misspelled the last name of Dan Crippen, executive director of the National Governors Association.
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Sen. Saxby Chambliss (R-Ga.)
Chambliss, a conservative Republican up for reelection in 2014, started the <a href="http://www.washingtonpost.com/blogs/the-fix/wp/2012/11/26/the-gops-read-my-lips-moment/" target="_hplink">media surge</a> of prominent GOP lawmakers breaking ranks with Norquist last week. He told a local news station on Nov. 21 that he thought the pledge itself was <a href="http://www.huffingtonpost.com/2012/11/23/saxby-chambliss-grover-norquist_n_2177333.html" target="_hplink">outdated</a>. "I care too much about my country -- I care a lot more about it than I do about Grover Norquist," Chambliss said. "Norquist has no plan to pay this debt down. His plan says you continue to add to the debt, and I just have a fundamental disagreement about that and I'm willing to do the right thing and let the political consequences take care of themselves." As a member of the "Gang of Six" --lawmakers focused on a path towards deficit reduction -- Chambliss has proposed raising a significant amount of new revenues through tax reform.
Rep. Peter King (R-N.Y.)
King championed Chambliss' take on the ATR no-tax-increases pledge when speaking about deficit reduction on NBC's "Meet the Press" on Sunday. "I agree entirely with Saxby Chambliss," King <a href="http://www.washingtonpost.com/blogs/the-fix/wp/2012/11/25/lindsey-graham-peter-king-break-with-grover-norquist/" target="_hplink">said</a>. "A pledge you signed 20 years ago, 18 years ago, is for that Congress. ... The world has changed, and the economic situation is different...For instance, if I were in Congress in 1941, I would have signed a declaration of war against Japan. I'm not going to attack Japan today. The world has changed, and the economic situation is different."
Sen. Lindsey Graham (R-S.C.)
The South Carolina senator took to the news shows on Sunday to push for a solution to the fiscal crisis, even if it requires that the <a href="http://www.huffingtonpost.com/2012/06/12/lindsey-graham-grover-norquist-anti-tax-pledge_n_1590356.html" target="_hplink">GOP gives some ground on new revenues</a>. He told ABC's Jonathan Karl that he would be willing to break the pledge in order to ensure the fiscal solvency of the United States -- provided, of course, that Democrats would cede some serious structural reforms to entitlement programs. "When you're $16 trillion in debt, the only pledge we should be making to each other is to avoid becoming Greece, and Republicans -- Republicans should put revenue on the table," Graham <a href="http://www.newsmax.com/Headline/mccain-graham-norquist-chambliss/2012/11/25/id/465282#ixzz2DLTNhN8O" target="_hplink">said</a>. "I want to buy down debt and cut rates to create jobs, but I will violate the pledge, long story short, for the good of the country, only if Democrats will do entitlement reform." <em>Correction: An earlier version of this story contained a misspelling of Graham's first name.</em>
Sen. Bob Corker (R-Tenn.)
Corker became the third GOP senator to <a href="http://www.huffingtonpost.com/2012/11/26/bob-corker-grover-norquist-pledge_n_2190985.html" target="_hplink">publicly disavow the pledge</a> promulgated by Norquist and Americans for Tax Reform in the last week. Speaking to CBS' Charlie Rose on Monday, the Tennessee Republican said that he was bound to serve his constituents first and foremost. "I’m not obligated on the pledge," he said. "I made Tennesseans aware, I was just elected, the only thing I’m honoring is the oath I take when I serve, when I’m sworn in this January."
Rep. Eric Cantor (R-Va.)
Although Cantor has not come out and explicitly stated that he would violate the pledge -- in the manner of Graham -- he has said that <a href="http://www.huffingtonpost.com/2012/11/26/eric-cantor-grover-norquist-pledge_n_2191375.html" target="_hplink">he is not concerned</a> with the pledge and wants to do what is best for his constituents. "When I go to the constituents that have reelected me, it is not about that pledge," Cantor said on MSNBC on Monday. "It really is about trying to solve problems." As a part of a supposed grand bargain, Cantor says that Republicans are willing to put some new revenues on the table, provided that they are raised from closing loopholes rather than from increasing the marginal rates. Under Norquist's pledge, neither option would be permissible.
Rep. Scott Rigell (R-Va.)
Rigell broke with Norquist and <a href="http://www.huffingtonpost.com/2012/07/16/grover-norquist-tom-coburn_n_1676841.html" target="_hplink">revoked his signing</a> of the pledge in May on the grounds that it restricts any meaningful attempt at tax reform. "Averting bankruptcy requires us to grasp the severity of our fiscal condition and summon the courage to speak boldly about the difficult steps needed to increase revenues and sharply decrease spending," he <a href="http://www.democraticwhip.gov/content/washington-post-gop-shifting-taxes-norquist-pledge-losing-support" target="_hplink">wrote</a> in a two-page letter explaining his reversal to his constituents. He wasn't advocating for tax hikes to further increase government spending, but any substantive overhaul of the tax code could only be undertaken if everything was on the table, he said. At the time, Norquist questioned the salience of Rigell's position, saying that the sort of tax increases he was looking for would be as unlikely as <a href="http://www.politico.com/news/stories/0512/76470_Page2.html#ixzz2DM2L4989" target="_hplink">catching a unicorn</a>. “[I've] been in touch with the Republican Party in [Rigell’s] district, and they aren’t excited about it. This is not going to be a continuing problem,” Norquist told Politico in May.
Sen. Tom Coburn (R-Okla.)
Coburn has <a href="http://www.huffingtonpost.com/2012/07/16/grover-norquist-tom-coburn_n_1676841.html" target="_hplink">publicly criticized</a> the idea of a no-new-taxes pledge before. In July, he authored <a href="http://www.nytimes.com/2012/07/16/opinion/a-greater-american-pledge.html?_r=2&ref=todayspaper" target="_hplink">an editorial</a> for The New York Times in which he decried the hard-line approach taken by Norquist as counterproductive to substantive deficit reduction. "In a debt crisis, higher interest rates and the debasement of our currency would be additional tax hikes," Coburn wrote. "In that sense, no one is doing more to violate the spirit of the pledge than Mr. Norquist himself, who is asking Republicans to reject the very type of agreement that could prevent future tax increases." Coburn previously disagreed with Norquist's characterization of his bill to eliminate the ethanol tax credit as a "<a href="http://www.politico.com/news/stories/0611/56990.html" target="_hplink">tax increase</a>."
Senator-Elect Jeff Flake (R-Ariz.)
When running for his Arizona seat, Flake claimed that he had not signed the pledge when <a href="http://www.huffingtonpost.com/2012/10/10/jeff-flake-promises-tax-pledge_n_1956509.html" target="_hplink">in fact he had</a>. But the Republican did publicly distance himself from Norquist, saying in October that "the only pledge I'd sign is a pledge to sign no more pledges." "I believe in limited government, economic freedom, individual responsibility," Flake said during a debate against his Democratic and Libertarian opponents. "I don't want higher taxes. But no more pledges."
Rep. Reid Ribble (R-Wis.)
Ribble, a freshman lawmaker from Wisconsin, decided that <a href="http://www.postcrescent.com/article/20111116/APC0602/111160402/Editorial-Read-Rep-Reid-Ribble-s-lips-No-new-pledges" target="_hplink">he wouldn't be signing any more pledges</a>, including a renewal of Norquist's anti-tax measure. In order to achieve deficit reduction, he wants to <a href="http://www.politico.com/news/stories/0512/76470.html" target="_hplink">close corporate loopholes</a> and explore other options around tax reform. "Tax rates don't correlate much to what actual revenue is, but if we would remove some of the subsidies and tax giveaways, we would have the money to reduce rates and spur economic growth which would increase revenue," he told CNN.
Rep. Robert Andrews (D-N.J.)
Andrews, one of two House Democrats to sign the anti-tax pledge, said that he thought the anti-tax promise only applied to the term in which he signed it rather than extending throughout his legislative career. "I honored that pledge -- <a href="http://thehill.com/homenews/house/192529-house-gop-lawmakers-want-out-of-tax-pledge" target="_hplink">I never renewed it</a>," Andrews told The Hill back in 2011. "I never considered it to be like my marriage vows...I'm married to Camille Andrews, not Grover Norquist. I promised her to be faithful until death do us part, and I mean it. I did not promise him to oppose tax increases until death do us part."
Rep. Lee Terry (R-Neb.)
Terry also believed that the anti-tax pledge only applied to the two-year term in which he signed it. He and Rep. Howard Coble (R-N.C.) both indicated to The Hill in 2011 that they had signed the pledge <a href="http://thehill.com/homenews/house/192529-house-gop-lawmakers-want-out-of-tax-pledge" target="_hplink">20 years ago</a> but had not agreed to uphold the pledge while serving in the present Congress.
Rep. Jeff Fortenberry (R-Neb.)
Fortenberry told his constituents in August that he found Norquist's anti-tax pledge to be "<a href="http://thehill.com/homenews/house/192529-house-gop-lawmakers-want-out-of-tax-pledge" target="_hplink">too constraining</a>" and did not want to be associated with it. He first broke ranks in 2011 and then <a href="http://www.washingtonpost.com/blogs/ezra-klein/post/jeff-fortenberry-one-house-republican-whos-dared-to-defy-grover-norquist/2012/05/17/gIQA5Q0wVU_blog.html" target="_hplink">renewed his position</a> again in May 2012 when speaking to The American Conservative. "Simply looking at the status quo and suggesting that the tax code is sacrosanct and can never change, and that decisions made in the ’80s and ’90s can never change, is absurd," he said. "The tax code is weighted toward the ultra-wealthy and ultra-wealthy corporations, and has created an offshore aristocracy of people who can afford to hire an army of accountants and lawyers." "We need a simpler, fairer tax code. Removing special-interest loopholes could potentially increase revenues and allow for lower rates," he added.
Rep. Steven LaTourette (R-Ohio)
LaTourette, who announced in July that he will retire at the end of the year, hasn't signed the pledge since 1994. He was under the impression, like several other GOP lawmakers, that the anti-tax promise had a limited applicability and had to be renewed. "My driver’s license expires," LaTourette <a href="http://thehill.com/homenews/house/192529-house-gop-lawmakers-want-out-of-tax-pledge" target="_hplink">told</a> The Hill. "The milk in my refrigerator expires. My gym membership expires, and I find the website to be a little deceptive." LaTourette and Sen. Jim Cooper (D-Tenn.) <a href="http://cooper.house.gov/index.php?option=com_content&view=article&id=586&Itemid=73" target="_hplink">introduced</a> a version of the Bowles-Simpson deficit-reduction plan in March. Although it engendered very little public support at the time -- and drew fire from Norquist -- LaTourette told HuffPost that many lawmakers <a href="http://www.huffingtonpost.com/2012/08/02/steve-latourette-grover-norquist_n_1733712.html" target="_hplink">privately pledged to get behind the measure</a> after the November elections.
Rep. Scott DesJarlais (R-Tenn.)
DesJarlais <a href="http://www.tennessean.com/article/20121127/NEWS02/311260055/Sen.-Corker-backs-off-no-tax-hike-pledge?nclick_check=1" target="_hplink">walked back his commitment</a> when The Tennessean asked about his signature on the anti-tax pledge Monday. "The only pledge that matters is the one I made to my constituents to always represent their interests in Congress," the Tennessee congressman said in a statement. "I will judge any legislation put forth to avoid the fiscal cliff based solely upon the wishes and needs of the people of Tennessee’s Fourth Congressional District." In the past, DesJarlais has also appeared to waffle on conservative positions he has taken on both preventing abortion and supporting family values. HuffPost's Michael McAuliff <a href="http://www.huffingtonpost.com/2012/10/10/scott-desjarlais-abortion-pro-life_n_1953136.html" target="_hplink">reported</a> in October that he had an affair with one of his patients and appeared to push her to get an abortion on a recorded phone call.
Sen. Lamar Alexander (R-Tenn.)
Alexander first broke with the pledge last year, but he <a href="http://www.tennessean.com/article/20121127/NEWS02/311260055/Sen.-Corker-backs-off-no-tax-hike-pledge?nclick_check=1" target="_hplink">reaffirmed his sentiments</a> to The Tennessean yesterday. When speaking to Roll Call magazine last July, the senior GOP senator said that he wanted to get rid of some <a href="http://www.rollcall.com/issues/56_139/grover-norquist-ethanol-tax-206489-1.html" target="_hplink">unwarranted tax breaks</a> -- something Norquist's pledge would not allow. “My only pledge is to the United States flag and to the United States Constitution, and I’ve forsworn all others,” Alexander <a href="http://www.tennessean.com/article/20121127/NEWS02/311260055/Sen.-Corker-backs-off-no-tax-hike-pledge?nclick_check=1" target="_hplink">told</a> Roll Call at the time.