The California state Legislature ended its session on August 31st. Constitutionally, they had to pass any bills that were outstanding by midnight this past Monday, or it would die and they would have to re-introduce them after the November elections.

Constitutionally, they were also supposed to pass a budget by June 30th [Calif. Const. Art. IV, Sec 12(c)(3)]. This is one provision that California legislators regularly ignore. Some 64 days after that deadline, this state limps along while the financial market starts thinking of how many more interest points it can charge due to fiscal volatility and the rest of the nation laughs for the clowns that the politicians are.

The following is an open letter to Governor Schwarzenegger, who can call a special session of the legislature, to do so and get the budget passed. Read more »

As a sign of the fiscal squeeze pressuring state budgets all over the country, Gov. Paterson has frozen tax refunds for New Yorkers to the tune of a half-billion dollars.

Several hundred thousand New York taxpayers will be affected with most getting an average refund of $1,000. People who filed in late February and early March might have to wait as long as six weeks till the checks are in the mail.

There seems to be a never-ending debate about the extent to which taxes affect our behavior. The US uses its tax code not only as a source of revenue but also as a way of encouraging or discouraging certain behaviors. Tax policy has consequences (both good and bad), and people do factor taxes into their decision process. The State of Maryland found this out the hard way. Read more »

On Wednesday, February 24, New Jersey Governor Chris Christie spoke to the New Jersey League of Municipalities. The purpose of his speech (video, 26 mins) was to announce that New Jersey's fiscal "Day of Reckoning" had arrived. Read more »

Today, House Majority Leader Steny Hoyer was invited to speak about Fiscal Responsibility at the Brookings Institute's Budgeting for National Priorities project (transcript, CSPAN video). There are parts of this speech that I wholeheartedly disagree with (mostly the partisan sales pitch), but he made a few excellent points that are worth sharing. Read more »