Addressing the Harms Exacerbated by State-Level Tax Cuts

WHEREAS, in 2022 and 2023, the 50 states and the District of Columbia passed more than 500 separate tax and other revenue cuts with a value of more than $37 billion, equal to approximately 2.5 percent of state tax collections in 2022;[1] and

WHEREAS, the majority of these revenue reductions represent a significant step away from fiscal responsibility that will leave states ill-equipped to deal with future downturns in the economy; and

WHEREAS, in addition to the revenue cuts made in 2022 and 2023, 31 additional tax and revenue cuts were made that phase in, in 2025, totaling an additional $1.4 billion; and

WHEREAS, tax cuts have an initial value that is much smaller than their subsequent value in future years; and

WHEREAS, according to analysis done by the Albert Shanker Institute, 39 states devote a smaller share of their economic resources to public schools than they did before the Great Recession leaving about 60 percent of U.S. public school students in districts that are “chronically underfunded”;[2] and

WHEREAS, the government workforce at every level is underfunded further exacerbating the problem of filling vacancies to run our government systems. In 2008, there were 19.7 million people working in state and local government. If that workforce had grown at the same rate as the population, it would have totaled 21.6 million in 2022; instead employment fell to 19.3 million;[3] and

WHEREAS, states have not maintained the same level of investment in public higher education than they did prior to the Great Recession, fueling increases in tuition and an expansion of adjunct faculty; and

WHEREAS public hospitals that serve both teaching and safety net purposes face chronic funding issues:

RESOLVED, that the AFT will support affiliates as they educate and lobby state legislatures to stop the race to significantly reduce or eliminate state income taxes; and

RESOLVED, that the AFT will continue to support efforts such as combined reporting to prevent corporations from using subsidiaries in states with particular tax shelters to avoid paying taxes rightfully owed from operations in another state; and

RESOLVED, that the AFT will support affiliates as they educate and lobby state legislatures to adopt worldwide combined reporting for corporate income tax to prevent offshoring of tax revenue; and

RESOLVED, that the AFT and our affiliates will work to eliminate tax haven states and countries where corporations shelter income from taxation; and

RESOLVED, that the AFT will remain actively involved in Public Services International to advocate for a fair and equitable tax administration program around the world to fund quality public services.