“We can’t wait!” proclaimed President Biden about Democrats’ plan to rush a partisan, $2 trillion bill.
Democrats say they need $350 billion for state and local government funding (aside from several other liberal wish-list items).
But do states and local governments really need it?
Here’s the truth about state and local funding that Democrats don’t want you to know about:
State and local government tax receipts have never been higher. Ever.
St. Louis Fed data shows that Q3 of 2020 had the highest state and local government tax receipts in American history ($1.941 trillion).
When zooming in on the data, you can see that it only took two quarters in 2020 to rebound to a new high in state in local tax receipts.
Yes, the pandemic led to an economic decline and a reduction of state and local revenue. But after Congress passed several pieces of legislation, in an overwhelmingly bipartisan fashion and states began to re-open their economies, state and local tax receipts rebounded– and then some.
As far as state-by-state data goes, a new study by JP Morgan found that:
- “Calendar year 2020 state tax receipts for the 47 states who report the data, shows an avg decline of just 0.12% compared to 2019, with a weighted average decline of 0.06%, virtually flat to 2019. 21 of 47 states show positive YoY growth of tax receipts.”
- “Of the 40 states that report personal income taxes, CY2020 collections grew 1.3% vs 2019, with a weighted average growth of +2.0%. More than half (25) of states are reporting positive growth, especially among larger states (CA, IL, NC, GA)”
It’s clear that when President Biden says “we can’t wait!” for Democrats’ partisan legislation, he really means they need to pass it before anyone realizes what they’re actually spending money on.
Instead of focusing on blue-state slush funds that are not needed and would only subsidize economic shutdowns, Democrats should join Republicans in our goal to get people back to work, kids back in the classroom, and vaccines to those who want one.