State Tax Cutting Spree Continues Despite Murky Budget Forecasts

Over a dozen states enacted major tax cuts in 2021 including Ohio, Washington, Arizona, and Arkansas, which all passed their largest tax cuts in state histories.

The biggest tax cut spree since smoking was allowed on airplanes is poised to continue into next year as more lawmakers tap into state surpluses, an unexpected byproduct of the coronavirus pandemic.

But making large-scale policy changes through tax law changes based on “one-time growth” could impact budgets long term as the future remains uncertain, economists and researchers warn.

“Leaders often face pressure to increase spending or ...