From: RGPPC

Re: Best Practices: Balancing State Budgets

Date: December 2013

Budgets, more than ever, are driving state and federal policy. Republican governors are setting priorities
and balancing budgets without raising taxes by reducing spending and finding efficiencies. To the
contrary, the Obama Administration continues to spend and spend, with little regard to the enormous
burden we are leaving to our children and grandchildren.

Featured states in this briefing include:
2013
o ARIZONA Governor Jan Brewer, Sales Tax Simplification
o INDIANA Governor Mike Pence, Jobs Budget, Largest Tax Cut in Indiana History,
Reserve Revenues
o IDAHO Governor Butch Otter, Tax Successes
o IOWA Governor Terry Branstad, Largest Tax Cut in Iowa History
o KANSAS Governor Sam Brownback, Significant Tax Reform
o MAINE Governor Paul LePage, Hospital Plan and Spirits Contract, Welfare Debt
Paid
o MISSISSIPPI Governor Phil Bryant, Sales Tax Reductions for Broadband
o NEBRASKA Governor Dave Heineman, Tax Relief for Nebraskans
o NORTH CAROLINA Governor Pat McCrory, Tax Reform, Partnership for
Prosperity
o NORTH DAKOTA Governor Jack Dalrymple, Income Tax Relief
o OHIO Governor John Kasich, Bold State Budget to Further Ohios Comeback
o OKLAHOMA Governor Mary Fallin, State Income Tax Reduction
o PENNSYLVANIA Governor Tom Corbett, Tax Reform
o TENNESSEE Governor Bill Haslam, Sales Tax Reduction, Income Tax Reduction,
State Rainy Day Fund
2012
o GEORGIA Governor Nathan Deal, Georgia Jobs and Family Tax Reform Plan
o IDAHO Governor Butch Otter, 2012 Legislative Session Fiscal Accomplishments
o INDIANA Governor Mitch Daniels, Surplus Split Among Pension Funds, State Debt
Reduction
o KANSAS Governor Sam Brownback, Pro-Growth Tax Reform
o MICHIGAN Governor Rick Snyder, Fiscal Year 2013 Budget
o NEBRASKA Governor Dave Heineman, Middle Class Tax Relief, Opposition to
Sales Tax Increase
o NEW MEXICO Governor Susana Martinez, Curbing Tax Pyramiding
o NORTH DAKOTA Governor Jack Dalrymple, State Budget Surplus
o OHIO Governor John Kasich, The Management Efficiency Plan
o PENNSYLVANIA Governor Tom Corbett, Elimination of Inheritance Tax
o SOUTH CAROLINA Governor Nikki Haley, Small Business Tax Relief
o TENNESSEE Governor Bill Haslam, Food Tax Reduction, Phasing Out of the
Inheritance Tax, Repeal of Gift Tax
o TEXAS Governor Rick Perry, Texas Budget Compact
o VIRGINIA, Governor Bob McDonnell, Budget Surplus
o WISONSIN, Governor Scott Walker, Budget Repair Bill, Structural Reforms
2011
o IOWA Governor Terry Branstad, Resolution of Budget Crisis
o INDIANA Governor Mitch Daniels, Automatic Taxpayer Refund
o LOUISIANA Governor Bobby Jindal, Budget Reduction
o MAINE Governor Paul LePage, Largest Tax Cut in Maine History, Capital
Investment Credit
o NEBRASKA Governor Dave Heineman, Balanced Budget
o NEVADA Governor Brian Sandoval, Historic Budget Reforms
o NEW JERSEY Governor Chris Christie, Property Tax Cap and Reform Legislation
o NEW MEXICO Governor Susana Martinez, Balanced Budget
o OHIO Governor John Kasich, Elimination of Budget Shortfall
o PENNSYLVANIA Governor Tom Corbett, Cutting Spending Without Tax Increases
o TENNESSEE Governor Bill Haslam, Balanced Budget
o VIRGINIA Governor Bob McDonnell, Elimination of Budget Gaps

2013
Arizona, Governor Jan Brewer
Press Release: Business Owners join Governor Brewer to Support Sales Tax Simplification (02/11/2013)
Governor Brewer signed HB 2111, capping a year-long effort to reform Arizonas TPT (sales tax) system
that began with the work of Governor Brewers TPT Simplification Task Force. That Task Force worked
through the summer and fall of 2012 to develop recommendations that were adopted in December 2012.
The bill establishes a single point of administration, a single and uniform audit structure, and relieves
service and trade contractors from an overly burdensome tax regime in favor of a simple tax on materials
at the point of sale.

Indiana, Governor Mike Pence
Press Release: Gov. Pence Signs Jobs Budget, Largest State Tax Cut in Indiana History (05/08/13)
Governor Pence signed HEA 1001, providing Indiana taxpayer $600 million a year in tax relief. Indiana
lawmakers axed the death tax completely and cut the income tax by 5 percent, reducing the rate to 3.3
percent in 2015, then to 3.23 percent in 2017. The bill also includes business tax reductions. In addition
to cutting taxes, the budget invests $190 million in new money for K-12 education and funds initiatives to
increase career and technical education opportunities in high schools. The budget includes more than
$600 million for roads and infrastructure, along with $25 million in seed money for a life sciences
research institute.
Press: Governor Pences Indiana Tax Win (National Review)

Press Release: Fiscal Year Closeout Shows Indianas Revenues, Reserves Higher than Projected
(07/11/13)
Indiana ended FY 2013 with a structural surplus of $483 million, and reserves at $1.94 billion. The states
balanced budget held the line on spending and maintained the reserves, while investing in education and
infrastructure. The state has also reduced state tax-funded debt by 52 percent since the start of FY 2013.

Idaho, Governor Butch Otter
Press Release: Governor Cites Tax Successes from 2013 Legislative Session (04/04/13)
During the 2013 Legislative Session, Governor Otter signed HB 315, eliminating the burden of the
personal property tax for the majority of Idaho businesses while ensuring local units of government have
the means to meet their responsibilities.

Iowa, Governor Terry Branstad
Press Release: Gov. Branstad signs largest tax cut in Iowa history (6/12/2013)
Governor Branstad signed Senate File 295, the largest tax cut in Iowa history, making it easier for Iowa
businesses to invest and grow in Iowa. Over ten years, this bill will provide an estimated 4.4 billion
dollars in property tax relief for Iowas hardworking taxpayers. Every class of property will see
permanent property tax relief, with agricultural and residential property tax payers saving an estimated
$500 million annually by year ten. On top of all the property tax relief, the bill includes nearly 90 million
dollars in annual income tax relief. The bill increases the amount of the state earned income tax credit,
which was previously equal to 7 percent of the amount of the taxpayers federal earned income tax credit.
Division VII increases the amount of the credit to 14 percent of the federal credit for tax year 2013, and to
15 percent of the federal credit for each tax year thereafter. The legislation also provides an estimated
$120 tax credit to Iowa taxpayers when the Taxpayers Trust Fund exceeds $30 million.
Press: Iowa Senate passes historic property tax cut (The Gazette)

Kansas, Governor Sam Brownback
Tax Foundation: Kansas 2013 Tax Reform Improves on Last Years Efforts (06/18/13)
Governor Brownback signed HB 2059 which sets the Kansas state sales tax at 6.15 percent. The bill also
cuts the rate for the top income tax bracket to 3.9 percent by 2018, a drop from the current rate of 4.9
percent.

Maine, Governor Paul LePage
Press Release: Governor Signs Hospital Bill, Makes Good on Promise to Maine People (06/14/13)
Governor Paul LePage signed LD 1555, An Act To Strengthen Maines Hospitals and To Provide for a
New Spirits Contract. This legislation made good on Governor LePages promise to pay Maines $484
million in hospital debt. Additionally, the Governor's plan restructured liquor operations and sales to
provide a better return on investment and releases voter-authorized bonds. The comprehensive plan puts
nearly $700 million into Maine's economy creating health care and construction jobs, and invests millions
to pay for clean water and transportation projects, and starts setting aside money for the state's depleted
rainy day fund.

Press Release: Welfare Debt Paid, Maine is Now in Better Financial Standing (09/18/13)
Delivering on a promise to the people of Maine, Governor Paul R. LePage announced that a half-billion
dollars of welfare debt has been paid to Maines hospitals. Thirty-nine hospitals from Aroostook County
to York received a total of $490,200,000 for MaineCare services dating back to 2009. MaineCare is the
states name for its Medicaid program. The massive, overdue welfare debt has now been repaid, placing
Maine in improved fiscal condition.

Mississippi, Governor Phil Bryant
SB 2829: Sales and Ad Valorem Tax Exemptions for Broadband
Governor Bryant signed SB 2829, which extended the repealer from 2013 to 2020 for important
broadband tax incentives. These tax incentives encourage the continued expansion of high-speed internet
access to the citizens of Mississippi.

Nebraska, Governor Dave Heineman
Press Release: Gov. Heineman Promotes Tax Relief for Nebraskans (06/03/13)
LB 308: (Signed 06/03/13) changes income taxes by eliminating the federal alternative minimum tax
calculation for individual state income tax purposes for taxable years beginning Jan. 1, 2014. The federal
credit for prior alternative minimum tax year would also be eliminated for taxable years 2014 and beyond.
LB 308 (06/03/13): delivers tax relief to hard-working middle class families. This law changes
income taxes by eliminating the federal alternative minimum tax calculation for individual state
income tax purposes for taxable years beginning Jan. 1, 2014. The federal credit for prior
alternative minimum tax year would also be eliminated for taxable years 2014 and beyond.
LB 296 (06/03/13): provides tax relief for Nebraska families saving for college. This law allows
higher tax deductions for Nebraskans making contributions to a Nebraska College Savings
Program account. Currently, contributions to a Nebraska College Savings Program account are
exempt from state income tax up to $2,500 for a married person filing separately and $5,000 for a
married couple filing jointly. This bill would allow an increase in exempt contribution to $5,000
for a married person filing separately and $10,000 for a married couple filing jointly.
LB 573 (06/03/13): brings tax relief for business employees. This law designates an employee
stock ownership plans as a qualified corporation, allowing its individual shareholders to exclude
dividends and capital gains from their taxable incomes. This will especially help employee-
owned businesses.

North Carolina, Governor Pat McCrory
Press Release: Governor McCrory Signs Tax Reform into Law (07/23/13)
Governor Pat McCrory signed significant tax reform legislation, HB 998, into law, providing tax relief to
all North Carolina taxpayers. This bill simplifies the tax code, removing all loopholes for special interest
groups and lowering all rates. The plan also cuts the personal income tax to 5.75% from 7.75%; cuts the
corporate tax to 5% from 6.9%; and eliminates the state death tax.
Press: Three New Tax Reasons to Retire to North Carolina (Forbes)

Press Release: Governor McCrory Launches Partnership for Prosperity: A New Economic
Development Approach (04/08/13)
Governor McCrory is implementing a public-private partnership that will realign North Carolinas
economic development resources to maximize opportunities for all North Carolinians. The partnership
will help North Carolina recruit and expand business at the speed of business and adapt to a changing
economy. It will bring more good-paying jobs to communities across the state.

North Dakota, Governor Jack Dalrymple
Press Release: Dalrymple Signs $250 Million In Income Tax Relief (5/07/2013)
Governor Jack Dalrymple supported and signed SB2156 (HB1250) on May 7, 2013. The bill provides
$250 million in income tax relief for North Dakota taxpayers including $200 million in personal income
tax relief and $50 million in corporate tax relief. The cuts represent a 20 percent and 12 percent tax cut,
respectively. In addition to the income tax relief, Dalrymple has also lowered the entirety of North
Dakotas tax burden by $1.1 billion during the 2013-2015 biennium. This includes more than $850
million in property tax relief as well as a larger role in the state funding of education. This reform also
helped senior citizens and veterans through wide-spread targeted relief programs.

Ohio, Governor John Kasich
Press Release: Kasich Signs Bold State Budget to Further Ohio's Comeback (06/30/13)
Ohios budget for the FY2014-2015 cut $2.7 billion over three years, improving Ohios competitiveness
with neighboring states. This tax cut includes a 10% personal income tax cut for all taxpayers. The tax
package also included a 50 percent income tax cut on the first $250,000 earned by small business owners.
When Governor Kasich took office there was an $8 billion short-fall, but now they have the fiscal
solvency to cut $2.7 billion, even while injecting $3 billion in federal, state and local funds into
infrastructure and $1.5 billion into the education system. Kasich worked with his bipartisan legislature to
get this budget passed.

Oklahoma, Governor Mary Fallin
Legislation: Governor Fallin Signs State Income Tax Reduction (3/14/13)
In March 2013, Governor Fallin signed HB2032, legislation that reduces the states top personal income
tax rate by 0.25 percent, to 5 percent, starting in 2015, and lowers that rate even further to 4.85 percent for
tax year 2016, if growth in the General Revenue Fund is estimated to cover the cost of the final 0.15
percent reduction. In its first fully implemented tax year, this tax cut will pump more than $235 million
back into the private sector. HB 2032 is a responsible, meaningful tax cut that will let Oklahoma families
keep more of their hard-earned money while spurring job growth and business expansion in Oklahoma.

Pennsylvania, Governor Tom Corbett
Press Release: Governor Corbett Signs House and Senate Bills into Law (07/09/13)
Governor Corbett signed HB 465 into law, reforming the taxation of corporations, partnerships, and
individuals, and extending the phase-out of capital stock tax. This bills aims to close the Delaware
loophole keeping businesss assets in Pennsylvania. The amount of revenue that this bill is expected to
generate ranges from $35 to $50 million.
Press: Delaware loophole targeted by bill (Pittsburg Post-Gazette)

Tennessee, Governor Bill Haslam
Press Release: Sales Tax Rate on Food to Decrease (6/11/2013)
This bill completed the governors two-year plan to cut the states portion of the sales tax on food and
groceries from 5.5 percent to 5 percent, a reduction that affects every Tennessean.

Press Release: Haslam Signs Hall Income Tax Reduction (6/28/2013)
Haslam reduced the Hall Income Tax burden on seniors for the second time since 2011 by exempting
single filers with a total annual income of $33,000 or less and joint filers with either a spouse 65 years or
older and having total annual income of $59,000 or less.

Press Release: Governor McDonnell Announces State Rainy Day Fund to Exceed $1 Billion (9/16/13)
In September 2013, Governor Bob McDonnell announced that Virginia's Rainy Day Fund is on pace to
exceed $1 billion by the close of Fiscal Year (FY) 2016. The projection represents a dramatic upswing in
the balance sheet of the Commonwealth's emergency cash reserve, which stood at only $295.2 million at
the conclusion of FY 2010, midway through the governor's first year in office.

Based on the size of the overall budget surplus, the McDonnell Administration's fourth in as many years,
the Constitution prescribes an additional $313.9 million will be deposited to the Rainy Day Fund in FY's
2015 and 2016. The governor will include that amount in the new budget he will propose this December.
The amount is based on actual collections of general fund revenues in fiscal year 2013 and the official
budget estimate for general fund revenues in FY 2014. The governor has previously announced that the
Commonwealth concluded FY 2013 with a revenue surplus of over $261 million. This is the first time a
single gubernatorial administration has posted four consecutive revenue surpluses since the Allen
Administration in the mid-1990's.


2012

Georgia, Governor Nathan Deal
Press Release: Governor Deal Signs New Tax Reform Bill (04/20/12)
On April 19, 2012 Gov. Nathan Deal signed into law House Bill 386, the Georgia Jobs and Family Tax
Reform Plan, which cuts taxes for all Georgians and covers multiple types of tax eliminations.

Key reforms of HB 386 include:
Eliminates the state sales tax on energy used in manufacturing.
Reduces the marriage penalty in the income tax code by cutting income taxes for married couples.
Eliminates the birthday tax on motor vehicles.
Reinstates sales tax holidays for back-to-school and green energy purchases.
Revises sales tax exemptions on agriculture to ensure fairness and consistency.
Curtails abuse in the conservation easement income tax credit program for donation of
conservation easements while maintaining this credit program.
Caps retirement income exclusion for seniors at current level of $65,000 ($130,000 per couple).
Eliminates sales tax exemption for film productions.
Creates a 1 percent sales tax exemption on commercial aviation fuel to make Georgia fuel rates
more competitive with other major airports.

Idaho, Governor Butch Otter
Press Release: Governor Applauds Fiscal Accomplishments of 2012 Legislative Session
(03/30/12)
Governor C.L. Butch Otter praised legislators for starting to refill reserve accounts, helping him
promote economic development and providing tax relief. Key fiscal successes of the 2012 legislative
session include reducing both the marginal state income tax rate for individuals including many small
businesses and the marginal corporate income tax rate to a more competitive 7.4 percent . In addition,
the state began to refill reserve or rainy day funds that were essentially emptied during the Great
Recession. More than $21.4 million will be deposited in the Public Education Stabilization Fund, and
$10.9 million will be put in the Budget Stabilization Fund.
View more legislative successes here.

Indiana, Governor Mitch Daniels
Press Release: Five pension funds split $360 million from surplus state reserves (10/04/12)
On October 4, 2012, Governor Mitch Daniels announced how $360 million will be split among five
employee pension funds, their share of the proceeds from the first automatic taxpayer refund, the
governors plan to return taxpayer dollars to Hoosiers when the states reserves exceed a certain
threshold.

The $360 million the pension funds will share is half of the budget surplus. The other $360 million will
be returned to taxpayers when they file tax returns in 2013. The refund will be in excess of $100 for a
single filer or $200 for a joint return. The exact amount will be determined later this month.

The five pensions and contribution amounts are:
Judges Pension Fund, $90,187,160
Conservation, Gaming, and Excise Officers Pension Fund, $14,619,112
Prosecutors Pension Fund, $17,363,392
State Police Pension Fund, $31,674,103
Pre-1996 Teachers Retirement Fund, $206,796,233

Press Release: State reduces debt by more than half in 8 years (10/17/12)
Since January 2005, the state has reduced its outstanding debt from $3.6 billion to $1.7 billion, a decrease
of more than 50 percent. Major contributors to the states debt reduction include $244 million in revenue
collections from the tax amnesty program of 2005-06, immediately paying off $198 million in Indiana
Toll Road bonds with proceeds from the lease of the Indiana Toll Road, $266 million in savings from
outsourcing functions such as food services in correctional facilities and printing and mail services for
state government employees. Governor Daniels actions eliminated about $68 million that otherwise
would have needed to be spent in the 2014-15 budget, in addition to nearly $125 million that would have
needed to be spent between 2016 and 2033.

Kansas, Governor Sam Brownback
Press Release: Governor Brownback signs pro-growth tax legislation (05/12)
In May 2012, Governor Sam Brownback signed one of the largest tax relief measures in Kansas history
into law. The new law cuts state income tax rates for all hard-working Kansans by 14 to 24 percent and
eliminates state income taxes on more than 191,000 small business owners. House Bill 2117 collapses the
current three-bracket structure for individual state income taxes (3.5, 6.25 and 6.45 percent respectively)
into a two-bracket system using rates of 3.0 and 4.9 percent. The business income exemption eliminates
certain non-wage business income for small business owners (income reported by LLCs, Subchapter-S
Corporations, and sole proprietorships on lines 12, 17, and 18 of federal form 1040).

The law also flattens the tax structure and increases the standard deduction amount for single head-of-
household filers from $4,500 to $9,000; and for married taxpayers filing jointly from $6,000 to $9,000.
Dynamic projections show the new law will result in 22,900 new jobs, give $2 billion more in disposable
income to Kansans and increase population by 35,740, all in addition to the normal growth rate of the
state.

Michigan, Governor Rick Snyder
Press Release: Snyder signs FY 13 budget bills (06/26/12)
On June 26, 2012, Gov. Rick Snyder signed legislation enacting Michigan's fiscal year 2013 budget,
which invests in key priorities and helps to ensure the state's long-term stability. This is the second year in
a row that the governor and his legislative partners have delivered a structurally balanced budget well in
advance of the fall deadline.

Specific highlights of the 2013 budget include:
A deposit of $140 million to the Budget Stabilization Fund (rainy day fund) that brings the fund
balance to $504.9 million, the largest fund balance in more than 10 years. The balance was just
$2.2 million in 2010.
$2,200 per person saved thanks to reducing the states post-retirement liabilities by $21.3 billion
since Governor Snyder took office
Personal income tax relief that reduces the income tax rate from 4.35 percent to 4.25 percent
effective Oct. 1, ahead of the originally scheduled date of Jan. 1, 2013. The personal exemption
will increase from $3,700 per person to $3,950 per person on Oct.1.
A total budget of $49 billion in state and federal revenue sources, with more than 75 percent
devoted to education and health and human services. A deposit of $140 million to the Budget
Stabilization Fund (rainy day fund) that brings the fund balance to $504.9 million, the largest
fund balance in more than 10 years. The balance was just $2.2 million in 2010.
Personal income tax relief that reduces the income tax rate from 4.35 percent to 4.25 percent
effective Oct. 1, ahead of the originally scheduled date of Jan. 1, 2013. The personal exemption
will increase from $3,700 per person to $3,950 per person on Oct.1.
A 3 percent increase in funding for community colleges and universities with performance
metrics that keep college tuition down. An overall increase of $200.5 million in K-12 education
funding when compared to current spending, with performance funding and best practices
included. Equity payments totaling $80 million for school districts with the lowest foundation
allowances, raising the foundation floor from $6,846 per pupil to $6,966 per pupil and further
closing the gap between the lowest and highest foundation allowance districts.

Nebraska, Governor Dave Heineman
Press Release: Gov. Heineman Signs Middle Class Tax Relief for Hard-Working Nebraskans (04/10/12)
In April 2012, Gov. Dave Heineman signed LB 970 into law, which provides tax relief for hard-working,
middle class Nebraskans. The Governors plan provides $97 million in tax relief over three years. LB 970
provides individual income tax relief by lowering the rate of the lowest three income tax brackets in 2013.
In 2014, tax brackets will be expanded in a way that will include greater amounts of income being taxed
at the lower rate. Additionally, Gov. Heineman signed three economic development bills into law, aimed
at continuing to improve Nebraskas competitive edge for job creation:
LB 830 provides a sales and use tax exemption for biochips, used for the purposes of conducting
genotyping or the analysis of gene expression, protein expression, genomic sequencing, or protein
profiling of plants, animals, or nonhuman laboratory research model organisms.
LB 872 reduces the income tax burden of Nebraska-based business that provides services to
customers in other states. Additionally, the bill changes the method for corporate income tax for
the sales of services or intangible property, except for sales of a communications company.
LB 1080 amends the revenue code to provide a personal property tax exemption and a sales and
use tax exemption for tangible personal property that is assembled, engineered, processed,
fabricated, manufactured into, attached to, or incorporated into other tangible property, both in
component form or that of an assembled product, for the subsequent use at a physical location
outside this state. These exemptions are only available to a person operating a data center, for
which a definition is provided in the bill.

Press Release: Gov. Heineman Opposes Increase in Sales Tax (04/10/12)
Gov. Dave Heineman was a strong opponent to LB 357, a bill which sought to increase sales taxes by 33
percent. This bill would increase the sales tax by one-half-of-a-cent on working men and women in the
City of Omaha and potentially other Nebraska cities. Additionally, this tax increase will make the State of
Nebraska less competitive for jobs and potentially hurt Nebraskas Tax Foundation ranking because state
and local sales taxes are part of that calculation. The bill was defeated.

New Mexico, Governor Susana Martinez
Legislation: HB184, Tax Pyramiding
HB 184 curbs the practice of pyramiding in the states construction and manufacturing industry.
Pyramiding is the term used when a tax is levied on goods and services that are part of a final product,
resulting in double and triple taxation of finished products in the construction and manufacturing sector.
Under this legislation, products that are consumed in the manufacture or construction of a final product
are deductible for businesses, resulting in significant savings for construction and manufacturing
businesses.

North Dakota, Governor Jack Dalrymple
Office of Management and Budget: Status of the General Fund (06/19/12)
On June 19, 2012, the North Dakota Office of Management and Budget announced that the states budget
forecast is projected to surpass $2 Billion in June 2013. The total surplus calculation is derived from five
separate funds: General fund ($848,879,945), Budget stabilization fund ($386,351,110), Legacy fund
($351,974,105), Foundation aid stabilization fund ($204,034,265), and Property tax relief sustainability
fund ($261,828,006). Governor Dalrymple credits the surplus and solid financial situation to, following a
strategic plan for economic development; building the strongest business climate possible; and
establishing effective tools like the Department of Commerce and the North Dakota Trade Office,
combined with good fiscal discipline and a solid partnership with the private sector.
Press: North Dakota Surplus to Hit $2 Billion Within a Year

Ohio, Governor John Kasich
Office of the Governor: The Management Efficiency Plan
Governor Kasichs Administration conducted a top-to bottom review of state government operations
referred to as the Mid-Biennium Review (MBR). As a result, agencies identified significant General
Revenue Fund (GRF) and non-GRF savings, and the Management Efficiency Plan, through HB 487,
produces an overall reduction in spending for FY2013. The majority of the Management Efficiency
Plan (MEP) was included in House Bill 487, and contains a number of appropriation changes related to
proposed program reforms. While increases in a few agency programs were also identified to meet
unanticipated needs, the result has been a net reduction in agency appropriations in FY2013.
Program Rationalization and Reform
Items in the MEP will improve state programs and regulations, consolidate duplicative efforts and
remove unnecessary bureaucracy in ways that save taxpayers money and make government more
efficient.
Better Services, Better Operations, Better Value
The MEP implements a large number of program improvements and updates to help state
agencies provide better services to Ohioans who need them and better value to taxpayers.
Better Health System Performance
Targeted improvements in Ohios health and human services programs build on the major
reforms of the Jobs Budget to enhance program performance, create better health outcomes for
individuals and provide employers with a healthier workforce.

Pennsylvania Governor Tom Corbett
PR Newswire: Elimination of Inheritance Tax on Small Business & Family Farms (07/01/12)
Governor Corbett signed landmark legislation, HB 761, making it easier for Pennsylvania farms to
transition between generations. Pennsylvania farmers can now pass their farms on to their heirs without
worrying they will have to pay steep death taxes to keep them in the family. Previously when a
landowner died, heirs to their farm property had to pay an inheritance tax of 4.5 percent if they were adult
children and 12 percent if they were siblings of the deceased. The inheritance tax has been a burden on
farm families for decades and the new law is a victory for Pennsylvania farm families.
South Carolina, Governor Nikki Haley
Press Release: Gov. Nikki Haley signs small business tax relief into law (6/29/13)
In June 2012, Governor Haley signed H. 5418, a business tax cut that affects most small businesses in
South Carolina. This Act cut the tax rate from 3% to 5% over three years - representing $63 million in
cumulative tax relief.

Tennessee, Governor Bill Haslam
Press Release: Haslam Signs Food Tax Reduction Bill at Marion County Grocery (06/04/12)
Tennessee Gov. Bill Haslam signed legislation to reduce the state portion of the sales tax on groceries
from 5.5 percent to 5.25 percent. His plan is to reduce it next year to 5.0 percent. The bill, SB 3763/HB
3761, was introduced by the governor and was one of three tax cuts passed by the legislature and signed
by Haslam this year as the state continues its work toward providing the best customer service at the
lowest possible cost to taxpayers. Haslam included $21.3 million in the FY 2012-2013 state budget to
fund the legislation.

Press Release: Haslam Signs Legislation Phasing Out Inheritance Tax (06/06/12)
On June 6, 2012, Gov. Bill Haslam highlighted the second of three tax cuts passed during this years
legislative session and signed by the governor. Haslam held a ceremonial bill signing of HB 3760/SB
3762, which phases out the state inheritance tax during the next three years before it is completely
eliminated starting January 1, 2016. The exemption level will be lifted to $1.25 million in 2013; $2
million in 2014; and $5 million in 2015. Haslam included $14.2 million in the FY 2012-2013 state budget
to fund the legislation.

Tennessee Department of Revenue: Gift Tax
In May 2012, Governor Haslam signed SB 2777/HB 2840, which repeals Tennessee's tax on gifts
effective January 1, 2012. This means taxpayers giving gifts currently taxed in accordance with Tenn.
Code Annotated Section 67-8-101 will not be subject to gift tax.

Texas, Governor Rick Perry
Initiative: Texas Budget Compact
In preparation for the 2013 Legislative Session, Governor Perry proposed "The Texas Budget Compact,"
composed of five effective principles that will lead to a stronger Texas.
The Compact asks members of the Legislature to: practice truth-in-budgeting; support a stricter
constitutional limit on spending; oppose any and all new taxes or tax increases; preserve the Rainy Day
Fund; and cut wasteful and redundant government programs and agencies.

Virginia, Governor Bob McDonnell
Press Release: Governor McDonnell Announces $448.5 Million Budget Surplus for Fiscal Year 2012
(08/15/12)
Virginia posted a total revenue and savings surplus of $448.5 million dollars for FY 2012. The surplus
follows the Commonwealth's $544.8 million surplus in FY 2011 and $403.3 million surplus for FY 2010.
The total FY 2012 surplus consists of the previously announced revenue surplus of $129.2 million along
with $187.0 million in state agency savings and agency balances, and $132.3 million in higher education
and other unexpended non-general funds.

Wisconsin, Governor Scott Walker
Legislation: Budget Repair Bill (03/11/11)
In January 2011, the State of Wisconsin faced a state budget deficit of $3.6 billion. Instead of increasing
taxes or sharply reducing government services, Governor Walker proposed structural reforms that would
help maintain services, respect the taxpayers, and end wasteful spending. The Governors reforms
allowed state and local government to save millions of dollars by utilizing the cost-savings of the free-
market system and competitively bidding on their health insurance programs, curbing over-time abuses,
aligning staff with service needs, and asking employees to contribute a portion toward their pension and
health insurance. The reforms also allowed government to reward employees and make staffing decisions
based on merit, not union contracts.

To deal with the fiscal crisis Wisconsin faced, Governor Walker chose to do something truly innovative:
reduce government spending, while giving government increased flexibility to provide services.
The Governors reforms allowed state and local government to save millions of dollars by utilizing the
cost-savings of the free-market system and competitively bidding on their health insurance programs,
curbing over-time abuses, aligning staff with service needs, and asking employees to contribute a portion
toward their pension and health insurance. Reforms include controlling property taxes, and ending
wasteful spending. Collective bargaining abuses such as stacking overtime hours to inflate salaries at the
state correctional institutions are now gone, which is estimated to save taxpayers $5 million annually. For
decades, these had been protected by union contracts. Wisconsin can now pay for performance and
eliminate seniority in overtime which will save millions more. The new reforms were put in place
January 2012 and have already reduced overtime at the Department of Corrections by $2,108,556 in just
three months compared to the previous year.

Documented savings show statewide Governor Walkers reforms are saving taxpayers over $1 billion
dollars annually and other estimates place that total much higher. Legislative Fiscal Bureau has estimated
pension savings alone over the biennium saving school districts nearly $600 million without including
savings on health insurance. School districts that reported competitively bidding out their health insurance
plan with modest design changes saved $220 saved per pupil per year on average.

These savings do not include uncollected data from health insurance savings at CESAs, special districts,
68 percent of school districts, and many local governments in Wisconsin.
Press: Summary of Gov. Scott Walkers Budget Repair Bill


2011


Iowa, Governor Terry Branstad
Press Release: Gov. Branstad issues statement on close of 2011 session (06/30/11)
At the beginning of the 2011 Session the state of Iowa faced a critical budget crisis resulting from years
of bad budgeting practices. Governor Branstads administration identified nearly $900 million of state
spending on 89 different programs that were funded with unpredictable sources of money which left Iowa
facing a huge budget gap and nothing but difficult choices ahead. Budget highlights include:
The FY 12 budget spent less than it took in and state spending was held to about 96% of available
revenuea significant accomplishment after years of spending every penny the state received
and then some.
For the first time since the early 1980s the state has a biennial budget with 85% of funding for
FY13 already set and key areas such as school aid and entitlement programs fully funded in the
second year; No entitlements were purposely underfunded in FY 12.
This budget balanced for FY 12, FY 13, and is projected to balance over the entire five years of
Governor Branstads long range plan.

Indiana, Governor Mitch Daniels
After nearly a decade of unbalanced budgets, Governor Daniels restored Indianas budget to structural
balance in his first budget. The state went from a $700 million structural deficit in 2005 to $1.3 billion in
reserves in 2009. Indianas FY 2012-2013 budget is structurally balanced, and reserves are expected to
grow in the current biennium. An Automatic Taxpayer Refund was signed by Governor Daniels in 2011
whereby reserves in excess of a prudent level are refunded to Indiana taxpayers. Since 2005, more than
$760 million was paid back to all K-12 schools, universities and local government units that were owed to
them from previous deficit spending. In total, state debt has been reduced by more than 42% under
Governor Daniels. Over $250 million in unnecessary spending was trimmed from state government and
$190 million was saved by renegotiating 30 state contracts. Indiana now has fewer state employees than it
did in 1976, and the fewest state employees per capita of any state.
Press: Editorial: Budget surplus is reminiscent of Daniels first year

Louisiana, Governor Bobby Jindal
Press Release: Governor Jindals FY 13 Budget (02/09/12)
During the Governor Jindals first term in office, he reduced the state budget by a stunning total of $9
billion, or 26 percent. Governor Jindals budget reductions included the elimination of 9,900 full-time
government positions, bringing state government to its lowest level of fulltime government positions in
almost 20 years. Many of these positions were streamlined by implementing efficiencies that use
technology and share resources between agencies. Governor Jindal also eliminated more than 100 state
boards and commissions and reduced government cars by 1,300 vehicles, bringing the size of the fleet to
its lowest level since 2004. Since Governor Jindal took office in 2008, three state departments
Transportation and Development, Revenue, and Wildlife and Fisheries have eliminated general fund
spending in their budgets entirely, though cost-saving measures and maximizing the use of existing funds
from other sources, including those that are self-generated.
Press: Jindal cuts La. budget 25% and sky doesn't fall

Maine, Governor Paul LePage
Press Release: Governor LePage Signs Budget (06/20/11)
Governor LePage signed the FY 12-13 budget, providing $150 million in tax relief to Mainers. The
budget reduced the top income tax rate from 8.5 percent to 7.95 percent, eliminating tax payments for
70,000 low income Mainers. This represents the largest tax cut in Maine history. The budget also enacted
welfare and pension reform, eliminating $1.7 billion (41%) of the shortfall in Maines pension system.
Press: Gov. LePage signs budget with largest tax cut in Maine history

Legislation: 5219-GG. Maine capital investment credit
In 2011, the Maine Legislature passed the Maine Capital Investment Credit. This tax credit was created to
provide $31 million in tax relief for job creating investments made by businesses in the state that expand.

Nebraska, Governor Dave Heineman
Press Release: Gov. Heineman Signs Budget for Next Biennium (05/17/11)
The Governor proposed and signed into law a balanced two-year budget that closed a projected budget
shortfall of nearly $1 billion without raising taxes. Funding for education is prioritized in the budget with
state funding for K-12 education increasing to $822 million in FY12 and $880 million in FY13. Funding
for the University of Nebraska, state colleges and Nebraskas community colleges is held steady in the
coming biennium. Additionally, the Governor proposed and lawmakers supported providing a $25 million
infusion of state funds for the initial development of the University of Nebraska Innovation Campus in
Lincoln.

Nevada, Governor Brian Sandoval
Press Release: Sandoval Reaches Budget Agreement with Legislative Leaders Represents Historic
Reforms (06/01/11)
Governor Sandovals budget for FY 12 eliminated the modified business tax on 70 percent of Nevada
businesses. In addition, the state budget was trimmed over $500 million. Approximately 600 positions
were eliminated, along with around a dozen agencies that were merged or eliminated. Significant
education reform was also achieved.

New Jersey, Governor Chris Christie
Press Release: Governor Chris Christie Reaches Bipartisan Agreement on Critical Tool Kit Measures,
Long-Overdue Arbitration Reform Transforms System (12/09/10)
Governor Christie signed into law a 2% hard cap on property taxes, marking the first significant step
toward bringing lasting property tax reform to New Jersey. By the time Governor Christie took office,
New Jerseys highest in the nation property taxes had increased more than 70 percent since 1999. In 2012,
New Jersey property taxes went up 1.4 percent, the smallest bump in more than two decades and a hard-
fought milestone for one of the highest-taxed states in America.

Governor Christie also enacted key tools to help municipalities controls costs and keep their budgets
within Governor Christies property tax cap (discussed above), including:
Signed bipartisan legislation capping public employee salary arbitration awards at 2%, requiring
arbitrators to consider the impact of salary arbitration awards on local property taxes, and
streamlining and expediting the arbitration process. The reforms have led to the lowest average
annual wage increase for public employee contracts in over two decades.
Created a pilot program to allow shared services agreements for certain personnel in pilot
municipalities to help towns share services with neighboring towns, thus reducing municipal expenses
and helping control the property tax burden on residents.
Consolidated April school board elections with November elections to reduce the cost of local school
districts administering elections as well as increase voter turnout at school board elections.

New Mexico, Governor Susana Martinez
Press Release: Governor Susana Martinez Signs Budget (04/08/11)
When Governor Martinez first came into office, she faced a $450 million deficit and reserves were
dangerously low. Governor Martinez prioritized spending, cutting where possible while protecting dollars
sent to the classrooms and preserving essential services that many New Mexicans depend on. She
successfully balanced the budget without raising taxes and FY11 reserves ended at well over 9%.

Ohio, Governor John Kasich
Press Release: Kasich Signs Historic Budget- Eliminates an $8 Billion Shortfall While Also Cutting
Taxes (06/30/11)
Ohios H.B. 1 represented the lowest growth budget in modern Ohio history. General Revenue Fund
(GRF) appropriations contained in H.B. 1 represented a 3.8 percent decrease compared to actual FY 2009
spending of $26.8 billion with appropriations set at $24.6 billion and $25.9 billion in FY 2010 and FY
2011. These appropriation levels not only resulted in a decrease compared to FY 2009, but also represent
the first time in modern Ohio history that biennial appropriations decreased compared to the previous
biennium. As a result of this negative growth, total spending for the four-year period of FY 2008 2011
will be 4.4 percent, which would be the lowest four-year growth level since at least 1947.

Pennsylvania, Governor Tom Corbett
Press Release: Governor Corbett Signs Budget, Cutting Spending, Without Tax Increases (06/30/11)
Pennsylvanias FY 2011-2012 budget was enacted with no tax increases
The budget refocused the investment of tax dollars into the core functions of government including:
Adhering to fiscal discipline
Promoting limited, transparent and effective governing
Supporting free enterprise and job creation
Funding students and promoting educational excellence
Protecting public health and safety
And maintaining the human services safety net
The 2011-2012 General Fund budget was $27.15 billion- a decrease of $1.17 billion, or 4.1 percent, from
2010-2011. Overall state spending was reset to 2008-2009 levels.

Tennessee, Governor Bill Haslam
State of Tennessee: State Budget FY 2011-2012
In spite of a down economy and a loss of $1.8 billion in federal stimulus money, Governor Haslam
prioritized and was able to put together a balanced budget for FY 2011-2012. The final $30.8 billion
budget reflected responsible investments, reductions and savings, including:
A $1 million tax cut for seniors
A 1.6 percent salary increase for state employees - the first in four years
Restoring $70.4 million to the Rainy Day Fund
$3.8 billion to fully fund the Basic Education Program, including a $48.7 million increase for K-
12 education
$71.3 million for disaster relief resulting from recent storms and flooding

Virginia, Governor Bob McDonnell
Press Release: Governor McDonnell closes budget gaps
Governor Bob McDonnell inherited two budget shortfalls. The first was a $1.8 billion in the concluding
FY 2010 budget. Through holding the line on discretionary spending, putting in place a hiring freeze in
state government, making conservative revenue estimates and incentivizing state employees to save
taxpayer dollars, the Governor turned that shortfall into a $403 million surplus in just 6 months.

The second shortfall was an even larger $4.2 billion in the FY 2011/2012 which Governor McDonnell
closed through spending reductions, not tax hikes. Governor McDonnells pension reform, requiring new
state employees to contribute to their own retirements for the first time in a generation, will save Virginia
$3 billion over the next ten years. Governor McDonnell also implemented a hiring freeze in state
government is saving $20 million a year.
Press: Virginias budget surplus will increase by at least $50M