State legislators should tax profitable corporations to generate additional revenue before resorting to budget cuts to solve for a financial crisis brought on by COVID-19 that could cost the state billions in lost taxes, a coalition of community, labor and faith-based organization said Tuesday.
The Raise Up Coalition, which has been behind multiple successful ballot campaigns, wrote a letter to legislators urging them to raises taxes before pursuing "severe budget cuts" that it worries will worsen the impacts of the economic downtown.
Some economic experts have predicted that anticipated revenues in fiscal 2021 could come in $6 billion short of what had been projected a few months ago. The coalition argued that students, colleges, hospitals, public transit and direct care workers will need more financial support in the coming months, not less.
The coalition said that deep budget cuts would be "exactly the wrong response." While it did not recommend any specific tax policy changes, the letter argued that large corporations "use loopholes to hide their profits" and "exploit tax breaks to avoid paying their fair share of taxes."
"Throughout the economic crisis we're facing, many large corporations continue to generate enormous profits that flow to their extremely wealthy shareholders. It's time that they pay more to support our economic recovery," the coalition wrote.
The coalition also said the state legislators should not hesitate to tap into the state's $3.5 billion "rainy day" fund.
"But if federal aid and the state's rainy day fund are not sufficient to make up for the drop in state revenue, state lawmakers must pursue progressive revenue options to close the gap," the coalition wrote.
The pandemic's impacts have unevenly affected businesses, but many are struggling to stay afloat amidst rising unemployment and sharp declines in consumer and business confidence.