State and Local Fiscal Modernization Study Commission

As part of its Financing the Future program of work, IEI has provided research and ideas to the State and Local Fiscal Modernization Study Commission. Established by Governor Easley and the General Assembly in 2006, the commission is tasked with recommending ways to modernize the tax code. One of the two commission staff is Roby Swayers, a former Faculty Fellow for IEI.

Recommendations from the commission’s sub-committees on state taxation were consistent with IEI’s work on comprehensive reform – both the income tax and sales tax bases should be broadened, allowing rates to be lowered across the board.  At the same time, state revenues should be shifted from their current dependence on the income tax toward a better balance between income and sales taxes.
 
The key to reform, first identified by IEI’s Working Groups and then supported by the Commission, is a reform of the sales tax.  It is a revenue source shared by the state, counties and cities.  If placed on a broad base, it is a source that is relatively stable, it will grow with the economy, and it could provide significant additional revenues to counties and cities, possibly sidestepping the question of local options altogether.

Learn more on the work of the State and Local Fiscal Modernization Study Commission.