Sounds Like Gwinnett: California Built Its House on the Sand
Joseph Henchman of the Tax Foundation is criticizing a report on the money woes of ten states by the Pew Center. His assessment of California’s problems could apply, in principle, to Gwinnett’s situation:
A big cause of California’s budget crisis was spending commitments derived from overreliance on volatile revenue sources, particularly taxes on high-income earners, corporate profits, and capital gains revenue. These revenue sources soared during the boom, and legislators made spending commitments as if that soaring would never end. It did, and that’s where the budget hole came from…
Here, county leaders banked primarily on two revenue sources to fuel growth in government—property taxes on both commercial and residential development; and the Special Purpose Local Option Sales Tax (SPLOST) to build infrastructure.
