Either the state will have to come up with more money in the future, or the estimate of needed funding will have to be revised downward. With such fiscal pressures hanging over her head, New Hampshire Governor Jeanne Shaheen has not proposed any tax cuts for the current year or the next biennium. In most other states, tax cuts have been proposed or enacted. Percentages dedicated to tax reduction range from 35 percent in Vermont to 0 percent in Rhode Island. Note how sharply reserves have been built up and, conversely, how dramatically they're going to shrink.
Additional factors affect state reserves.
First, the chart calculations do not take into account tax cuts already enacted and scheduled to take effect next year. Second, some proposed tax cuts for the next budget cycle would be phased in over several years. Their revenue consequences would grow sharply over time. An example is Governor Cellucci's recommendation to reduce Massachusetts' personal income tax rate from 5.95 percent to 5 percent. Finally, some tax cut proposals that have yet to be introduced officially have received serious attention.