A state will still have to pay taxes on income generated by all the businesses it employs, but only on the highest tax bracket, which will increase in line with the economy.
The state has been trying to raise revenue by raising the state income tax rate.
But with a projected economic downturn, that’s no longer an option, according to economists at Moody’s Analytics.
Read more here.
The tax increases are a blow to the state’s ability to maintain a robust workforce and fund its basic services.
The cuts will also hit the bottom line for many businesses, including hospitals, schools, libraries and prisons.