State tax cutting trend faces headwinds from declining revenues and tighter budgets

Almost every U.S. state has cut taxes in some way in the past three years. But that trend may be slowing as many states head into their 2024 legislative sessions with lagging tax revenues. Every state except Alaska and Nevada has enacted either permanent cuts, temporary suspensions or one-time rebates on their income, sales, property or gas taxes. Neither Alaska nor Nevada charges an income tax, and Alaska also has no statewide sales tax. Though states ended 2023 with record fund balances, those are expected to decline in 2024. California is expecting the biggest hit, with a projected $68 billion budget deficit.