Pro-Growth Efforts in States | This Week's Economy Ep. 100
What are they? I explain.
Hello Friends!
In this episode—and the show notes below—I discuss the recent momentum in the states to pass much-needed pro-growth reforms. You can watch the full video below or tune in on YouTube, Apple Podcast, or Spotify, and visit my website for more information.
1. SPEND LESS, PROSPER MORE
Policy Guidance:
Sustainable budgeting is crucial for protecting taxpayers and fostering economic growth. Many states, like the federal and local governments, have higher taxes from unsustainable spending. By implementing strict spending limits, states can control unnecessary spending growth, maintain fiscal responsibility, and promote a thriving economy.
Check out these key features of a Sustainable Budget, as outlined by Americans for Tax Reform and Club for Growth Foundation:
Comprehensive Coverage: Apply spending limits to the entire budget, or at least all state funds, to control unchecked spending growth.
Cap Based on Population Growth and Inflation: Limit the maximum budget growth to the prior 3-year average rate of population growth plus inflation, but most budgets should be 0% or cut because they are too large.
Supermajority Requirement for Exceptions: Any spending beyond the limit should require a supermajority vote (two-thirds), ensuring greater accountability.
Surplus Prioritization: Allocate surpluses to cut taxes or reduce debt instead of spending more.
State Updates:
Michigan should pass a Sustainable Michigan Budget, enabling the state to make better choices and avoid past mistakes.
Texas must address its spending problems to ensure long-term fiscal health.
Many red states are establishing government efficiency task forces, similar to Trump’s DOGE, to identify new ways to cut spending. Texas, Kansas, Louisiana, Missouri, New Hampshire, North Carolina, Oklahoma, South Carolina, and Wisconsin are leading this movement. The key to the success of federal and state DOGEs is that they expose and stop fraud, waste, and abuse as much as possible. Then they should highlight larger spending excesses to help push Trump, Congress, and state legislatures to make the spending cuts permanent.
Related: My recent take on how spending limits are best.
2. TAX REFORM TO CHAMPION TAXPAYERS
Policy Guidance:
Many states are exploring tax cuts to benefit residents and support more economic growth. However, sustainable budgeting must accompany tax cuts to prevent future deficits. Lowering taxes allows families and businesses to retain more money, but controlling spending is essential for long-term fiscal stability.
Momentum is building across the U.S. to reduce property taxes and flatten or eliminate income taxes. Eliminating property or income taxes can make a state more attractive to residents and businesses. Property taxes function as an annual capital gains/wealth tax, burdening homeowners with rising costs driven by bloated values and elevated tax rates. Even after paying off a mortgage, homeowners continue to pay property taxes, making them perpetual renters to the government. While more states are looking at eliminating property taxes, intermediate steps could be taken, especially for those with personal income taxes, as those should be eliminated first.
State Updates:
Texas Senate unanimously passed SB 4, advancing $3 billion in new property tax relief by raising the homestead exemption for school districts from $100,000 to $140,000 and holding government schools harmless from any revenue reduction. The House is expected to file legislation reducing school district property tax rates and holding government schools harmless. The tax rate reduction is the better approach because it helps all families and individuals, whether they have a homestead (primary) property, non-homestead property, rent, or business.
Iowa could cap property tax hikes at 2% per year.
North Dakota’s House Bill 1176 would limit property tax increases to 3%.
Indiana’s SB 1 will reduce property taxes for elderly and disabled veterans.
Florida Governor Ron DeSantis advocated for eliminating property taxes.
Kentucky Governor Andy Beshear recently signed a bipartisan bill to lower the state's income tax rate from 4% to 3.5%
Under Colorado’s SB-138, the new 4.25% income tax rate will be the baseline for future cuts until it is eliminated by 2035.
Kansas Senate passed two bills to provide some property tax relief.
Related: My recent AIER article on the case to eliminate property taxes.
3. SCHOOL CHOICE THAT EMPOWERS STUDENTS AND FAMILIES
Policy Guidance:
The current government school monopoly fails many families, particularly those in lower-income households. Universal Education Savings Accounts (ESAs) would allow families to allocate education funds to schools or programs that best meet their children's unique needs, expanding access to better educational opportunities.
ESAs allow families to choose from public, private, charter, or homeschooling options, breaking down barriers in education. This choice helps disadvantaged students escape underperforming schools, reducing cycles of poverty and crime while also fostering thriving communities.
State Updates:
Tennessee became the 13th state to adopt “universal school choice,
Texas passed school choice in the Senate (SB 2) and the House filed its school choice bill (HB 3). School choice is an emergency item by Gov. Abbott.
North Dakota recently passed House Bill 1540, and an ESA bill (SB 2400) remains in the Senate.
Idaho is being pushed by President Trump to pass school choice bill H.B. 93, which is awaiting a Senate vote.
Mississippi is also considering a school choice bill, currently stalled in the House.
South Dakota senators voted against the third school choice finance bill (SB 190) proposed their session.
Related: I chatted with TPPF’s Mandy Drogin about school choice.
4. REDUCE REGULATORY RESTRAINTS TO UNLEASH BUSINESS SUCCESS
Policy Guidance:
Reducing government-imposed obstacles is essential to unlocking opportunities and fostering job creation. By cutting unnecessary taxes and regulations, states can empower individuals and families and support a culture of self-reliance and dignity. These reforms offer immediate relief and lay the foundation for long-term prosperity and economic growth.
Reforms should focus on eliminating burdensome regulations that hinder expansion and innovation, particularly those affecting industries like AI and technology. Occupational licensing should be limited to situations that truly protect public health and safety, which are few and far between and most often best left to the free market. States should also regularly review and remove outdated or unnecessary regulations, ensuring that only those with a clear public safety purpose remain in place.
State Updates:
Texas’s HB 1709, an artificial intelligence regulation bill, would impose the harshest state-level restrictions on AI nationwide.
Utah’s SB226 narrows the scope of businesses required to disclose when customers interact with generative AI.
West Virginia University’s Knee Regulatory Research Center tracks occupational licenses in all 50 states, providing annual snapshots of licensing requirements for policymakers.
Mississippi’s Senate Bill 2248 will expand the Fresh Start Act to allow individuals with a criminal record to be eligible for an occupational license if the offense is unrelated to the license.
Michigan can pass Universal Licensing Reciprocity, recognizing occupational licenses earned in other states.
Related: Dr. Ed Timons explains the burdens of occupational licensing.
5. INCREASE AFFORDABLE OPTIONS FOR AMERICAN FAMILIES
My Policy Guidance:
American families face an affordability crisis, making it more challenging than ever to make ends meet. States should pass legislation to make significant portions of a family’s budget—housing, energy, and healthcare—more affordable.
States can make these essential areas more affordable and continue to attract people to start businesses, work, and raise families by adhering to free-market principles, reducing unnecessary spending, taxes, and regulations, and fostering competitive markets.
State Updates:
Many states and localities are considering zoning reforms, such as removing minimum lot sizes and parking limits, to allow for more housing development. Increasing the housing supply will help reduce housing costs. Notable reforms are happening in Texas and Washington.
Texas is considering several energy policy reforms this year.
North Carolina has an opportunity to reform energy policies to prioritize reliable and affordable energy for families and businesses.
North Dakota is considering a bill allowing data mining centers as long as they adhere to noise ordinances.
A new meta-analysis paper by the Cardinal Institute in West Virginia examines the effectiveness of Certificate of Need laws, finding that they rarely deliver the promised results.
Idaho’s House Bill 138 requires 11 Medicaid policy changes or the repeal of Medicaid expansion.
Indiana’s SB 2 will make major changes to the state’s Medicaid expansion program.
Related: When are good intentions enough? Ben and I discuss.
Want more solutions for policy wins that will let people prosper in your state?
Check out my 2025 Let People Prosper Policy Agenda.
Thanks for joining me in this episode of "This Week's Economy." For more insights, visit vanceginn.com and get even greater value with a paid subscription to my Substack newsletter at vanceginn.substack.com.
God bless you, and let people prosper!
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