May 6 (Bloomberg) — Bold talk of cutting state income taxes is becoming muted as U.S. governors and legislatures face the reality that they can't afford to keep their promises, even in an improving economy.
New Jersey Republican Chris Christie's ambitions to reduce what individuals pay have been sidelined by his administration's overly optimistic budget projections. Connecticut Democrat Dannel Malloy shelved a rebate plan April 28. And lawmakers in Missouri today overturned a tax cut veto by Democratic Governor Jay Nixon, allowing the reduction to go into effect only after annual revenue growth reaches a certain level, starting in 2017.
Nationwide, state revenue growth in the year's first three months rose less than 1 percent from a year earlier, according to estimates by the Nelson A. Rockefeller Institute of Government in Albany, New York. That's the smallest gain since 2010, and it has forced reconsideration — or abandonment — of pledges of relief.
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