The Adminstration's Growth and Jobs Plan

SEN. SUSAN COLLINS (R-ME): Thank you very much, Mr. Chairman.

Dr. Hubbard, I'd like to turn your attention for a moment to the impact of the president's proposal on state tax revenues. As I'm sure you're well aware, more than 40 states are facing severe budget shortfalls and are struggling with how to close those deficits because unlike the federal government they have to balance their budgets.

Like many states, my home state of Maine conforms its tax code to take into account changes in the federal tax laws and this is done automatically. That obviously simplifies life for Maine taxpayers but it has an impact when the federal government changes the tax code on the amount of revenues that the state of Maine collects.

According to preliminary estimates by the state of Maine the president's proposal has both good and bad news for the people of Maine. The very good news is that the proposal would save Maine taxpayers more than $350 million. The bad news is that the state, which is already struggling to close an enormous budget shortfall, would lose $40 million in tax revenues as the result of the president's proposal.

Could you comment on this issue, which is troubling to many of the states, particularly since the president decided not to include fiscal relief to the states as part of his package, which might have helped offset this impact?