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While there is no estimate – or even definition – of freebies, Chhattisgarh, Tamil Nadu, Punjab, Madhya Pradesh, and Bihar spend the most on subsidies as a percentage of their State Domestic Product. Meanwhile, Delhi is ahead on spending on public health and education.
“Internal estimates suggest that if all the State governments revert to OPS from the National Pension System (NPS), the cumulative fiscal burden could be as high as 4.5 times that of NPS, with the additional burden reaching 0.9 per cent of GDP annually by 2060” said the report titled “ State Finances: A Study of Budgets of 2023-24” released on Monday.
It is possible to get government spending on a more sustainable trajectory, as a number of states have demonstrated over the past decade.
A recent report from the Georgia Department of Audits and Accounts examines the monetary costs and benefits of the state's Qualified Education Expense Tax Credit (QEEC), a voucher policy that provides a public subsidy for families to pay for private school tuition. A review of the report, however, contradicts its claim that the policy provides a net fiscal benefit to the state budget.
Budget agreement released this week would give NC the nation's ninth universal school choice program, put state on the path to having the lowest flat tax in the U.S.