Links for Monday, December 13, 2010

• A new NCSL report predicts that states will continue to face substantial budget gaps for the next three budget years (that is, through June 2014). Unsurprisingly, the states facing the most challenging budget situations include California, Nevada, Arizona and Illinois. Two bright spots: most state budget directors report that the tax revenue outlook is stable, after sharp declines since 2007.  And states with resource-heavy economies are faring relatively well: the AP story on the report cites West Virginia, but North Dakota and Montana have also been strong fiscal performers.

State stories:

• As E.J. notes below, incoming Governor Scott Walker (R) and other Wisconsin lawmakers are discussing abolishing public sector collective bargaining. Currently, North Carolina and Virginia prohibit collective bargaining for government workers; many states allow it only for some classes of workers, or allow it only by local option.
• Some politicians in Ohio are also talking about an end to public sector collective bargaining. Governor-Elect John Kasich (R) has not explicitly called for the move, but he does want to revisit the state's 1983 labor law that established collective bargaining and, for public-safety workers, mandatory binding arbitration.
• Speaking of mandatory binding arbitration, the Washington Post is endorsing a proposed reform in Montgomery County, Maryland, which would require arbitrators to place an emphasis on the county's ability to pay when determining pay increases. The editorial is called "Stacked Deck," and notes that 9 of 11 arbitration awards in the county since 1988 have favored the union side. Montgomery County's council is all-Democratic, but the measure has significant support, including from the council chairwoman. Maryland is a local-option state, meaning that counties do not have to allow public employee collective bargaining at all; the Post has previously noted the cost advantage of local governments in Virginia, where bargaining is prohibited.
• And on Friday, the New York Times (!) noted that tax considerations will be an important factor in Cliff Lee's decision to sign with the New York Yankees or the Texas Rangers. Texas has no state income tax, while New York City has the highest income taxes in the country. Of course, the Yankees also have the largest payroll in baseball and can afford to compensate players for their high tax bills. Back in July, I wrote about LeBron James's decision to sign with the Miami Heat, and what the difference between salary cap and non-salary cap sports leagues can tell us about interstate tax competition.