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Rhode Island, Connecticut, California, and Massachusetts.

Job growth averaged 0.0 percent in the tax-increasing states

and 10.8 percent in the tax-cutting states.  None of the

tax-cutting states lost jobs.  Most noteworthy of all is the

situation in New Jersey.  After Florio's $2 billion income

tax hike in 1990, the state lost 275,000 jobs.  Since Whit-

man's 30 percent income tax cut, vi5rtually all of those jobs

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have returned to the Garden State.

Unemployment Rate

The superior job creation performance of the tax-

cutting states is also revealed in the unemployment data.

At the end of 1995 the unemployment rate was, on average,

4.7 percent in the 10 tax-cutting states and 6.0 percent in

the 10 tax-raising states.  The unemployment rate fell in

the 1990s by 0.5 percentage points in the tax-cutting states

but by only 0.2 percentage points in the tax-raising states.

Since Engler began his tax-cutting agenda in Michigan, the

state has seen its unemployment rate fall from 1 percent

above the national average to below the national average.

At 4.3 percent, Michigan now has its lowest unemployment

rate since before Ford introduced the Mustang some 30 years

ago.

Incomes

Total state income grew by 32.6 percent in the tax-

cutting states and by 27.0 percent in the tax-raising

states.  Per capita income grew 21.8 percent in the tax-

raising states, slightly below the 23.4 percent average in

the tax-cutting states.  That translated into a $400 greater

increase in per capita income in the tax-cutting than in the

tax-raising states.

Budget Reserves

The budget reserves of the tax-cutting states (7.1 per-

cent of state expenditures) were much higher than of the

states that had raised taxes (1.7 percent).  That is, tax-

cutting states are in better fiscal health this year than

are tax-increasing states.  New York's experience is in-

structive.  A recent study by the Empire Foundation, a state

think tank in New York, found that "even when the final and

deepest phase of New York's income tax cut is implemented

this year, the state's resurgent economy appears likely to

generate more income tax revenue under Gov. Georg6e Pataki

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than it ever did under former Gov. Mario Cuomo."