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When economic conditions permit, states should accumulate budget reserves adequate to maintain services during recessions.

Deficit-reduction efforts should avoid cuts in programs that serve low- and moderate-income populations. 

States should not tie essential spending programs to unstable revenue sources. 

A progressive income tax is the preferred method of raising revenue at the federal and state levels. Other sources, such as a consumption tax, may be needed. 

Due to their regressive nature, raising state and local sales taxes should not be the first choice for increasing tax revenues. 

States and localities should include services in the taxable base to reduce regressivity and improve neutrality. 

Exemptions from state retail sales taxes should be narrowly designed to reduce their regressive nature and avoid pyramiding. 

Goods sold over the internet and through catalogs should be subject to the same sales tax treatment as goods sold by local brick-and-mortar retailers. 

Higher levels of government should provide adequate resources when mandating functions to lower levels of government.

Services should be implemented and operated by the level of government that can most appropriately and efficiently deliver them. 

Policymakers should broaden the tax base by limiting tax preferences that do not efficiently achieve important policy goals.