Category: State Policy

This week as Americans celebrate Martin Luther King Jr.’s messages of resisting oppression and fighting for progress, state policymakers can look to some bright spots where tax and budget debates are bending toward justice. Among those highlights, Hawaii leaders are considering improvements to minimum wage policy, early childhood education, and affordable housing; Kansas Gov. Laura Kelly is seeking to reduce sales taxes applied to food and restore the state’s grocery tax credit; and advocates in Connecticut and Maryland are pushing for meaningful progressive tax reforms.

State tax and budget debates have arrived in a big way, with proposals from every part of the country and everywhere on the spectrum from good to bad tax policy. Just look to ARIZONA for a microcosm of nationwide debates, where education advocates have a plan to raise progressive taxes for school needs, Gov. Doug […]

Happy New Year readers! The Rundown is back to our usual weekly schedule as state legislative sessions and governors’ budgets and State of the State Addresses begin in earnest. Here’s to clear-eyed 20-20 vision guiding state tax and budget decisions in 2020! So far this year, the harm of Colorado’s TABOR policy and Alaska’s lack of an income tax are coming into focus in big ways. Utah advocates are hoping the benefit of hindsight will help convince voters to overturn a recently enacted tax overhaul. Lawmakers in states including Iowa, Maryland, and Virginia can clearly see a need for revenues, but are looking at mostly regressive options so far. And eagle-eyed lawmakers are looking to the tax policy horizon for innovative ways to tax foreign corporations doing business in Michigan and ways to fund infrastructure needs in the era of electric vehicles in Utah.

With the new year and many state legislative sessions just around the corner, most state tax and budget debates are just getting started. Arkansas will be among the states working to improve their roads and other infrastructure. Massachusetts will have to deal with revenue losses due to a misguided tax-cut trigger put in place in prior years. Maryland and South Dakota will be two of many states facing teacher pay shortages and other education funding needs. And debates over the legalization and taxation of cannabis will likely continue in California, Kentucky, New Jersey, and beyond. Utah lawmakers, on the other hand, are just now putting their 2019 tax debates to bed, having touched on many of the major tax themes of the year, both good and bad: enacting and expanding Earned Income Tax Credits (EITCs) and other refundable tax credits, expanding the sales tax base and cutting the personal and corporate income tax rates, and more. We at ITEP will be back to our regular weekly Rundown schedule in the new year!

In the last few weeks, Florida Gov. Ron DeSantis has served up his budget proposal, which advocates are eager to dig into and hoping to contribute to with a delectable Earned Income Tax Credit proposal of their own. Utah lawmakers have been cooking up tax ideas as well, but haven’t yet decided when to come to the table to debate them. And Maryland leaders finalized their menu of needed education reforms, now moving on to assigning responsibilities for funding them. With respect to dividing up the pie, our “What We’re Reading” section below includes reporting on evidence that corporate tax subsidies contribute to inequality at both the federal and state levels. We at ITEP are very thankful for your readership, support, and encouragement!

Many of yesterday’s Election Day votes came down to questions of whether or not to improve on upside-down and often inadequate state and local tax systems. The status quo was maintained in Colorado, where voters failed to approve a proposition to allow the state to invest tax revenue in education and other needs, and in Texas, where a constitutional amendment was approved to prohibit the state from creating an income tax. But voters supported important reforms in other states by approving needed funding for schools in Idaho, opting to legalize and tax recreational cannabis in California. And for more on why and how we can make tax policy more fair, find the link below to today’s live-streamed Tax the Rich conference!

As autumn brings a colorful display of foliage to many states, so too are tax proposals taking on interesting hues as states move from the summer off-season toward 2020 legislative sessions. Ohio lawmakers are blue in the face from debating and re-debating tax and budget issues there. Maryland residents again showed they can’t be called yellow-bellied when it comes to footing the bill for needed education improvements, showing their broad support for higher taxes to fund those needs even despite a hefty price tag. Alaska, Michigan, and other states are giving the green light to laws implementing their new ability to collect sales taxes from online retailers, and Massachusetts came out of the blue with a proposal to apply that ability to its corporate income tax. Meanwhile, anti-tax interests showed their true colors in pushing for personal income and business tax cuts in North Carolina and Utah, though advocates for tax justice aren’t by any means waving white flags in those states.

Creative thinking from Pennsylvania lawmakers has helped them discover that the Wayfair ruling allowing states to collect sales tax from online retailers can also help them identify and tax corporate profits earned in their borders. Similarly, New York leaders had the vision to put bold environmental goals in place and identify a carbon price as a potential pay-for. Gubernatorial candidates in Mississippi and Kentucky showed less ingenuity, proposing tax cuts even though Mississippi is still phasing in a massive tax cut from a few years ago and Kentucky’s next election isn’t until 2020. Meanwhile, the old idea of eliminating income taxes is so strong in Texas that anti-tax interests have gotten a constitutional ban on income taxes onto the state ballot even though the state doesn’t have one. And “What We’re Reading” is stocked this week with good reading about the role tax policy can play in addressing inequities related to income, wealth, and race.

Lawmakers in Michigan and New Hampshire made progress toward enacting their state budgets, though Michigan may yet end up in a government shutdown. Leaders in Wyoming advanced a proposal to create a limited tax on large corporations to raise some revenue and add a progressive element to their state’s tax code. Georgia agencies are forced to recommend their own funding cuts amid state income tax cuts. And business tax subsidies are looking particularly bad in Maryland, where subsidy money has been handed out without verification that companies were creating jobs, and New Jersey, where a false threat to leave the state was all it took for companies to bilk the state out of hundreds of millions in subsidies.

Residents of several states are spending their palindrome week reading ballot initiatives forwards and backwards to decide whether or not to support them, including measures to improve education funding in California and Idaho, allow Alaska and Colorado to invest more in public services, and constitutionally prohibit income taxation in Texas. New Jersey lawmakers are giving the same thorough treatment to the state’s corporate tax subsidies. And advocates in Chicago, Illinois, have a bold proposal to flip the script on upside-down taxes there. But devotees of good policy and honest government in North Carolina won’t want to re-read yesterday’s news in any order.

The hottest, stickiest month of the year has left a grimy feeling on several state tax debates, as Idaho lawmakers find themselves unable to fund the state’s priorities after years of cutting taxes, Alaskans express their support for public investments to their governor’s polling office and then watch the governor slash them anyway, New Jersey lawmakers go to bat for ineffective and corrupt business tax subsidies, and residents of North Carolina watch their representatives pursue cheap political points over sound investments and thoughtful policy. Nonetheless, residents and advocates on the other side of these and other debates have fought long and hard for better policy choices, and will undoubtedly continue to do so.

Over the last couple of weeks, leaders in Kansas and Missouri reached a historic agreement to stop giving away tax subsidies just to entice companies a couple of miles across their shared state line. Meanwhile, policymakers in Alaska resolved a stand-off over education funding...by cutting education funding slightly less. And California voters may be voting in 2020 on a stronger reform to the notoriously inequitable property tax effects of “Proposition 13.”

We've said it before, and we'll say it again: states don't have to wait for federal lawmakers to make moves toward progressive tax policy. And so far, 2019 has been a good year for equitable and sustainable tax policy in the states. With July 1 marking the start of a new fiscal year for most states, this special edition of the Rundown looks at how discussions in 2019 have been dominated by plans to raise revenue for vital investments, tax the rich and corporations fairly, use the tax code to help workers and families and advance racial equity, and shore up revenues for infrastructure.

Low-income working families got good news and bad news this week, as Earned Income Tax Credit (EITC) enhancements passed in California and advanced in Oregon, while minimum wage increases failed in Pennsylvania, Rhode Island, and Wisconsin. Meanwhile, the momentum for taxing wealth and the very rich continued to grow, as more one-percenters called for enacting progressive taxes, and Inequality.org held a star-studded conference on why and how to do so.