State Rundown 9/18: Special Tax Session Results? “Reply Hazy, Try Again”

As the dust settles after Nebraska’s whirlwind special session that ended earlier this month, it’s becoming clear that the rushed and unfocused session did not do much to advance its goal of reducing property taxes and seems to have inadvertently wiped out one year of existing property tax reductions in the process. That should sound a foghorn for leaders in Louisiana and West Virginia, where governors are proposing similarly unfocused special sessions with nebulous tax reduction goals. Meanwhile new polling in Washington state affirms yet again that when people are given a clear choice and unobstructed view of their alternatives, they choose to support shared priorities with progressive taxes time and time again.

 

Major State Tax Proposals and Developments

• Gov. Jeff Landry of LOUISIANA pitched a special session this November on tax reform. He proposed the legislature replace the state’s graduated income tax structure with a flat rate of 3.8 percent and nearly triple the standard deduction. These tax cuts will hypothetically be paid for by eliminating certain sales and income tax breaks, but no further details have been released on which exemptions will be targeted and how much revenue they will raise. – NEVA BUTKUS

State Roundup

• In local tax news, voters in the city of Littleton, COLORADO, could choose this November to more than double their retail marijuana tax from 3 percent to 7 percent.
• Three NEBRASKA lawmakers are calling attention to something that was missed during this summer’s special session: in the process of “frontloading” an existing property tax rebate so it directly reduces property taxes rather than retroactively refunding them, legislators effectively eliminated the program altogether for one year.  Lawmakers are proposing two means of restoring the missing year, but it is unclear if there will be an appetite for either fix when the body reconvenes in January.
• Also in NEBRASKA, the State Auditor’s office has warned about overuse and misuse of Tax Increment Financing (TIF) in the state, a perennial concern that the auditor says has been growing in recent years.
• Now that ballot language has been finalized for the proposal to eliminate WASHINGTON state’s Capital Gains Excise Tax — and courts have ruled against efforts to remove context about how eliminating it would reduce school funding – polling based on that final language shows very little support for the elimination effort.
• WEST VIRGINIA Governor Jim Justice is struggling to gain traction for his call for tax cuts in a special session he has scheduled for the end of this month. To date, Justice has not identified any specific spending cut proposals to offset the tax cuts he has requested, and legislative leaders seem skeptical.

What We’re Reading

• The Massachusetts Budget & Policy Center released a short brief pushing back on claims that the state is facing a crisis of outmigration; their argument is that those claims are overblown and calls for tax cuts for the very wealthy and big corporations are misguided solutions to an issue that is not supported by data.

 

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