Just Taxes Blog by ITEP

State Rundown 1/24: States Reflect on MLK’s Dream and Teacher Uprisings

January 24, 2019

This week, as Americans in every state celebrated Martin Luther King Jr. Day and reflected on his dream of peaceful protest and racial and economic justice, many eyes were on the teachers’ strike pressing for parts of this dream amid the “curvaceous slopes of California.” Governors and lawmakers in many states—including Arizona, Georgia, Indiana, Louisiana, Nevada, New Mexico, South Carolina, and Wisconsin—discussed ways to raise pay for teachers and/or enhance education investments generally. Our “What We’re Reading” section has much more on the current status of King’s dream in the states and the movement for better and more equitable funding for our schools. And don’t forget to also celebrate Earned Income Tax Credit (EITC) Awareness Day tomorrow!

— MEG WIEHE, ITEP Deputy Director, @megwiehe

Major State Tax Developments and Proposals

  • MASSACHUSETTS lawmakers have relaunched the state’s popular millionaires tax proposal. The proposed legislation would amend the state constitution, imposing a four-percentage-point surcharge on residents making more than $1 million. If passed, the tax is expected to raise over $2 billion a year that would be spent on the state’s schools, universities and transportation systems. — AIDAN DAVIS
  • After ARIZONA lawmakers of his own party balked at the governor’s decision to side-step federal tax conformity in his executive budget, legislators are pushing to couple the state changes as a result of federal law with income tax cuts. It has been estimated that the tax cuts would cost the cash-strapped state $150 million. At the same time, lawmakers are pushing for a sales tax hike, which would fall more heavily on low- and middle-income Arizonans, to fund education. — AIDAN DAVIS
  • NEW MEXICO lawmakers have introduced a bill to reduce the state’s reliance on oil and gas revenue and improve the progressivity of the state’s personal income tax while increasing investments in education and infrastructure. — LISA CHRISTENSEN GEE

Governors’ Budget Proposals and State of the State Speeches

  • ALASKA Mike Dunleavy introduced three constitutional amendments that would effectively tie the hands of the state government in his speech earlier this week. They would establish a spending limit and spending plan for the state, ensure no changes to the statutory formula that determines the Permanent Fund Dividend (PFD), and allow for no tax changes without a vote from Alaska residents.
  • DELAWARE John Carney, after vetoing a widely supported bill to convert the state’s Earned Income Tax Credit (EITC) to a refundable credit that would do more for lower-income working families, was mum on the subject in his address last week. He did focus on adhering to a budget smoothing plan to avoid overspending in good years and build reserves for bad years, even though efforts to enshrine such a system in the state constitution failed last year.
  • New GEORGIA Brian Kemp did not deliver on his campaign promise to give teachers a $5,000 annual raise, but did include a $3,000 raise in his budget proposal. He also proposed to borrow money to replace election infrastructure and repair bridges.
  • In HAWAII David Ige’s recent speech, he focused on affordable housing, the transient accommodations tax (TAT) and provided a roadmap for universal preschool.
  • IOWA Kim Reynolds did not focus on fiscal issues in her speech.
  • Charlie Baker of MASSACHUSETTS released his executive budget this week. It included an increase on real estate transfer tax to fund climate adaption programs, expanded Medicare coverage, and a bill to adjust the state’s school funding formula.
  • New NEVADA Steve Sisolak is, like many governors this year, proposing to raise teacher and state employee pay, and promising he can fund that and other priorities without raising taxes.
  • WISCONSIN Tony Evers delivered his first State of the State address, calling on lawmakers for bipartisanship to fund middle-income tax cuts by scaling back the state’s Manufacturing and Agriculture tax credit, fund roads, and increase investments in public education.

State Roundup

What We’re Reading

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