Just Taxes Blog by ITEP

State Rundown 10/26: Off-Year Ballot Measures and State & Local Tax Policy

October 26, 2023

November elections are creeping closer and closer and while that typically means a new batch of lawmakers are elected, it also means voters have another chance to help shape state and local tax policy when they decide on important initiatives at the ballot box. A Texas initiative could prohibit wealth taxes if approved by voters, while another would enact property tax cuts totaling over $12 billion over two years. Needless to say, the cuts would only do more to ensure that Texas’s already upside-down tax system stays that way. Farther north, Colorado voters will have the option to approve property tax cuts, make changes to TABOR, and backfill local revenue with state funds. If you’re unsure about the major measures being considered, ITEP Communications Director Jon Whiten, has you covered in his new blog on the topic.

State Roundup

  • CONNECTICUT lawmakers formed a task force to consider eliminating the state’s car tax and ways to replace the lost revenue. The group will meet in November.
  • The ILLINOIS legislature will debate the extension of a tax credit that allows Illinoisans to donate to the Invest in Kids scholarship fund, a private school voucher program that directs public resources to private and parochial schools. The credit offers participants a deduction of 75 percent of their donation up to $1 million per filer.
  • The INDIANA State and Local Tax Review Task Force heard presentations from ITEP’s Neva Butkus, alongside analysts from other national organizations, regarding the state’s tax system. Despite the task force’s focus on exploring elimination or further reductions to the state’s flat individual income tax rate, the presentations were more heavily tailored to identify the harm of cutting tax revenue too deeply, options to make the state tax system more progressive, and alternative proposals like modifying sales and property taxes.
  • KENTUCKY gubernatorial candidates discussed eliminating the state’s income tax in their final debate. Despite the need for investment in the state, sitting Democratic Governor Andy Beshear supported continuing to cut the state’s personal income tax, its largest and most progressive revenue source.
  • MASSACHUSETTS Gov. Maura Healey threw her support behind a push to allow municipalities to enact real estate transfer taxes after including provisions in her $4 billion five-year housing bond bill. Specifically, a proposal would let communities impose a fee between 0.5 to 2 percent on property sales over $1 million or the local median home sales price, whichever is greater.
  • NEBRASKA leaders are talking property tax reform again this interim, with the state’s leading fiscal policy think tank and Gov. Jim Pillen both recently convening discussions on the matter. Some ideas have already been identified as ineffective, such as switching from market valuation of agricultural land to “use value” or artificially capping valuation growth. One expert mentioned having the state take over funding for teacher salaries, and multiple other approaches are reportedly under consideration by Gov. Pillen and a group of lawmakers working behind closed doors for now.
  • The NORTH DAKOTA Legislative Assembly reconvened for a special session to rewrite provisions of its budget bill after the Supreme Court struck it down for violating the single-subject requirement. While Gov. Doug Burgum urged lawmakers to use the special session to expand income tax cuts by reconsidering his proposal to permanently eliminate the personal income tax by increasing the threshold of the zero bracket to include more residents, that and other proposals were rejected by lawmakers after the revised budget was passed by the Legislative Assembly in three days.
  • Senators in WISCONSIN passed a $2 billion income tax cut bill that revives the legislature’s previous plan that was vetoed by Gov. Tony Evers earlier this year.
  • A joint committee in WYOMING has come out in support of four different property tax cut proposals that it will review in November.

What We’re Reading

  • Brookings has powerful new research out on Closing the Latino wealth gap. Their report identifies regional differences in economic security and barriers to building wealth through an examination of data and lived experiences in six large states. While the research covers much more than tax policy, some tax-related policies they recommend are expanding credits for caretakers of parents and older relatives, boosting incomes through mechanisms like the Child Tax Credit (CTC) and Earned Income Tax Credit (EITC), and rooting out property assessment discrimination.
  • Stateline highlights the red and blue states that have slashed taxes in recent years, the potential for an economic slowdown, and how that could affect state budgets.
  • The IRS is moving toward free direct online tax filing, rolling out a pilot program in 13 states next year. Among those are four states – Arizona, California, Massachusetts, and New York – teaming up with the IRS and organizations like Code for America to include state-level income taxes in the program.


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