October 31, 2018
October 31, 2018
Look out for potholes if you’re out trick-or-treating in Alabama tonight, where crumbling infrastructure figures to be a dominant debate in the coming legislative session. And be prepared to share the streets with disgruntled teachers if you‘re in Louisiana, where teachers are walking out to protest regressive tax policies that are sucking the lifeblood from the state’s schools. Meanwhile, Wisconsin residents are sharing scary stories of grotesquely large business tax subsidies and the “dark store” tax loophole they’ll be voting on next week. And you better expect the unexpected if you’re in Delaware, where Gov. John Carney shocked everyone by vetoing two broadly supported tax bills last week.
— MEG WIEHE, ITEP Deputy Director, @megwiehe
Major State Tax Proposals and Developments:
- DELAWARE Gov. John Carney surprisingly vetoed two tax bills last week, both of which were passed with broad support in the legislature with the intention of improving the of targeting state tax credits to residents most in need. One bill would have limited a senior tax credit to those most in need, while the other would have made the state’s Earned Income Tax Credit refundable, greatly improving its value for low-income working parents. — DYLAN GRUNDMAN
- Teachers in East Baton Rouge, LOUISIANA are joining the ranks of educators across the nation who are turning to walkouts to protest regressive tax policies that divest their students of the resources needed to invest in their educations. While the timing of the walkout has been delayed momentarily, educators’ frustration with generous tax breaks for large and profitable businesses at the expense of their schools will not be so easily displaced. There’s a reckoning coming! — LISA CHRISTENSEN GEE
- November 1st marks a turning point in state and local sales taxation as SOUTH DAKOTA, the state at the center of the Supreme Court’s Wayfair decision allowing states to collect sales taxes from online retailers, will in fact begin requiring remote sellers to collect and remit those taxes. Read up on the decision and how states around the country are responding here. — DYLAN GRUNDMAN
- ALABAMA lawmakers expect their crumbling infrastructure and need for a gas tax update to dominate the 2019 session.
- Dark stuff is happening in WISCONSIN. At the state level, tax incentives for Foxconn—the largest tax incentive package ever granted–continue to grow and now exceed $4 billion. But at the local level, 17 counties and 6 municipalities are giving their voters the opportunity to decide whether to put an end to the “dark store tax loophole” where by big box retailers have been able to lower their property taxes by millions.
- Curious about CALIFORNIA’s response to taxing online sales from remote sellers? The wait is over! State officials discussed their planned response during a stakeholder meeting held last week. After a period of taking public comments, the Department of Tax and Fee Administration will release public notice.
- MAINE’s outgoing Gov. Paul LePage released a budget framework that unsurprisingly includes cuts to the state’s personal income tax. Revenue adequacy is the least of his concerns as he recommends eliminating the state’s top tax bracket and lowering the rates of the remaining brackets. Ultimately, the upcoming 2-year budget will be developed by the governor-elect.
- Cannabis advocates in OKLAHOMA filed a class-action lawsuit against the state. They accused Oklahoma officials of imposing regulations and fees beyond what was stipulated in State Question 788 which, approved by voters in June, established the Oklahoma Medical Marijuana Authority.
- The federal control board overseeing PUERTO RICO’s finances announced the need for both tax and labor policy reforms. Varying approaches have been taken by the local government and the island’s oversight board.
- NEBRASKA’s revenue forecasting board met last week and projected a $232 million shortfall, reducing the likelihood of further tax cuts in 2019, though that won’t stop anti-tax interests from trying.
- A group of MISSOURI seniors known as the Silver Haired Legislature held their annual meeting earlier this month and identified a more progressive income tax code as a top recommendation.
- MISSIPPIPPI’s decision to tax Airbnb rentals has brought in $1 million for state services in the first year.
- Cities in WASHINGTON state are standing behind the city of Seattle’s claim that it has the legal authority to levy an income tax. Among the cities signing onto Seattle’s amicus brief before the state’s Supreme Court is Olympia—whose city council opposed a resolution to adopt an income tax proposal in 2016. Washington state has the most regressive tax system in the country, with the lowest-income taxpayers paying almost six times the taxes as a share of their personal income as the state’s wealthiest taxpayers.
- Also in Seattle, WASHINGTON the city council is studying whether to exempt menstrual hygiene products from the city’s portion of the sales tax.
On (and Off) the Ballot:
- All indicators are that it is the week before the election and supporters of an effort to repeal CALIFORNIA’s recent gas tax increases are feeling desperate–polls are showing the vote will be close and the budgetary, ecological, and political stakes are high. Proponents of the measure are funding calls telling voters there is an “error” one their November ballots and have also pledged to lead an effort to recall the state attorney general for writing a “purposefully deceptive title for the ballot measure.”
- Will WASHINGTON state be the first place in the US to enact a carbon tax? Stay tuned next week to find out. Here is a primer on the measure and Governing’s analysis on its likelihood of success.
What We’re Reading…
- In addition to our own review of tax-related ballot measures from last week, we encourage you to check out Governing’s series on state and local ballot measures.
- The credit ratings agency Moody’s Investors Service is adding its voice to the chorus of experts and institutions concerned about the harms caused by extreme inequality. A recent Moody’s report connects rising inequality to economic and social issues large enough to undermine the U.S.’s ability to pay its debts.
- The Hidden Tribes of America, a research project from More in Common, demonstrates that the U.S. has become divided into several “tribes” of belief systems, but argues that most of us still fall into an “exhausted majority” that is not as deeply divided as the vocal extremes might make it seem.
- Although Ohio has the 13th most unfair tax system in the nation, conversations on how to create a fairer and more sustainable tax system are jarringly absent in conversations among the state’s gubernatorial candidates.
- The Georgia Budget and Policy Institute makes the case for creating a state EITC and improving the state economy by embracing equity and inclusion.
- Route Fifty reports on the growing gap between relatively well-funded and abysmally underfunded pension plans.
- Evidence continues to mount that corporate tax cuts will not transform, or even grow, the U.S. economy. The latest from a MarketWatch opinion piece.
If you like what you are seeing in the Rundown (or even if you don’t) please send any feedback or tips for future posts to Meg Wiehe at [email protected] Click here to sign up to receive the Rundown via email.
TagsITEP State Rundown
- Corporate Taxes
- Education Tax Breaks
- Federal Policy
- Personal Income Taxes
- Property Taxes
- Sales, Gas and Excise Taxes
- State Corporate Taxes
- State Policy
- State Reports
- Tax Analyses
- Tax Basics
- Tax Credits for Workers and Families
- Tax Credits for Workers and Families
- Tax Reform Debate
- Who Pays?