Just Taxes Blog by ITEP

State Rundown 11/10: It’s Beginning to Look a Lot Like…Election Season?!

State Rundown 11/10: It’s Beginning to Look a Lot Like…Election Season?!

November 10, 2021

ITEP
.ITEP Staff

If the leaves are turning colors and you find yourself walking out of the office into pitch-black darkness, it only means that time of the year is upon us—and no, I’m not talking about the holiday season. Before that, it’s the equally important election season, and although it’s not a major election year, voters across the country are making decisions about important proposals that could have significant state tax implications. Case in point: voters in Virginia elected Glenn Youngkin over Terry McAuliffe, and the new governor-elect announced his immediate plans to eliminate the grocery tax and suspend a recent gas tax increase to name a few. In Colorado, voters rejected two ballot propositions that would have increased the retail sales tax on marijuana and cut property tax rates. And in Louisiana, voters will get a chance to decide on massively regressive income tax cut on November 13.  

Major State Tax Proposals and Developments 

  • Two tax-related ballot measures were rejected by voters in COLORADO‘s recent November 2 election. Proposition 119 would have increased retail sales tax on marijuana by 5 percent to partially fund out-of-school education services, while Proposition 120 would have further reduced state property tax rates and authorized additional spending over the TABOR cap. — MARCO GUZMAN 
  • VIRGINIA Gov.-elect Glenn Youngkin plans to slash taxes on “day one” through a one-time rebate, eliminating the state grocery tax, suspending a recent gas tax increase, requiring voter approval for property tax increases, and other changes. The plan will inevitably lead to education cuts and potential cuts to local government. — KAMOLIKA DAS 

State Roundup 

  • CALIFORNIA cities are exploring their revenue options lately, including a vehicle-miles-traveled tax proposed in San Diego to supplement gas taxes and ensure electric vehicles contribute to infrastructure, and a real estate transfer tax proposed to address housing issues in Los Angeles. 
  • KANSAS Gov. Laura Kelly announced plans to eliminate the sales tax on groceries. 
  • MICHIGAN legislation to create a school voucher program could go into effect without the support of Gov. Whitmer if advocates collect 340,000 signatures and support from both legislative chambers. This voucher program, called Opportunity Scholarships, allows households to receive a tax credit for contributing to this program that then subsidizes private school tuition and other education services.  
  • In late October, the NEW HAMPSHIRE House Criminal Justice Committee rejected proposals to legalize and tax marijuana. 
  • New NEW YORK Gov. Kathy Hochul does not plan to depart from Andrew Cuomo’s stance on taxes, repeating misguided talking points about “driving people out of the state” when asked about progressive tax increases to improve funding and tax fairness. 
  • In NORTH DAKOTA, a House bill mirroring the governor’s proposal to provide a two-year $500 income tax credit using budget surplus revenue passed 83-7. Meanwhile, another House bill and a similar Senate bill that will eliminate state income tax on Social Security benefits were approved in their respective chambers. 
  • A few weeks ago, PENNSYLANIA Gov. Tom Wolf stated that companies receiving loans, grants or tax breaks will be required to provide paid sick leave and pay a $15 minimum wage by July 2024. The state minimum wage is set to the federal minimum of $7.25 an hour. 
  • The TENNESSEE Education Lottery stated that the state collected $32.5 million in sports gambling tax revenue in its first 11 months of operation, 80 percent of which goes to education. 
  • WASHINGTON State’s first-of-its-kind long-term care program and the payroll tax created to fund it are facing controversy. The program operates like Social Security, with residents paying in through a payroll tax in their working years to guarantee care is available if needed later in life. Residents could opt out by securing private long-term care insurance, but only had until the end of October to do so. Some detractors are filing a lawsuit, but Gov. Jay Inslee and lawmakers hope to address issues with the program in the upcoming session. 
  • The WEST VIRGINIA Finance Committee Chair in the House of Delegates has proposed reducing taxes by eliminating the personal property tax on vehicles and lowering the income tax rate. 

What We’re Reading 

  • blog post from Alexandra Sirota at the NC Budget and Tax Center outlines the various ways in which eliminating North Carolina’s corporate income tax—which is an option currently being considered in ongoing budget negotiations—will hurt the state.  
  • A discussion in The New Republic highlights the impact of South Dakota’s newly-discovered status as a tax haven and the implications that would arise should it be eliminated.  
  • The Oregon Center for Public Policy is holding a webinar next Thursday on the Racist Roots of the Tax System. 
  • Governing reminds readers of the importance of state and local Rainy Day Funds and reviews best practices for keeping them healthy. 
  • Route Fifty explains the Build Back Better proposal’s groundbreaking free preschool components and how costs would be shared between state, local, and federal levels. 

 

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