Just Taxes Blog by ITEP

State Rundown 3/19: Spring Is Here but States Brace for Long Winter

State Rundown 3/19: Spring Is Here but States Brace for Long Winter

March 19, 2020

ITEP
.ITEP Staff

As the COVID-19 pandemic continues to disrupt more and more aspects of life and cause greater and greater harms to public health and the economy, information is changing by the hour. State policymakers, if they are even able to convene, are wholly focused on how to respond to the crisis. The pandemic is certain to pose a series of fiscal challenges for states and their economies, and this week’s Rundown focuses on the most helpful resources and the latest state-by-state updates available.

Recommended Reading on State Responses to COVID-19 Pandemic

  • Yesterday, ITEP staff published a blog recommending that states choose and prioritize their COVID-19 responses through a straightforward approach similar to that taken by health professionals: marshal and reinforce available resources, triage response options to prioritize the most vital services and most vulnerable people, and enact or strengthen the policies that will help address longer-term issues as well as immediate emergencies.
  • The Center on Budget and Policy Priorities has a number of relevant resources available, including recommendations for how Congress can help states weather the crisis, the case for Medicaid funding increases specifically, the current status of state unemployment insurance funds, and advice for governors on how to use newly granted flexibility under a federal response bill to protect nutrition for children and pregnant women.
  • The Economic Policy Institute’s Working Economics blog emphasizes the areas where state, local, and federal responses to the pandemic should be focused.
  • The State Innovation Exchange also has a helpful compilation of resources for policymakers.
  • Governing has up-to-date reporting on state and local budget shortfalls and service interruptions.
  • Pew’s State Fiscal Health Initiative and Stateline publication have a wealth of reporting and resources, including a catalogue of state actions so far, reporting on multi-state cooperative efforts, information on how rural health care systems are affected, a survey of state efforts to implement or expand paid leave, the dire outlook for states dependent on tourism-related revenues, and helpful advice for states on managing the crisis’s effects on markets and budgets.
  • Route Fifty reports on the threat of major virus-related state budget shortfalls, the particularly grave risks to imprisoned people, and information on which states and localities have suspended evictions to protect vulnerable people.
  • The New York Times points out how the coronavirus and inequality could be dangerously self-reinforcing.

State Roundup

  • ARIZONA‘s House Speaker alerted his fellow members of the plan to pass a basic budget that does not include tax cuts as the state looks to blunt the effects of the coronavirus outbreak.
  • An opinion piece out of ARIZONA highlights the effect COVID-19 may have on state ballot initiatives, including the campaign to increase taxes to support funding for schools. The author notes that new health and safety practices like social distancing could make rallies and signature collection efforts more difficult.
  • ARKANSAS‘s Gov. Asa Hutchinson is considering extending the deadline for paying state individual income taxes.
  • CALIFORNIA lawmakers have approved $1.1 billion for COVID-19 responses, while leaving a large share of decision-making up to local governments like San Francisco’s decision to defer tax payments.
  • Another year may pass before CONNECTICUT sees legalized cannabis or movement on sports betting legislation. For now the state’s revenue department is extending deadlines for business tax returns and gearing up for the impact of COVID-19.
  • The DISTRICT OF COLUMBIA Council passed sweeping emergency legislation that extends unemployment compensation, prohibits evictions, and delays retail sales tax payments by stores and restaurants, among other provisions.
  • FLORIDA lawmakers passed a trimmed-down tax-cut package to bolster state reserves for COVID-19 response. The package still includes “tax holidays” for back-to-school and disaster preparedness, but left out proposed tax cuts for communication services, commercial leases, aviation fuel, and rental car companies.
  • GEORGIA‘s legislative session is suspended indefinitely due to concerns about COVID-19.
  • The impact of COVID-19 in HAWAII is starting to take shape as the state’s Council on Revenues projects that it could mean a $300 million hit to state tax collections. Lawmakers are exploring spending cuts and revenue raisers. The Hawaii Budget and Policy Center released a series of briefs that focus on policy and spending decisions that can help the state weather the effects of COVID-19.
  • Legislative sessions have again been canceled for the upcoming week in ILLINOIS with uncertain return dates as the state is seeing a surge in confirmed COVID-19 cases. Lawmakers have yet to approve a budget for the fiscal year that starts July 1 and have other pressing measures to consider, including a hospital bill that implicates $3.5 billion in federal funding. How and when lawmakers will convene to finish this work remains to be determined.
  • The KENTUCKY legislature continues to meet while the Capitol is closed to the public. They expect to wrap up session next week. The Kentucky Center for Economic Policy discusses the Senate budget here.
  • The LOUISIANA legislature has temporarily adjourned until the end of March due to concerns about COVID-19.
  • MAINE lawmakers reached a bipartisan deal on a statewide COVID-19 response package this week. They will adjourn for the time being.
  • MARYLAND‘s legislature approved a new tax on digital advertising services, the first state to do so. The proposed tax contains a tiered tax rate structure that ranges from 2.5% to 10%, depending on the advertising service provider’s global annual gross revenues.
  • In response to the COVID-19 outbreak, MICHIGAN Gov. Whitmer signed an executive order extending the tax foreclosure deadline from March 31 to May 29 or a month after the current state of emergency ends, whichever comes first.
  • MINNESOTA‘s Department of Revenue is giving businesses required to close as a result of the governor’s recent executive order a 30-day sales and use tax payment extension.
  • The MISSISSIPPI House passed the Marketplace Facilitator Act, which would require large online retailers to collect the 7 percent tax on items they sell owned by other companies. Mississippi is one of only five states that do not require online retailers to collect the tax.
  • MISSOURI leaders are waiving late tax filing fees for 90 days, delaying final votes on their budget until they get more information about possible revenue and service impacts, and will hopefully listen to calls to finally expand Medicaid.
  • NEBRASKA lawmakers were just about to return to debates over the state budget, property taxes, school funding, and business tax subsidies, but have suspended their session indefinitely. When they are able to return to business, OpenSky Policy Institute has some clear-headed recommendations for them.
  • NEW JERSEY leaders passed a package of 29 bills in response to the crisis, but have work left to do, such as enacting Gov. Phil Murphy’s millionaires’ tax. New Jersy Policy Perspective provides a list of do’s and don’t’s lawmakers can rely on.
  • NEW YORK is facing at least a $4 billion deficit for the coming fiscal year in the face of responding to COVID-19. Lawmakers continue to negotiate a budget. The Fiscal Policy Institute released a brief pointing out the economic cost of the pandemic, while identifying revenue needs.
  • In MASSACHUSETTS, emergency legislation has been filed to help workers and municipalities.
  • A NEW MEXICO business group is calling on the governor to provide assistance amid the coronavirus pandemic to protect against increases in the amount of unemployment insurance taxes businesses pay.
  • NORTH CAROLINA lawmakers are largely steering clear of the capitol building for now but are expected to return for a special session down the road. A summary of the Tar Heel State and federal policy responses to COVID-19 is available here.
  • OHIO and PENNYSLVANIA lawmakers are working through bills to deal with the impact of COVID-19 in their states. A major component of that is determining how to continue the work.
  • The TENNESSEE Attorney General released an advisory opinion that the General Assembly has the authority to provide low-income and disabled seniors with relief from property tax debts and the potential delinquent tax sale of their property.
  • The VERMONT House passed an emergency response package. The Legislature has temporarily adjourned.
  • In the U.S. coronavirus epicenter of WASHINGTON State, lawmakers devoted $200 million from their Rainy Day Fund to response efforts before adjourning. But Seattle alone is expecting $100 million of revenue loss, so more action will likely be needed.

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