Just Taxes Blog by ITEP

State Rundown 3/20: Investments Over Cuts

March 20, 2024

Over the past week Utah continued its slow march toward a more inequitable tax code when Gov. Spencer Cox approved yet another cut to the state’s flat income tax. This makes it four years in a row that lawmakers have approved rate reductions, and while they have come at a slower pace than states that have made more drastic cuts, the result is the same: state coffers starved of revenue for public investments—in this case to tune of roughly $1 billion—and a more inequitable tax code. Meanwhile, new tax cut proposals in Kansas keep popping up, with little discussion on the impact of revenue loss.

Yet other states, like Maryland, are considering revenue raising proposals. A new tax package in The Old Line State would create and increase a range of tolls and fees, while closing corporate tax loopholes. Read more here on state moves this year to tax the wealthy and raise revenue to invest in public goods.

Major State Tax Proposals and Developments

  • UTAH will cut taxes for the fourth straight year after Gov. Spencer Cox signed into law a bill lowering the flat income tax rate for individuals and corporations from 4.65 percent to 4.55 percent. According to ITEP analysis, the bill will provide the wealthiest residents with the biggest benefits and cost the state around $180 million in forgone revenue. – MARCO GUZMAN
  • MARYLAND lawmakers have introduced a new revenue package aimed to raise about $1.2 billion to address the state’s revenue shortfall and avoid cuts to transportation and education programs. The package includes the loophole closing worldwide combined reporting for corporations, legalizing online gambling, new fees on electric vehicles, new fees for ride-share trips, and higher tolls for out-of-state drivers. – MILES TRINIDAD
  • House Republicans in KANSAS have unveiled a new tax cut proposal in response to the Senate’s most recent flat tax plan. The House plan would eliminate the bottom tax bracket of 3.1 percent, reduce the second- and third-income tax brackets by .05 percent, phase-out income taxes on Social Security income, and cut property taxes. – NEVA BUTKUS

State Roundup

  • Competing property tax proposals continue to move through the GEORGIA legislature. The Senate is looking to cap property tax assessment increases at 3 percent. The House is moving a proposal to expand the state’s homestead exemption to $10,000. Meanwhile, the state recently passed a fetal personhood bill has resulted in an additional $100 million in claimed dependent exemptions.
  • In ILLINOIS, a Chicago ballot measure to enact a “mansion tax” on expensive real estate transactions came up short in Tuesday’s election, preliminary results show. The new tax would have raised an estimated $100 million annually to address Chicago’s housing and homelessness crises.
  • Tax cut proposals are still making their way through the IOWA legislature, despite dipping revenue estimates.
  • A MISSOURI gubernatorial candidate proposed elimination of Missouri’s personal income tax, as well as rolling back a gas tax hike. The personal income tax funds the majority of the state’s general fund, but Ashcroft claims elimination is possible through spending cuts and other tax hikes. His advisory committee draws heavily from those behind the disastrous “Kansas experiment” that lead to a collapse in state services and revenues, a rollback of many tax changes, and a change in party control of the Kansas governorship.
  • A new group has formed in opposition to the effort to replace most of NEBRASKA’s tax system with a single extremely regressive consumption tax.
  • NEW JERSEY lawmakers sent bills to the governor that would increase the state gas tax 1.9 cents per gallon for 5 years and authorize a $250 fee on electric vehicle owners. The bills are a part of an eight-year Transportation Trust Fund reauthorization bill, which is mandated by 2016 law, requiring a “steady stream of revenue” to support the program.
  • A lawsuit seeking to rectify property tax assessment inequities in NEW YORK will proceed after a recent court ruling. The plaintiffs hope to force reform to a system that has resulted in higher property taxes on minorities and low-income households for decades.
  • A group of bills that would cut property taxes in WYOMING have been approved by the Legislature and await further action by Gov. Mark Gordon. The bills would, to varying degrees, either expand exemptions or broaden the state’s property tax refund program.

What We’re Reading

  • As Maryland lawmakers continue to debate ways to address the state’s revenue shortfall, commentary by CBPP’s Don Griswold in Maryland Matters discusses how multinational corporations engage in tax dodging, a practice that deprives states of revenue to fund key priorities, and how worldwide combined reporting can end these practices.


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