March 24, 2021
March 24, 2021
It was a relatively quiet week in state fiscal policy, likely partly due to states waiting for federal guidance on some of the details in the American Rescue Plan. As they await those details, lawmakers in Mississippi and West Virginia continue to wrangle over whether to recklessly eliminate their income taxes, while leaders in states including Connecticut and New York considered more productive and progressive reforms. And in the meantime, groundbreaking work on the intersection of race and tax policy is now available, linked below under What We’re Reading.
Major State Tax Proposals and Developments
- Lawmakers in the MISSISSIPPI Senate are once again opting to create a tax study commission to better understand the impact of broad changes to the state’s tax system. This past month in the Magnolia State saw the House recklessly pass a tax bill that among other things would eliminate the state’s income tax, a decision by the Senate to table and study the proposal, and a same-day revival of a similar House bill. While versions have slightly varied, the proposal asks the state’s poor and elderly to pay more while the state’s wealthiest benefit from a massive tax cut. – AIDAN DAVIS
- The WEST VIRGINIA House Finance Committee passed an income tax elimination proposal. While differing from Gov. Jim Justice’s recently proposed tax plan, both plans maintain the ultimate goal of full income tax elimination. – AIDAN DAVIS
- COLORADO Democratic lawmakers have asked the state Supreme Court to determine if a proposed tax bill that would gradually increase property taxes for education without a vote is permissible under the state constitution.
- CONNECTICUT lawmakers are considering implementing a Child Tax Credit to boost employment and income for middle- and low-income families with children.
- GEORGIA Gov. Brian Kemp has signed into law a bill that will increase the state standard deduction by $800 for single filers and $1,100 for joint filers.
- KENTUCKY lawmakers, in their annual revenue bill, restored the state’s film tax credit – once again making it refundable. The controversial bill now moves to Gov. Andy Beshear for consideration.
- Embattled NEW YORK Gov. Andrew Cuomo continues to resist efforts to improve the fairness and reliability of the state’s tax code by raising taxes on high-income households, despite growing wealth for those households and strong support for such reforms.
- Senate Republicans in NORTH CAROLINA are once again pushing for state tax cuts. Their plan would, among other things, decrease the state’s flat income tax rate to 4.99 percent (down from 5.25 percent), increase the amount of the standard deduction, and further lower corporate franchise taxes.
- Legislators in the NORTH DAKOTA Senate voted down a bill that would have given a tax credit to parents of children in private school.
What We’re Reading
- Dorothy A. Brown’s brand new book “The Whiteness of Wealth: How The Tax System Impoverishes Black Americans – And How We Can Fix It” is available now, and those interested can get a taste of the content in her recent articles in The New York Times and The Atlantic.
- The New York Times and Stateline explore how the American Rescue Plan changes fiscal debates at the state and local levels.
- Experts at Pew will be holding a webinar April 7 entitled “State Budgets: Lessons from COVID-19 and a roadmap for the future.” In the meantime they have posted articles on how states can manage economic uncertainty, how multi-year budgeting can help state and local governments avoid future shortfalls, and how thoughtful state-level policies can help local-level governments face their challenges.
- The Center on Budget and Policy Priorities explains the K-12 education funding contained in the American Rescue Plan.
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