May 1, 2019
Deputy Executive Director
May 1, 2019
Teachers in North Carolina and South Carolina are walking out and rallying this week for increased education funding, teacher and staff pay, and other improvements to benefit students—if you’re unsure why be sure to check out research on the teacher shortage and pay gap under “What We’re Reading” below. Meanwhile, budget debates have recently wrapped up in Indiana, Iowa, Massachusetts, New Hampshire, and Washington. And major tax debates are kicking into high gear in both Louisiana and Nebraska.
— MEG WIEHE, ITEP Deputy Director, @megwiehe
Major State Tax Proposals and Developments
- There are a lot of hot tax topics alive in the LOUISIANA legislature: efforts are underway to make it easier for businesses to get tax exemptions (despite questionable returns on investment), other lawmakers are working to bring back the state’s recently eliminated sales tax holidays, an attempt to modernize the state’s gas tax faces election-year challenges, and the “tampon tax” or “diaper bill” is back for another attempt at sales tax exemption. — LISA CHRISTENSEN GEE
- After months of negotiations, members of NEBRASKA’s Revenue Committee advanced a package of tax changes to be considered by the full legislature. The package increases the sales tax rate, closes sales tax exemptions for personal services and home and car repairs, raises the tobacco tax, and halves an existing property tax credit, funneling the revenue increases into increased state school contributions to bring down property taxes, while also slightly increasing the Earned Income Tax Credit (EITC). The package remains controversial and faces an almost certain veto by Gov. Pete Ricketts if passed. — DYLAN GRUNDMAN
- In CALIFORNIA, April tax returns more than resolved concerns regarding potential revenue shortfalls, an effort to enact a statewide soda tax was pulled to build more support for 2020, and the online sales tax is now law.
- IN COLORADO, a bill to tax vaping and increase the state’s tax on tobacco products is moving in the House. New revenue from the bill is slated to fund health programs, preschool, and after-school activities. Lawmakers are also considering legislation to funnel more revenue from marijuana taxes to help fund full-day kindergarten and school construction projects. Legislative session ends May 3.
- Legislators in CONNECTICUT, at least for now, are postponing the debate over a surcharge on capital gains. A study committee has been tasked with exploring the capital gains income of the state’s top earners.
- In HAWAII, lawmakers in the Senate narrowly passed a vacation rental tax bill that would require businesses like Airbnb to collect and pay taxes on behalf of short-term vacation rental hosts. This, along with a bill to tax real estate investment trusts (REITs), now move to the governor for consideration.
- INDIANA legislators wrapped up their budget and legislative session. Bills enacted this year will facilitate sports betting and a new casino, increase child services funding, shut down an Amtrak line from Indianapolis to Chicago, and hold education funding essentially steady—failing to raise teacher salaries as many had hoped and fought for. The budget maintains $2 billion in reserves in preparation for a potential recession.
- IOWA lawmakers enacted an anti-tax procedural hurdle that will require cities and counties to hold special public hearings and achieve a two-thirds supermajority vote to raise property taxes more than 2 percent.
- The MASSACHUSETTS House passed a budget late last week. The proposal avoids any significant tax increases. The NEW HAMPSHIRE House budget is wrapped up as well, now moving to the Senate. NH Fiscal Policy Institute weighs in on the proposal.
- The MINNESOTA legislative session is in the home stretch, with resolution on many big bills still outstanding. The House just passed a transportation bill that includes a 20-cent gas tax increase mirroring the governor’s proposal, setting up for a debate with the Senate whose transportation bill relies entirely on existing revenue and the current budget surplus.
- NORTH CAROLINA budget proposals are beginning to surface in the state House; proposals include taxes on ride-sharing services, like Uber or Lyft. Additional funds to increase teachers’ wages continue to be discussed—while broad revenue-raising solutions remain lacking—as educators take to Raleigh today in a teacher walkout.
- OHIO House and Senate leaders are pushing to include more income tax cuts in the upcoming budget—a more than decade-long tradition that has slashed investment in the Buckeye State.
- Members of OREGON’s joint legislative committee on student success tweaked and then advanced a proposal to raise $1 billion for school funding through a type of gross receipts tax on businesses. The changes helped allay what had been opposition from Oregon’s largest business group.
- SOUTH CAROLINA teachers are walking out today in protest of the legislature’s failure to adopt reforms such as improved education funding, teacher pay, and mental health services.
- A group of advocates in UTAH is aiming to put the question of a carbon tax to citizens in the state after the legislature has failed to act on similar proposals. The proposal is the first ballot initiative to be submitted to the state for the 2020 elections.
- Efforts to enact capital gains excise taxes in WASHINGTON did not succeed this year, but lawmakers did pass changes to their business and occupation tax and a tax on real estate transactions. The changes are projected to raise $800 million for mental health services, special education, and other state priorities.
What We’re Reading
- The Economic Policy Institute (EPI) has taken a central role in elucidating issues in our education system with good research and reliable data. Route Fifty covers an EPI report showing that people who go into teaching essentially take a 21 percent pay cut by doing so. And the Center on Budget and Policy Priorities blogs about another recent EPI paper revealing that the extent of the teacher shortage in the U.S. is even worse than most people realize.
- ITEP data were showcased in a recent New York Times article that narrows in on the impact of profitable corporations, like Amazon, paying $0 in corporate income tax while individuals and small businesses continue to struggle to get by in Northeast OHIO.
- Change from the top-down? The New York Times reports on “rich kid revolutionaries” taking a moral stand against income inequality.
- The PENNSYLVANIA Budget and Policy Center released an update of its Fair Share Tax Plan. The full proposal to help fix the state’s tax system and raise much-needed revenue is available here.
- COLORADO Fiscal Institute’s Carol Hedges explains what “de-brucing” is and why it’s so important for investments in K-12 public schools, state colleges and universities, and transportation projects in the Centennial State.
- Interested in following the fallout around the largest corporate subsidy ever awarded in state history? Lots of reporting around the WISCONSIN Foxconn deal this past week with The Wall Street Journal’s in-depth look and lawmakers talking renegotiation.
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
Deputy Executive Director
- Corporate Taxes
- Education Tax Breaks
- Federal Policy
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- Refundable Tax Credits
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