Just Taxes Blog by ITEP

State Rundown 5/9: Special Sessions in the Air

May 9, 2024

This week, special sessions with major tax implications are in the air in Kansas, Nebraska, and West Virginia as additional pushes are made to move tax changes over the finish line. A special session in Virginia is set to kick-off this coming Monday.

A major court case was argued in California regarding the fate of a ballot initiative that would seriously undermine state and local authority to raise taxes or fees by requiring a two-thirds vote on any change. The measure could further complicate tax collections by being applied retroactively. Meanwhile, tax cuts have advanced in Colorado and Pennsylvania, although only the former appears likely to become law.

Major State Tax Proposals and Developments

  • The CALIFORNIA Supreme Court heard oral arguments on a ballot measure designed to sharply limit state and local governments’ authority to raise taxes and fees by making any change subject to a two-thirds popular vote. The sweeping measure would be retroactive and require several taxes that already received majority support from voters to be voted on again with a higher threshold. The justices appeared divided on the case, but open to waiting to rule until after the vote. – ELI BYERLY-DUKE
  • In the final days of the legislative session, COLORADO lawmakers approved a bill that cuts property taxes. The bill reduces valuations for residential and commercial property taxes and enacts a local revenue growth limit. Senate Bill 233 is expected to be signed into law by the governor. – MARCO GUZMAN
  • The Republican-controlled PENNSYLVANIA Senate approved a $3 billion tax cut plan that would cut income taxes and electric service taxes. The legislation would reduce the flat personal income tax rate from 3.07 percent to 2.8 percent and would eliminate the 4.4 percent gross receipts tax on the profits of electric utilities. While the legislation received support from eight Democrats, top Democrats said that it won’t pass the Democratic-controlled House.  – MILES TRINIDAD

State Roundup

  • The ALABAMA legislature sent a bill to Gov. Kay Ivey’s desk that would provide tax breaks to corporations providing childcare and certain childcare centers.
  • The ARKANSAS legislature has adjourned for the session after sending a budget to the governor. However, some legislators are already discussing a special session to debate measures regulating cryptocurrencies, and potentially other issues.
  • Gov. Kim Reynolds of IOWA signed legislation that increased the tax deduction allowed through contributions to Iowa’s 529 accounts.
  • ILLINOIS Gov. JB Pritzker reversed his position on adding services to the state sales tax base as the state explores ways to fund Chicago’s public transit. Adding services to the sales tax base could increase revenue by $1.1 to $1.9 billion a year.
  • The KANSAS legislature continues to urge Gov. Kelly to walk back her threat of a special session and sign a package of tax cuts mostly unchanged from the one she recently vetoed.
  • NEBRASKA Gov. Jim Pillen is touring the state in an attempt to build support for a special session to pass his plan to reduce property taxes by increasing and expanding the sales tax. This regressive tax shift could not get over the finish line during the regular legislative session. The fixation on property tax cuts has already cost Nebraskans in other ways, like keeping widely acknowledged child care needs unfunded.
  • A MISSOURI court ruled in favor of counties arguing that Missouri law permits both counties and cities to levy a 3 percent excise tax on the sale of cannabis. Firms had argued the law permitted only one local tax. The ruling will be appealed but is the first time a Missouri judge has weighed in on the issue.
  • SOUTH CAROLINA’s session ended today, and the tax policy highlights include: a bill on the governor’s desk that would eliminate the sales tax on feminine hygiene products and the defeat of a school voucher bill that would have expanded access to wealthy households.
  • WEST VIRGINIA continues to wait for Gov. Justice to formally call for a special session, but expectations are mounting and legislative leaders are already discussing changes to the state’s law authorizing automatic personal income tax cuts.

What We’re Reading

  • ITEP‘s Andrew Boardman weighs in on a proposal out of Massachusetts that aims to levy an additional transfer fee on commercial and residential sales above $1 million.
  • Route Fifty highlights the legislative efforts around the nation to cut property taxes this year. ITEP has also weighed in this issue with our report on how best to promote housing affordability by connecting policies to households’ ability to pay.
  • The Economic Policy Institute published an exhaustive report on the Southern economic development model, examining the many deliberately designed policies (tax policy included) that sought to prioritize and protect businesses at the expense of Black and brown citizens.
  • The State Innovation Exchange (SiX) released a report this week that digs in and makes the case for state taxes on investments gains.


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