May 24, 2017
May 24, 2017
This week, Kansas lawmakers continued work on fixing the fiscal mess created by tax cuts in recent years, as legislators in Louisiana, Minnesota, Oklahoma, and West Virginia attempted to wrap up difficult budget negotiations before their sessions come to an end, and Delaware lawmakers advanced a corporate tax increase as one piece of a plan to close that state’s budget shortfall. Our “what we’re reading” section this week is also packed with articles about state and local effects of the Trump budget, new 50-state research on property taxes, and more.
— Meg Wiehe, ITEP Deputy Director, @megwiehe
- Negotiators in Kansas have agreed to a new tax package that would raise income tax rates on existing tax brackets, eliminate the LLC exemption, eliminate some sales tax exemptions, and raise the liquor tax. The bill will run first in the House today—on the 100th day of 100 scheduled days for the 2017 regular session.
- A special session is more likely in Louisiana as no tax solution has emerged to address the 2018 budget gap and time is running out. In the interim, the Senate is expected to release its budget plan on Memorial Day and the gas tax faces a high hurdle in getting supermajority support in the House.
- Unable to come to an agreement, lawmakers continue budget negotiations in both Oklahoma and West Virginia. The Oklahoma House passed a bill to increase the state’s gross productions tax, but negotiations over the a sales tax on motor vehicles and a cigarette cessation fee remain in limbo. “Tax reform” and revenue proposals from the West Virginia Senate and House remain at odds; today Gov. Jim Justice adds his latest budget proposal to the mix.
- Lawmakers in Minnesota worked over night to pass budget bills by a 7 a.m. deadline, but only got to two of six needed. Of the two bills passed, one was a tax package for $650 million in tax cuts, including breaks for Social Security income and tax credits for student loan debt.
- The Delaware House has passed an increase in the maximum corporate tax as one component of efforts to resolve the state’s budget shortfall through a mix of revenue increases and funding cuts.
- North Dakota residents are sorting through the effects of legislation passed this year that will reduce local property taxes in exchange for the state taking over certain county services. Advocates of property tax cuts in Nebraska have announced their intention to launch a petition drive for a constitutional amendment to be put before voters in 2018 if they cannot pass the amendment through the legislature by then, and now income tax cut proponents are following suit, saying they may do the same. Meanwhile Gov. Pete Ricketts reiterated his commitment to slashing taxes as well.
- The New Jersey Assembly continues to work on modernizing the state’s tax code to reflect the new economy, approving one bill to subject Airbnb and similar rentals to the same taxes as hotels and another to tax “daily fantasy sports.”
- New Mexico‘s Special Session began with an announcement by the Speaker of the House that the legislature won’t pass a tax overhaul plan supported by Gov. Martinez but instead focus just on restoring vetoed funding for Higher Education and the Legislature.
What We’re Reading…
- Route Fifty reports on aspects of the proposed Trump budget that would affect states and localities, including funding cuts for local services, Medicaid, and SNAP (food stamps).
- The Lincoln Institute of Land Policy has updated its indispensable report on property tax policy in all 50 states.
- According to Stateline, states are missing out on billions in sales tax revenues as more shoppers turn to the internet to buy goods but state laws fail to collect tax from these remote sales (with the exception of Amazon sales).
- A new paper in the Louisiana Law Review takes issue with regressive state and local taxes, noting that “it is perverse that taxation in each and every state exacerbates instead of ameliorates the nation’s burgeoning income inequality.” The author proposes a revenue-neutral federal tax credit to combat the regressive nature of state and local taxes that offsets 100 percent of state and local taxes for low-income families and decreases as incomes rise, eventually becoming a surcharge for those with very high incomes.
- Ohio Policy Matters reports on the state’s deduction on business income, which at $1 billion dollars is burning a hole in Ohio’s budget.
- The Commonwealth Institute has put out a handy overview of the many Virginia tax reform proposals being circulated.
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- Corporate Taxes
- Education Tax Breaks
- Federal Policy
- Personal Income Taxes
- Property Taxes
- Sales, Gas and Excise Taxes
- State Corporate Taxes
- State Policy
- Tax Analyses
- Tax Basics
- Tax Credits for Workers and Families
- Tax Credits for Workers and Families
- Tax Reform Debate