July 12, 2023
July 12, 2023
Most state legislatures have adjourned for 2023, and that means it’s a perfect time to look at the tax policy trends that have formed thus far. Luckily, ITEP’s Aidan Davis has already done the heavy lifting in a new blog where she chronicles the highs and lows of 2023. Davis notes that about one-third of states used their session to invest in people and communities through refundable credits (and a few revenue raising opportunities), while another third continued the trend of making permanent tax cuts that will hamper future budgets and offer the most benefits to the wealthiest residents. If you want to dig deeper into the positive reforms states have made on refundable credits, State Policy Analyst Neva Butkus has you covered with a blog that provides helpful charts and details on the specific changes made so far. And if you want to look ahead to a key tax policy issue that is sure to pop up again, Senior Fellow Matt Gardner highlights the fight to enact corporate tax reform in Minnesota and the turning tide on corporate tax avoidance.
Major State Tax Proposals and Developments
- MAINE Gov. Janet Mills signed the state budget, which includes making the Dependent Exemption Tax Credit refundable, establishes a paid family medical leave program (funded by a payroll tax of up to 1 percent), and increases the income tax pension deduction. – MARCO GUZMAN
- Leaders in TEXAS have agreed on proposed legislation that would provide an $18 billion property tax cut. The bill would allocate $12 billion to reduce the school property tax rate, increase the school property homestead exemption to $100,000, provide a 20 percent circuit breaker for properties valued at $5 million or less, and cut the franchise tax. – BRAKEYSHIA SAMMS
- Newly elected Mayor Brandon Johnson of Chicago, ILLINOIS is proposing a new real estate transfer tax to help fund mental health services and combat homelessness.
- MISSOURI Gov. Mike Parson signed a $309 million tax cut removing the means test from exempting Social Security income and permitting counties to freeze property taxes for those 62 and over.
- After the VIRGINIA General Assembly budget negotiations failed to include Gov. Glenn Youngkin’s proposed $1.3 billion in tax cuts. Youngkin continues to express the possibility of calling a special session depending on the results of the state’s financial report for June.
- Milwaukee, WISCONSIN’s Common Council passed a 2 percent city sales tax to avoid a budget crisis. Wisconsin Gov. Tony Evers recently signed legislation that allowed the municipality to vote on a local sales tax rate.
What We’re Reading
- The West Virginia Budget and Policy Center’s deep dive into slowing revenues highlights the perils of using temporary surpluses to justify permanent tax cuts. With falling revenues and deep tax cuts, the state is facing austerity that will hurt the most vulnerable.
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 Aidan Davis at [email protected]. Click here to sign up to receive the Rundown via email.