State Rundown 7/25: Summertime Hits Different in Different States

State lawmakers will have a lot to discuss when they compare notes on how they spent their summer vacations this year. Councilmembers in D.C. turned in their final budget project and are awaiting a grade from Congress after getting an “incomplete” from Mayor Muriel Bowser. Legislators from Louisiana are finally free to relax after much speculation that they might be sent to a summer school special session on tax and constitution changes. And Nebraska lawmakers have just arrived at Gov. Jim Pillen’s tax camp special session with little clarity on the activities or when they’ll get to go home.

Major State Tax Proposals and Developments

• DISTRICT OF COLUMBIA Mayor Muriel Bowser returned the 2025 budget to the Council unsigned, noting that she disagreed with several tax provisions. Some of the tax changes in the budget include a refundable Child Tax Credit, a property tax increase on high-value residences, a payroll tax increase to fund paid family leave, and a sales tax increase. The budget is now with Congress, which has 30 days to review it. – MARCO GUZMAN
• Controversy already abounds in the tax-focused special session that began today in NEBRASKA. Legislators are irked that Gov. Jim Pillen gave them minimal notice of the timing and content of the session. And lawmakers and citizens alike are taking issue with the vague and shifting details of Gov. Pillen’s plan, the regressive nature of the proposed shift from property to sales taxes, the loss of local control over K-12 education, and the reported windfall Gov. Pillen himself will receive if his plan succeeds. Even national experts are pointing out problems with the proposal’s math. – DYLAN GRUNDMAN O’NEILL
• PENNSYLVANIA Gov. Josh Shapiro signed a law creating new registration fees for electric vehicles and plug-in hybrid electric vehicles. EV owners will pay a $200 fee in 2025 and $250 in 2026, then the fee will be tied to inflation. Plug-in hybrid EVs will pay 25 percent of the fee compared to fully electric vehicles. Lawmakers who supported the law say the new fees make EV and PHEV owners pay their fair share for road maintenance as they avoid taxes at the gas pump. – MILES TRINIDAD

State Roundup

• Supporters of a COLORADO property tax initiative that would revert changes from a 2023 property tax bill and cut the valuation for assessment of residential property to 5.7 percent of actual value have submitted signatures to appear on the November ballot. Another initiative, supported by the same group, would limit property tax revenue from increasing above 4 percent from the previous year.
• LOUISIANA lawmakers will not return to the capitol for a special session and constitutional convention on taxes this August after much debate. Lawmakers are considering reconvening later this year or early 2025 to do tax reform.
• An annual report by the MINNESOTA Lottery shows that despite raising tens of millions in revenue, the state lottery is a regressive revenue raiser.
• WASHINGTON State’s new Working Families Tax Credit – which is pathbreaking as a targeted credit for middle- and low-income families in a state with no income tax – is a great success so far, delivering about $117 million to more than 163,000 households. That is on pace with expected uptake of the credit but remains only about half of the households who could potentially qualify, so state officials and nonprofits are working to spread the word about this important program.

What We’re Reading

• ITEP’s Local Policy Analyst, Rita Jefferson, discusses the rising popularity of mansion taxes as a way to equitably raise state and local revenue in Route Fifty.
• The Los Angeles Times reviews global efforts to counterbalance declining revenues for media outlets by compelling technology platforms like Facebook and Google to compensate media companies. The article compares past efforts to current proposals in California. Given the mixed success of compelling payment between firms, the present bill in the Senate with a direct tax provides a more straightforward funding mechanism.

 

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