July 19, 2017
July 19, 2017
Tax and budget debates drag on in several states this week, as lawmakers continue to work in Alaska, Connecticut, Rhode Island, Pennsylvania, Texas, and Wisconsin. And a showdown is brewing in Kentucky between a regressive tax shift effort and a progressive tax reform plan. Be sure to also check out our “What We’re Reading” section for a historical perspective on federal tax reform, a podcast on lessons learned from Kansas and California, and more!
— Meg Wiehe, ITEP Deputy Director, @megwiehe
- Rhode Island‘s House Speaker and Senate President met yesterday to discuss ways to move forward and resolve the state’s budget impasse. The car tax phaseout, championed by House leadership, remains one of the sticking points.
- Connecticut state employees came to a new labor agreement early this week while also championing tax hikes on the wealthy. The list of concessions now moves to the Legislature for approval. The state’s budget vote was postponed, and is now set for the end of the month.
- Alaska lawmakers passed a deal over the weekend to end cash payments to oil companies. The state’s capital budget and long-term revenue solution remain incomplete.
- Pennsylvania legislators have returned to the capitol to revisit the state’s incomplete budget. Focus remains on expanding gambling, borrowing to keep the state afloat, and possibly privatizing the sale of wine and hard liquor.
- Wisconsin is 19 days into the new fiscal year without a budget. While Senate and Assembly Republicans attempt to find some common ground on transportation funding, the governor is keeping tabs on cumulative tax cut count and some democratic lawmakers are proposing legalizing and taxing marijuana as a possible resolution to the impasse. Meetings continue
- Among the twenty items on the agenda for the Texas special session that began yesterday, property tax reform is the number one issue in Gov. Abbott’s mind. Mayors from at least 18 cities are meeting with the governor to address concerns they have over restricted local control.
- Kentucky lawmakers made a pitch for a fair, flexible tax code by prefiling BR 15. Gov. Matt Bevin has been touting an overhaul of the state’s tax system – one that would likely include a shift toward regressive consumption taxes. On the other hand, ITEP data found BR15 would help correct the state’s upside-down tax system by lowering taxes, on average, for the bottom 60 percent of Kentuckians while asking more from the top.
- A new tax on bicycles in Oregon and the recently passed income tax in Seattle have been met with unrest by many in the northwest, including the Washington State Republican Party which has called for “nothing less than civil disobedience.”
- The Idaho Supreme Court ruled that the governor’s grocery tax veto was constitutional, meaning food will remain subject to the general sales tax rate despite recent legislative efforts to exempt it.
- A Utah coalition of business leaders aiming to raise $700 million in new revenues for public education is advancing a new proposed ballot initiative to increase the personal income and general sales tax rates by 0.5 percent.
- Business tax cuts have been driving down revenues in Mississippi, where total revenues declined in fiscal year 2015-16 and nearly declined in 2016-17, and more cuts enacted last year will begin taking effect in the coming years.
- As Nebraska tax revenues continue to come up short, lawmakers are tracking them closely to determine whether it will be necessary to hold a special session before they are scheduled to reconvene in January.
What We’re Reading…
- CNBC reports on what are being called some of the worst state budget crises since the Great Recession, including several states still without budgets weeks into the new fiscal year.
- In this Brookings “Intersections Podcast,” a team of experts discuss lessons from state tax experiments in Kansas and California, including discussion on attitudes towards paying taxes and ideology vs. empirical evidence on the relationship between taxes and economic growth.
- Marketwatch interviews ITEP’s Meg Weihe on why back-to-school sales tax holidays are more trouble than they’re worth.
- American Bar Foundation Executive Director and Researcher Ajay Mehrotra provides a historical perspective on federal tax reform, highlighting the role crisis has played in bringing about past transformational changes.
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