State Rundown 8/23: Tax and Effect

While a number of state tax laws are debated, approved, and vetoed in any given year, many go unnoticed. That wasn’t the case, however, when Massachusetts voters approved the Fair Share Amendment late last year, which is a 4 percent surcharge on those earning over $1 million. Much of the hand wringing from the opposition claimed that wealthy residents would leave the state in droves, but a comprehensive look at the decisions that affect people’s interstate moves, shows otherwise. What did happen, on the other hand, is that Massachusetts kids—from kindergarten to high school—will be able to focus their energy on learning, and not have to worry about (unconscionable/unrelated) matters like having enough money to afford breakfast or lunch. It was recently announced that free meals will be provided to children in schools in The Bay State as a result of the estimated $1 billion in revenue that the amendment will raise. In addition to the good news about school lunches, the state will also now offer free community college for students 25 and up and additional childcare slots for low-income families.

State Roundup

• There are a range of ballot initiatives that CALIFORNIA voters will be able to decide on in 2024, including two tax provisions. The tax measures include a proposed income tax hike of about 0.75% and a measure—backed by commercial real estate—which would further expand California’s already draconian (and complex) tax caps. Voters have seen measures similar to all nine before, and many of the measures are pushed by narrow special interests.
• Gov. JB Pritzker of ILLINOIS signed a bill establishing the Illinois Grocery Initiative which designates $20 million to help grocers open and expand locations in food deserts. Grocers who receive the grants will be eligible for tax exemptions on utilities, building materials, and other items impacting their cost of operation.
• MASSACHUSETTS announced that a portion of the revenue from the Fair Share Amendment (millionaire’s tax) will be used to provide free school lunches for K-12 students.
• MINNESOTA is reporting $564,000 in new tax revenue from its first month of cannabis legalization.
• Public school supporters gathering signatures in NEBRASKA are on track to put a question on the ballot next November giving voters a chance to override LB 753, which will funnel public tax dollars to private schools through scholarship tax credits if not repealed by voters. That bill passed earlier this year amid other costly tax cuts that will drive down funding available for public schools and other vital priorities.
• VIRGINIA Gov. Glenn Youngkin has indicated his support for one-time tax rebates proposed by General Assembly budget negotiators if there is an agreement to look at income tax rate cuts in the next two-year budget cycle. Budget negotiators reportedly reached an agreement on rebates of $200 for individual taxpayers and $400 for joint taxpayers. Gov. Youngkin’s original $1 billion tax cut proposal included permanent tax cuts to individual income tax and corporate tax rates but had reached an impasse between the Republican-led House and Democratic-led Senate.

What We’re Reading

• Brookings Metro’s Dr. Andre Perry summarizes how property tax policy and implementation penalizes Black people and widens the racial wealth tax. Highlighting the work of Prof. Dorothy Brown, the piece calls for a tax code that no longer privileges and protects white wealth while extracting Black wealth.
• The Atlanta Civic Circle writes how billions in expensive tax breaks and exploitation of cheap, non-union labor created “Hollywood South” in Georgia.
• A piece in Mother Jones highlights the impact state-level tax cuts have had on budgets in recent years, and calls attention to the special interests focused on keeping taxes low.

 

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