Just Taxes Blog by ITEP

State Rundown 9/15: It’s a Little Too Quiet…

September 15, 2021

.ITEP Staff

Though we can’t fault anyone for being distracted by the major stories of the day (Delta, catastrophic weather, the California recall, the met gala’s best-dressed list, or Nicki Minaj’s cousin’s poor friend) we at ITEP remain committed to keeping you up to date on what’s happening in the tax world around you…even if it’s been a little too quiet for our liking. The steady stream of better-than-expected revenue projections is leading states like Alabama to consider misguided tax plans (a trend we’re keeping an eye on). Elsewhere, lawmakers in New Mexico are considering increasing the tobacco tax, while gubernatorial candidates in Virginia debate the merits of eliminating the sales tax on groceries.

Major State Tax Proposals and Developments

  • The new trend of using state surpluses to justify advancing reckless tax-cutting proposals continues as ALABAMA state senators discuss eliminating taxes on defined contribution plans and increasing the standard deduction. — KAMOLIKA DAS

State Roundup

  • Voters in Little Rock, ARKANSAS, have rejected a sales tax increase that would have generated $53 million over the next 10 years. The money was to be spent on parks, community police officers, early childcare, ports, museums and other quality of life projects.
  • CALIFORNIA Gov. Gavin Newsom easily survived a recall attempt this week with 64 percent support from voters (based on 70 percent of votes counted), beating several opponents who called for regressive tax cuts or limitations.
  • MARYLAND‘s fight to tax digital advertising continues as the State Attorney General called on the US District Court to dismiss a lawsuit by a coalition of technology companies contesting the tax.
  • The MISSOURI Housing Development Commission has voted to speed up payouts of a low-income housing tax credit, despite a bipartisan group of lawmakers voicing skepticism over the program being the best use of public funds.
  • Tax refunds in MINNESOTA are going out to those who collected unemployment insurance.
  • Several lawmakers in NEW MEXICO signaled that they were open to “aggressive” and “hefty” increases to the state’s tobacco tax. The rate is currently $2 a pack.
  • As the VIRGINIA gubernatorial race shapes up, Republican candidate Glenn Youngkin and Former Governor Terry McAuliffe both discuss how to eliminate the state’s grocery tax.

What We’re Reading

  • A new blog by the WISCONSIN Budget Project shows how Wisconsin’s recent tax cuts largely benefit wealthy, white households.
  • The KENTUCKY Center for Economic Policy’s new analysis of the enhanced Child Tax Credit also captures the impact of the CTC through the words of Kentuckians whose lives have been impacted.
  • In her first blog post for ITEP, Neva Butkus notes why the recent Census data highlight the need for permanently expanding the Child Tax Credit, and offers more thoughts on how states can build on it to help lower poverty.
  • Girard Miller writes in Governing about how views of the pandemic-induced recession and the federal fiscal relief response have evolved among economists such as himself. Of note among his observations: the scale of state revenue shortfalls has not turned out as large as expected, states are generally spending the federal funds responsibly, and many of the states that experienced the worst shortfalls have been states without income taxes.


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