Alaska

The COVID-19 pandemic continued this week to wreak havoc on lives and communities around the world. The fiscal fallout of the virus in the states is growing as well, and beginning this week to come into sharper focus. This week’s Rundown brings together what we know of that slowly clarifying picture and how states are responding so far.

States and families got good news this week as Congress came together to pass major aid to help during the COVID-19 coronavirus pandemic. But that bright spot came amid an onslaught of very difficult news about the public health crisis and the economic and fiscal fallout accompanying it. This week’s Rundown brings you the latest on these developments and state and local responses to them.

This week’s Rundown brings you the most useful reading and resources about how states are affected by and responding to the COVID-19 pandemic. These include: landing pages for the most up-to-date lists of state policy responses; ITEP’s own materials on state policy options and the federal response bills; insights on how a race-forward approach can improve these efforts at all levels; updates on state fiscal troubles and legislative postponements; and the developing picture of which states and communities could be affected more than others.

The COVID-19 novel coronavirus’s effects on public health and economies at all scales are creating a daunting situation for state budgets as well. Lawmakers can choose and prioritize their responses through a straightforward approach similar to that taken by health professionals: marshal and reinforce available resources, triage response options to prioritize the most vital services and most vulnerable people, and enact or strengthen the policies that will help address longer-term issues as well as immediate emergencies.

With all eyes on the potential effects of the oil price war and COVID-19 coronavirus on lives, communities, and economies, Georgia House lawmakers this week crammed through a regressive and costly tax cut for the rich with essentially no debate, information, or transparency. Most states are proceeding much more responsibly, assessing the ramifications for their service provision needs and revenues to fund those needs.

Trump administration officials have reportedly floated the idea of including tax breaks for the airline industry in its package of COVID-19-related stimulus proposals, which would allow airline companies to defer income taxes into the future. This is an odd policy choice since most of the biggest airlines are already using deferral to zero out most or all of their federal income taxes on billions of dollars in profits.

Excise and sales taxes on cannabis raised more than $1.9 billion in 2019. This represents a jump of nearly half a billion dollars, or 33 percent, compared to a year earlier. These are the findings of an ITEP analysis of newly released tax revenue data from the eight states where legal sales of adult-use cannabis took place last year. 

Alaska’s tax system underwent major changes in the 1970s when oil was found at Prudhoe Bay. Lawmakers repealed the state’s personal income tax (making Alaska the only state ever to do so) and began balancing the state’s budget primarily with oil tax and royalty revenue instead. But as oil prices and production levels have declined, a yawning gap has opened between state revenues and the cost of providing vital public services.

Wisconsin’s expansion of a capital gains tax break for high-income households represents a dark spot on this week’s state fiscal news, and the growing threat of COVID-19 is casting an ominous shadow over all of it, but otherwise the picture is pleasantly sunny, featuring small steps forward for sound, progressive tax policy. An initiative to create a graduated income tax in Illinois, for example, got a vote of confidence from a major ratings agency, while a similar effort went public in Michigan and two progressive income tax improvements were debated in Rhode Island. Gas tax updates made encouraging progress in…

This testimony explains the advantages of the cannabis tax structure proposed in Connecticut’s Senate Bill 16 and offers additional background information as well as ideas for potential changes to the bill.

This weekend’s Leap Day should be a welcome extra day for state lawmakers, advocates, and observers who care about tax and budget policy, as there is an overflow of proposals and information to digest. Most importantly, as emphasized in our “What We’re Reading” section, there are never enough days in a month to do justice to the importance of Black History Month and Black Futures Month. In state-specific debates, Oregon and Washington leaders are hoping to take a leap forward in raising funds for homelessness and housing affordability measures. Lawmakers in West Virginia and Wisconsin could use a day to…

We wrote earlier this week about Trends We’re Watching in 2020, and this week’s Rundown includes news on several of those trends. Maine lawmakers are considering a refundable credit for caregivers. Efforts to tax high-income households made news in Maryland, Oregon, and Washington. Grocery taxes are receiving scrutiny in Alabama, Idaho, and Tennessee. Tax cuts or shifts are being discussed in Arizona, Nebraska, and West Virginia. And Arizona, Maryland, and Nevada continue to seek funding solutions for K-12 education as Alaska and Virginia do the same for transportation infrastructure.

State tax and budget debates can turn on a dime sometimes, as in Utah this past week, where lawmakers unanimously repealed a tax package they had just approved in a special session last month. Delaware lawmakers are hoping to avoid the similarly abrupt end to their last effort to improve their Earned Income Tax Credit (EITC) by crafting a bill that Gov. John Carney will have no reason to unexpectedly veto as he did two years ago. But at other times, these debates just can’t change fast enough, as in New Hampshire and Virginia, where leaders are searching for revenue to address long-standing transportation needs, and in Hawaii, Nebraska, and North Carolina, where education funding issues remain painfully unresolved.

This week as Americans celebrate Martin Luther King Jr.’s messages of resisting oppression and fighting for progress, state policymakers can look to some bright spots where tax and budget debates are bending toward justice. Among those highlights, Hawaii leaders are considering improvements to minimum wage policy, early childhood education, and affordable housing; Kansas Gov. Laura Kelly is seeking to reduce sales taxes applied to food and restore the state’s grocery tax credit; and advocates in Connecticut and Maryland are pushing for meaningful progressive tax reforms.

State tax and budget debates have arrived in a big way, with proposals from every part of the country and everywhere on the spectrum from good to bad tax policy. Just look to ARIZONA for a microcosm of nationwide debates, where education advocates have a plan to raise progressive taxes for school needs, Gov. Doug […]

Happy New Year readers! The Rundown is back to our usual weekly schedule as state legislative sessions and governors’ budgets and State of the State Addresses begin in earnest. Here’s to clear-eyed 20-20 vision guiding state tax and budget decisions in 2020! So far this year, the harm of Colorado’s TABOR policy and Alaska’s lack of an income tax are coming into focus in big ways. Utah advocates are hoping the benefit of hindsight will help convince voters to overturn a recently enacted tax overhaul. Lawmakers in states including Iowa, Maryland, and Virginia can clearly see a need for revenues,…

Profitable Fortune 500 companies avoided $73.9 billion in taxes under the first year of the Trump-GOP tax law. The study includes financial filings by 379 Fortune 500 companies that were profitable in 2018; it excludes companies that reported a loss.

In the last few weeks, Florida Gov. Ron DeSantis has served up his budget proposal, which advocates are eager to dig into and hoping to contribute to with a delectable Earned Income Tax Credit proposal of their own. Utah lawmakers have been cooking up tax ideas as well, but haven’t yet decided when to come to the table to debate them. And Maryland leaders finalized their menu of needed education reforms, now moving on to assigning responsibilities for funding them. With respect to dividing up the pie, our “What We’re Reading” section below includes reporting on evidence that corporate tax…

As autumn brings a colorful display of foliage to many states, so too are tax proposals taking on interesting hues as states move from the summer off-season toward 2020 legislative sessions. Ohio lawmakers are blue in the face from debating and re-debating tax and budget issues there. Maryland residents again showed they can’t be called yellow-bellied when it comes to footing the bill for needed education improvements, showing their broad support for higher taxes to fund those needs even despite a hefty price tag. Alaska, Michigan, and other states are giving the green light to laws implementing their new ability…

Creative thinking from Pennsylvania lawmakers has helped them discover that the Wayfair ruling allowing states to collect sales tax from online retailers can also help them identify and tax corporate profits earned in their borders. Similarly, New York leaders had the vision to put bold environmental goals in place and identify a carbon price as a potential pay-for. Gubernatorial candidates in Mississippi and Kentucky showed less ingenuity, proposing tax cuts even though Mississippi is still phasing in a massive tax cut from a few years ago and Kentucky’s next election isn’t until 2020. Meanwhile, the old idea of eliminating income…