Georgia

Warming temperatures in many parts of the country this week seem to be thawing out state fiscal debates as well. Multiple states including California, Colorado, Maryland, and New Jersey saw movement on efforts to improve tax credits for low- and middle-income families. Mississippi House lawmakers suddenly rushed through a dangerous bill to eliminate the state’s income tax and shift those taxes onto lower-income households. Montana senators also approved regressive income tax cuts and South Dakota legislators advanced an anti-tax constitutional amendment, while lawmakers in Hawaii, Rhode Island, and Washington made progress on improving the progressivity of their tax codes. Gas…

10,000 days. More than 27 years. By next Tuesday that’s how long it will have been since the federal government last raised the gas tax. Over that time, vehicle fuel efficiency has improved by 25 percent and construction costs have grown 185 percent. And yet the federal gas tax has remained frozen at 18.3 cents per gallon, with its purchasing power shrinking by the day. The federal government has never gone this long without updating the nation’s gas tax rate.

Efforts to deliver and improve targeted tax credits to support low- and middle-income families proved to be unifying in Washington and Oregon, welcome developments in an otherwise divisive week in state tax debates. For example, Mississippi advocates hoping to end the state’s regressive grocery tax are up against a governor and many lawmakers pulling in the opposite direction by trying to eliminate its income tax. After Arizona residents approved an income tax increase to improve education funding, policymakers there are seeking to reverse course by slashing taxes instead. And North Dakota lawmakers are considering converting their graduated income tax into…

You won’t find any images of Bernie Sanders and his mittens photoshopped into this week’s Rundown, but you will find the latest news on state fiscal debates, including proposals to generate needed funding by raising taxes on high-income households and profiting businesses in California, Delaware, Hawaii, Maryland, and Washington, as well as misguided efforts to slash taxes in Arizona, Iowa, South Carolina, Utah, and West Virginia. Also in the news are thoughtful improvements to targeted tax credits for families in need in Connecticut and Maryland, harmful obstacles to revenue generation proposed in Nebraska and Wyoming, and renewed hope on the…

As states kick off their 2021 legislative sessions, it’s clear that many governors and lawmakers are attempting to “take a mulligan” on the last year and recycle tax-slashing ideas that were already bad in 2020 and are even worse now as states try to recover from the Covid-19 pandemic and accompanying downturn...On a brighter note, Illinois leaders showed they did learn from the events of 2020, passing a major criminal justice reform bill and payday loan protections intended to reduce racial inequities.

With the victory of Senators-elect Raphael Warnock and Jon Ossoff in Georgia, Democrats now control all three branches of government. New leaders should seize this moment to create a tax code that does much more to reduce inequality and to resource long-overdue investments in climate, health, education and other essentials. Most immediately, the historic election shifts power, making it easier to deliver on the promise to increase the recently enacted $600 cash payments to $2,000 per person.

State lawmakers around the nation are already looking well past the upcoming election to the legislative debates they’ll be cooking up in 2021. In Iowa and Nebraska, anti-tax groups are thawing out regressive tax shift ideas they had put on ice earlier in the pandemic. In Delaware, a lawsuit and recent settlement have put educational and property tax inequities on the menu for the upcoming session. Meanwhile New Jersey and New York are both looking to add stock to their revenue mixes with progressive taxes on stock trades.

The biggest news for state and local fiscal debates this week was that federal fiscal relief to help with their pandemic-induced revenue crises is effectively off the table for at least another month. But if there is a silver lining to this federal inaction, it may be that it coincides with New Jersey’s success filling part of its own revenue shortfall through a millionaires tax, as well as with prominent wealth managers admitting that their rich clients don’t flee to other states in response to such taxes (see “What We’re Reading”). Combined, these three developments could encourage state leaders elsewhere…

Readers may want to start with our “What We’re Reading” section this week, which is full of good reading on how progressive taxation is needed to fund vital public services, helpful for state and local economic growth, and popular among voters as well. In that spirit, leaders in both New Jersey and New York are looking at small taxes on stock trades to help improve their budgets and tax codes. These last couple of weeks have also featured more state fiscal action than is typical this time of year, for example in North Carolina, where lawmakers decided to use federal…

Voters could significantly change the tax landscape through ballot measures this November regarding oil taxes in Alaska and a high-income surcharge for education funding in Arizona. Legislators are doing their part to bring progressive tax ideas to the fore as well, including a possible wealth tax in California, a millionaires tax in New Jersey, and a pied-a-terre proposal in New York. And Nebraska lawmakers reached a property tax and business tax subsidy compromise before closing out their session, but did not identify progressive revenue sources to fund it and will likely be back at the bargaining table before long.

Even in statehouses, many eyes remained on Congress and President Trump this week as state lawmakers advocated for needed federal fiscal relief and debated whether they can afford to join in on the president’s executive order requiring states to partially fund a new version of enhanced unemployment benefits that have otherwise expired.

During the Great Recession, the most ambitious state revenue-raising efforts closed just 10 percent of shortfalls and most states relied heavily on federal aid and budget cuts to balance their budgets. Of course, states can and should turn to progressive revenue-raising options now, but as the pandemic rages on, the extent of this crisis will become too significant for states and localities to handle on their own. The federal government should step in to help.  

As many of the country’s major professional sports leagues attempt to return to action amid concerns that the pandemic will find a way to ruin even the best-laid plans, state legislatures find themselves in a similar boat. Lawmakers would normally be enjoying their summer breaks at this time of year, but instead are returning to work in special sessions surrounded by plexiglass and uncertainty. Read on for information on ongoing sessions in states including California, Massachusetts, and Nebraska, as well as upcoming sessions in Missouri and Oregon.

Lawmakers in many states have enacted “sales tax holidays” (16 states will hold them in 2020) to provide a temporary break on paying the tax on purchases of clothing, school supplies, and other items. These holidays may seem to lessen the regressive impacts of the sales tax, but their benefits are minimal while their downsides are significant—and amplified in the context of the COVID-19 pandemic. This policy brief looks at sales tax holidays as a tax reduction device.

With tax day finally coming at the federal level and in many states this week, policymakers in Nevada and New Jersey began to talk about revenue solutions to their revenue shortfalls, even if they fell well short of wholeheartedly backing needed reforms. Like their counterparts in most states, they remain primarily focused on temporary solutions to their short-term emergencies. Still, advocates in these and other states continue to push for more fundamental fixes to their inadequate and upside-down tax codes, including a new campaign for better tax policy in Massachusetts and efforts to rein in tax subsidies and loopholes in…

July 1—the start of the new fiscal year in most states—typically marks a point when one can take a step back and reflect on the wins and disappointments of the past state legislative sessions. 2020 is markedly different. Nationwide business closures and stay-at-home orders in response to COVID-19 have led to unprecedented spikes in unemployment, decreased demand for consumer spending, and increased demand for vital public services. As a result, states face incredibly uncertain financial futures with little clarity regarding how their tax collections will fare over the next year.

State policymakers this week took a variety of approaches to their fiscal situations amid the COVID-19 pandemic. Tennessee lawmakers chose to balance their budget through $1.5 billion in cuts to public services, but not before adding to those cuts by going forward with planned tax cuts. California legislators also passed a budget but relied on a number of temporary measures and delays to do so. Their counterparts in Massachusetts, New Jersey, and Rhode Island opted for interim budgets to tide them over for a few months while they continue to look for lasting solutions. Meanwhile, many states are debating whether…

Despite uncertainty all around the nation, a few states passed budgets this week and many more are negotiating to enact theirs before fiscal years close at the end of June. Colorado notably pared back some of its own tax breaks and limited the potential damage on its budget from new federal breaks. California also passed a budget but few in the state actually think the dealing is done. Iowa quietly enacted its budget too, though advocates in the state are making noise about non-fiscal bills that were added late in the game.

As calls to defund the police demonstrate, state and local decisions about funding priorities and how those funds are raised are deeply embedded in racial justice issues. Tax justice is also a key component in advancing racial justice. Racial wealth disparities are the result of countless historic inequities and tax policy choices are certainly among […]

This week the immense scale and uneven distribution of economic and health damage from the COVID-19 pandemic continued to come into focus, hand in hand with greater clarity around pandemic-related revenue losses threatening state and local revenues and the priorities—such as health care, education, and public safety—they fund. Officials in many states, including Ohio and Tennessee, nonetheless rushed to declare their unwillingness to be part of any solution that includes raising the tax contributions of their highest-income residents. On the brighter side, some leaders are willing to do just that, for example through progressive tax increases proposed in New York…

State lawmakers are starting to use fiscal policy levers to address the COVID-19 pandemic, but the actions vary greatly and are just a start. Mississippi, for example, is one state still clarifying who has authority to determine how federal aid dollars are spent. Colorado, Georgia, Missouri, and Ohio are among the many states identifying painful funding cuts they will likely make to shared priorities like health care. The Louisiana House and the Minnesota Senate each advanced tax cuts and credits that could dig their budget holes even deeper. Connecticut leaders are looking at one of the more comprehensive packages, which…

In different ways, Earth Day and the COVID-19 pandemic convey a similar lesson: people around the world face shared struggles and disparate impacts, which they must work together to overcome through both emergency action and systemic change. In keeping with that lesson, state fiscal policy news this week was strikingly similar around the country, as states take account of the major threat posed by the pandemic to their budgets and attempt to grapple with its disproportionate impacts on communities of color and low-income families.

April 15 is traditionally the day federal and state income taxes are due, but like so much else, Tax Day is on hold for the time being. Meanwhile the pandemic’s disastrous and uneven effects on communities and shared institutions are decidedly not suspended. But nor are the efforts of individuals, advocates, and policymakers to develop solutions to respond to the immediate crisis while also building better systems going forward. ITEP’s recommendations for state tax policy responses are now available here, and this week’s Rundown includes experiences and perspectives on paths forward from around the country.