Georgia

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.

As the COVID-19 pandemic continues to disrupt more and more aspects of life and cause greater and greater harms to public health and the economy, information is changing by the hour. State policymakers, if they are even able to convene, are wholly focused on how to respond to the crisis. The pandemic is certain to pose a series of fiscal challenges for states and their economies, and this week’s Rundown focuses on the most helpful resources and the latest state-by-state updates available.

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.

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…

State lawmakers have plenty to keep them busy on the tax policy front in 2020. Encouraging trends we’re watching this year include opportunities to enact and enhance refundable tax credits and increase the tax contributions of high-income households, each of which would improve tax equity and help to reduce income inequality.

State itemized deductions are generally patterned after federal law, though nearly every state makes significant changes to the menu of deductions available or the extent to which those deductions are allowed. This report summarizes the key details of each state’s itemized deduction policies and discusses various options for reforming those deductions with a focus on lessening their regressive impact and reducing their cost to state budgets.

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 […]

The last few years have brought major improvements in how states enforce their sales tax laws on purchases made over the Internet. Less than a decade ago, e-retailers almost never collected the sales taxes owed by their customers. The result was a multi-billion dollar drain on state coffers and a competitive disadvantage for local businesses. But this holiday season looks a bit different.

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…

Lawmakers in Michigan and New Hampshire made progress toward enacting their state budgets, though Michigan may yet end up in a government shutdown. Leaders in Wyoming advanced a proposal to create a limited tax on large corporations to raise some revenue and add a progressive element to their state’s tax code. Georgia agencies are forced to recommend their own funding cuts amid state income tax cuts. And business tax subsidies are looking particularly bad in Maryland, where subsidy money has been handed out without verification that companies were creating jobs, and New Jersey, where a false threat to leave the…

This report presents a comprehensive overview of anti-poverty tax policies, surveys tax policy decisions made in the states in 2019 and offers recommendations that every state should consider to help families rise out of poverty. States can jump start their anti-poverty efforts by enacting one or more of four proven and effective tax strategies to reduce the share of taxes paid by low- and moderate-income families: state Earned Income Tax Credits, property tax circuit breakers, targeted low-income credits, and child-related tax credits.

Lawmakers in many states have enacted “sales tax holidays” (16 states will hold them in 2019), to provide a temporary break on paying the tax on purchases of clothing, school supplies, and other items. While these holidays may seem to lessen the regressive impacts of the sales tax, their benefits are minimal. This policy brief looks at sales tax holidays as a tax reduction device.

Ohio now enjoys the distinction of being the 30th state to raise or reform its gas tax this decade, and the third state to do so this year, under a bill signed into law by Gov. Mike DeWine. While state tax policy can be a contentious topic, there has been a remarkable level of agreement on the gasoline tax. Increasingly, state lawmakers are deciding that outdated gas taxes need to be raised and reformed to fund infrastructure projects that are vital to their economies. These actions are helping reverse losses in gas tax purchasing power caused by rising construction costs…

The flawed design of federal and state gasoline taxes has made it exceedingly difficult to raise adequate funds to maintain the nation’s transportation infrastructure. Twenty-eight states and the federal government levy fixed-rate gas taxes where the tax rate does not change even when the cost of infrastructure materials rises or when drivers purchase more fuel-efficient vehicles and pay less in gas tax. The federal government’s 18.4-cent gas tax, for example, has not increased in over 25 years. Many states have waited a decade or more since last raising their own gas tax rates.

Like certain recent controversially concluded television shows, tax and budget debates can end in many ways and often receive mixed reviews. Illinois leaders, for example, ended on a cliffhanger by approving a historic constitutional amendment to create a graduated income tax in the state, whose ultimate conclusion will be crowdsourced by voters next November. Arizona’s fiscal finale fell flat with many observers due to corner-cutting on needed investments and a heavy focus on tax cuts. Texas legislators went for crowd-pleasing property tax cuts and school funding increases but left a gigantic “but how will we pay for this” plot hole…

Because of these reforms, more than 193 million people (or 59 percent of the U.S. population) now live in places where the state gas tax rate automatically varies over time.

Lawmakers in Illinois and Ohio have advanced major tax proposals but cannot rest just yet, as they must still get past the other legislative chamber. Their counterparts in Michigan, Minnesota, Nebraska, and Oregon, meanwhile, are all at impasses over education funding, as those in Texas left their school funding disagreement unresolved at least until they reconvene...in 2021. And in an era of many states pre-empting smaller jurisdictions by revoking local decision-making powers, leaders in Colorado and Delaware made moves in the opposite direction, entrusting cities and school districts with more local control.

Tax and budget debates are now mostly complete in Alabama, Arkansas, and Colorado, but just starting or just getting interesting in several other states. Delaware and Massachusetts lawmakers, for example, are looking at progressive income tax increases on wealthy households, and New Hampshire may use a progressive tax on capital gains to simultaneously improve its upside-down tax code and invest in education. Nebraska and Texas, on the other hand, are also looking to improve school funding but plan to do so on the backs of low- and middle-income families through regressive sales tax increases. Fiscal debates are heating up in…