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State Policy Update - July 14

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Food and Beverage

Sugar / Soda Tax

  • A campaign on the health impacts from the consumption of sugary drinks has led to about a dozen areas around the nation instituting soft-drink taxes.  USA Today reports on the various areas that have implemented these taxes, the debate, and the challenges surrounding the tax.  “"Any business will be very concerned about a tax that discriminated against their own customers," said William Dermody, the American Beverage Association's vice president of policy. "This is the worst tax you can pass. It’s highly destructive."”
  • An Illinois appeals court upheld a temporary restraining order preventing Cook County’s sweetened beverage tax from taking effect.  “The Illinois Retail Merchants Association and several grocers say the tax is vague and unconstitutional…County President Toni Preckwinkle says the county respects the appellate court's decision and is prepared to defend the tax.”
  • The Massachusetts state legislature is considering legislation that would create a tiered excise tax on sugary drinks.  NACS reports that “while the proposal would levy a 24-cent tax on a 12-ounce can of soda, the burden would be steeper on powdered drink mixes because the tax would be applied on a per-ounce basis once the beverage is mixed.  Kevin Dietly, a consultant for the American Beverage Association, said that if the policy takes effect, the cost of a 4C Iced Tea mix would skyrocket to $17.92 for a product that typically costs $3.99.”

 

Labor

Minimum Wage

  • The University of Washington conducted a study on the impacts on Seattle’s minimum wage and published it through the National Bureau of Economic Research (NBER).  The study “evaluates the wage, employment, and hours effects of the first and second phase-in of the Seattle Minimum Wage Ordinance, which raised the minimum wage from $9.47 to $11 per hour in 2015 and to $13 per hour in 2016. Using a variety of methods to analyze employment in all sectors paying below a specified real hourly rate, we conclude that the second wage increase to $13 reduced hours worked in low-wage jobs by around 9 percent, while hourly wages in such jobs increased by around 3 percent. Consequently, total payroll fell for such jobs, implying that the minimum wage ordinance lowered low-wage employees’ earnings by an average of $125 per month in 2016. Evidence attributes more modest effects to the first wage increase. We estimate an effect of zero when analyzing employment in the restaurant industry at all wage levels, comparable to many prior studies.”
  • Following the University of Washington’s research on the impact of Seattle’s minimum wage, Bloomberg takes a look at the winners and losers of minimum wage and addresses reactions to UW’s study.  “One group of economists rushed out a study of their own — at the request of the Seattle mayor’s office, which was apparently concerned about the results of the Vigdor study — that found results more favorable to the high minimum wage.  One member of that group declared that the Vigdor study is “not credible.””
  • Several universities, including the University of Minnesota, are conducting studies about the impacts of an increase in the minimum wage for their city.  “The movement toward $15 hourly wage laws in the U.S. has caught the attention of University of Minnesota experts.  After Minneapolis passed an ordinance June 30 to bring the $15 minimum wage by 2024 and two recent studies evaluated Seattle’s climb to $15, several researchers and experts weighed in on what the change could mean for Minneapolis.”
  • In Maine, “a November referendum to raise both the regular and tipped minimum wages — $7.50 and $3.75, respectively — won with 55 percent of the vote. (It required a simple majority.) But almost immediately after the vote was tallied, tipped servers began to complain that the result would hurt their livelihoods.”  The Washington Post reports how servers actively campaigned to overturn the results of the referendum that raised servers’ hourly wages.  Many of them “feared the higher costs to owners would lead them to raise prices or cut shifts.  Then, in June 2017, Maine’s legislature passed a Republican measure that will go into effect in January 2018 that lowers the tipped wage down again. 

Paid Medical or Family Leave

  • In early July, Washington joined California, New Jersey, and Rhode Island in providing workers with paid family leave.  Washington’s law, paid through payroll taxes, provides paid time off for workers on medical or family leave beginning in 2020, including a family member’s serious health condition, the worker’s own serious health condition, a child’s birth or placement of a child, or a military exigency.  The new law offers workers 12 weeks of paid family leave.  In 2020, the law requires benefits be paid up to 50 percent of the individual’s salary, capped at 50 percent of the state average weekly wage. The benefits increase each year until 2023, ultimately reaching 67 percent of the individual’s salary, capped at 67 percent of the state’s average weekly wage.  New York and Washington, DC have passed paid family leave laws, but they have not yet taken effect.

 

Alcohol

Ignition Interlocks

  •  A new law in Georgia goes into effect on July 1 that requires some first-time DUI offenders to install an ignition interlock device in their vehicles.  
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