TAX & BUDGET
- Kentucky Legislature Overrides Governor’s Veto: Matt Bevin vetoed the state's budget and revenue bills and signed a pension reform bill into law. Teachers rallied at the state capitol today to defy budget cuts and push to restore increases to education funding. As of Friday afternoon, the Kentucky House overrode the governor's veto. A move that will provide some additional funding for education, but at the cost of a highly regressive tax plan that will cut taxes for the wealthy and hike taxes for the other 95 percent.
- Iowa House lawmakers held a public hearing on Gov. Kim Reynolds's tax proposal Monday, April 9, and then replaced it with a substantially revised version that maintains the state's regressive tax deduction for federal income taxes paid, makes more modest personal income tax rate cuts, increases the state standard deduction, among other changes. The bill retains Gov. Reynolds's proposal to add a deduction for "pass-through" income equal to 25 percent of the new federal deduction. Senate leaders then offered their own plan that slashes taxes even deeper. Read more here about hot button issues that are still in play for the legislature as they head toward adjournment: https://bit.ly/2qNwkud
- Missouri: Tax cut debates recommenced in Missouri this week but it is unclear if anything will pass. The proposal working its way through the Senate stalled, largely due to its $126 million price tag, and the plan passed by the House would cost even more.
- Nebraska legislators were unable to reach agreement on a mix of property and income tax cuts this session, leading some to call for a special summer session and increasing the momentum for a ballot initiative that would create a $1 billion property tax credit – and a $1 billion hole in the state budget.
- Maryland's response to the federal tax bill is now final. Lawmakers used part of the revenue gain resulting from the federal tax cut to expand the Earned Income Tax Credit, increase the standard deduction, expand tax benefits for retired veterans and public safety employees, and cut taxes for multi-state corporations, while directing most of the money into K-12 education investments and the state Rainy Day Fund.
- Oregon Gov. Brown signed the bill decoupling state tax law from the new deduction for business pass-through income while calling for a special session in June to consider issuing a separate tax break for small businesses.
- Utah: The Salt Lake Tribune reports about the Utah legislature’s response to federal tax reform, “You could call it the 2018 Utah Child Tax — a new levy imposed not by an act of the Legislature, but the lack of one. And it could cost most Utah families hundreds more next year, even as overall tax burdens decline under federal tax reform. The 2018 Legislature approved a small income tax cut equal to a nickel on every $100 of income. That gave state lawmakers tax-cutting bragging rights heading into an election year even as it delivered only token tax relief to all but the state’s highest-paid residents. But the Legislature’s failure to address the impact of federal reforms on the state taxpayer exemption means that most Utah families will have a higher state tax bill in 2018. Larger families will get hit harder, while the childless benefit.”
New Jersey legislators passed a bill creating a workaround to the federal cap on state and local tax deductions, authorizing local jurisdictions to allow people to make fully deductible "donations" to new "charitable" funds instead of paying property taxes
Indiana: “Indiana teachers could strike despite laws, labor experts say” – As teacher strikes have spread across the country, several factors would determine if Indiana would follow, experts and union leaders say. Although state labor laws are written to deter strikes, the state is facing pressing issues in education including teacher shortages, dropping pay and a shift toward using property tax referendums to shore up local budgets. Teacher unions are watching strikes in other states, but have no definite plans and will watch how lawmakers address funding during the 2019 legislative session, they said.
New York: “Minimum wage hike impacting NY manufacturers more than retailers, polls find” – Manufacturers said an average of 20 percent of their workers received a pay boost they wouldn't have received otherwise because of the latest hourly wage increase, while only 9 percent of service-sector firms said the same, the Federal Reserve Bank of New York reported. New York State’s rising minimum wage is having a greater impact on factories than on retailers and other service firms, according to polls released Tuesday. The Federal Reserve Bank of New York found that more than six in 10 manufacturers have changed their decisions about hiring and compensation because of the latest minimum wage increase on Dec. 31. Only four in 10 service firms said they were affected. The hourly wage went from $10 per hour to $11 on the last day of 2017 in Nassau, Suffolk and Westchester counties. In New York City, the rate climbed to $12 or $13, depending on the employer’s size. In the rest of the state, the rate increased to $10.40. The minimum wage will increase annually until it reaches $15, under a deal struck by Gov. Andrew M. Cuomo and the state Legislature in 2016. The first increase occurred Dec. 31, 2016, and raised the Long island minimum wage from $9 to $10. The New York Fed, in a poll of about 100 manufacturers across the state this month, found slightly more were affected by the higher wage rate this year than in 2017. However, for about 100 service firms on Long Island, in New York City and the northern suburbs, also surveyed this month, the number saying they were impacted was 39 percent, down from 49 percent in March 2017
FOOD & BEVERAGE
- Kansas: “Beer sale law on alcohol content will change in 2019” – A new state law, passed by the 2017 Kansas Legislature, has taken one of the last locally controlled retail sectors, liquor stores, and opened the door to the large corporate sector. 12th Street Liquor co-owner Justin Schell is critical of the change. “Pushing for changes to our current liquor laws just so corporations can add just a few more products to their inventory at the expense of over 700 family-owned businesses in the state is nothing short of greedy,” Schell said. On April 1, 2019, convenience stores and supermarkets will be able to sell beer with an alcohol content up to 6 percent. In the past, convenience stores and supermarkets could only sell beer with an alcohol content up to 3.2 percent. People seeking stronger beer purchased it at local liquor stores. “Undoubtedly it will not be a positive change for our business,” Schell said. “This law has been pushed along the legal system by the wallets of big corporate businesses for some time now.” Uncork Kansas, a lobbying group for corporate retailers, has been pushing for changes to the state’s laws on alcoholic beverages. After previous attempts to change the law, last year the strong beer law passed the Kansas House of Representatives, 85-40, on April 6. The next day it passed the Senate, 27-11, and on April 18 then-Gov. Sam Brownback signed the bill into law.
Indiana: “Hoosier Nonprofits Concerned About Proposed SNAP Cuts” – The first look at cuts that could be coming to the Supplemental Nutrition Assistance Program, SNAP, have some Hoosiers worried. The House Farm Bill would change eligibility and work requirements for the food assistance program. The SNAP Works for Hoosiers campaign includes Feeding Indiana’s Hungry. Executive director Emily Weikert Bryant says the changes would have a negative impact. "It makes severe cuts to the SNAP program through some burdensome and unnecessary work time limits and restrictions on eligibility that will lengthen the lines at our pantries, food kitchens and other sites that serve hungry people," says Weikert Bryant. The group urges Indiana congressional delegation members to reject the proposal. Weikert Bryant says one change requires participants work or train for 20 hours a week, but shortens the time to comply to one month before they stop receiving benefits. "Punishing workers for being unemployed or underemployed by taking away their food assistance won’t help them find a better job, or find a job faster," says Weikert Bryant. Weikert Bryant says SNAP helps one in 10 Hoosiers.
- Florida: “Special Session gambling proposal sent to top Florida lawmakers” – Top Florida lawmakers are considering details of a gambling deal that could potentially pave the way for an agreement with the Seminole Tribe and a rare special legislative session at the end of April. Lawmakers have discussed reconvening for a two-day session to address unresolved gambling issues in the last weeks. Talks began when an agreement between the state and the tribe was about to expire. The end of the agreement meant that as of March 31 the tribe is no longer obligated to make monthly payments on about $300 million owed each year in exchange for gaming exclusivity rights. The tribe continues to make those monthly payments even though it is no longer required to do so, said Barry Richard, the tribe’s attorney. “The tribe is in no hurry to stop those payments because they depend on the state’s economy,” Richard said. Legislators raised concerns that the potential loss of that money could put the state budget in peril and wanted to iron out differences between the House and Senate after years of stalemate. Lawmakers tried to revive gambling discussions at the end of the 2018 legislative session as it would have meant billions of dollars in state revenue, but no compromise was reached. Pending issues relate to the expansion of the state’s gambling industry as well as allowing slot machines in counties where voters have approved them by referendum outside of Miami-Dade and Broward counties, which the tribe sees as a violation of its exclusivity rights. Another lingering issue concerns state regulation of designated player games.
Nevada: “Nevada Gaming Control Board Recommends Regulatory Changes for Drunks, Stoners, and Sports Bettors” – The Nevada Gaming Control Board (GCB) unanimously recommended changes to the state’s regulatory laws this week that would modify how casinos treat impaired patrons, as well as how out-of-state sportsbook customers cash their winnings. On Wednesday, the three-member panel endorsed revisions to Regulation 5, the “Operation of Gaming Establishments.” Subsection 5.011 “Grounds for Disciplinary Action” says casinos run the risk of incurring penalties should they fail to allow any activity “that is inimical to the public health, safety, morals, good order, and general welfare of the people of the State of Nevada.” Under the current regulation, “permitting persons who are visibly intoxicated to participate in a gaming activity” is grounds for punitive consequences. The GCB has suggested that wording be updated to persons “who are visibly impaired by alcohol or any other drug.” The slight modification is primarily the result of Nevada’s liberalized recreational marijuana market. Licensees could soon be forced to be on the lookout for not only individuals who have over-consumed alcohol, but also those under the influence of legal and illegal drugs. The Nevada Gaming Commission will now consider formally approving the measure.