Berman & Company


BPAA News Brief - February 7, 2017

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Soda Taxes Start Popping up in Other States, Cities. Last month, public health advocates in Connecticut proposed a "menu of revenue options" to deal with the state's budget crisis, including a tax on soda and other sugary drinks that would generate an estimated $85 to $141 million. Proponents of a sugary drink tax in West Virginia want legislators to introduce a penny-per-ounce excise tax in order to raise $89 million in revenue. Santa Fe's 2-cents-per-ounce tax on sugary beverages will be heard in committee this week.

As Legislators in Pennsylvania Ask for Philly's Soda Tax to be Struck Down. A bipartisan group of three dozen state legislators has challenged the constitutionality of the recently-imposed sugary beverage tax in Philadelphia. These legislators feel it isn't a city's job to pass tax increases, and the tax has the potential to upend the state's budget (if more localities start setting taxes).

Update on the Illinois "Grand Bargain." The Illinois Senate has continued to negotiate the evolving tax package proposed early in this year's legislative session. According to the most recent reports (which will continue to change), the Grand Bargain still includes an expanded sales tax, but the tax rate would be lowered from 6.25 to 5.75. In addition, a special payroll-based tax seems to have been removed, along with a new amusement tax and a provision to increase the state's starting wage. Again, the elements of the package will continue to change, so those concerned about these provisions should pay close attention to updates from the Illinois State BPA.

Ohio Budget Proposal Includes an Alcohol Tax Hike, Avoids Sales Tax on Bowling: Governor John Kasich released his most recent budget proposal last week, and while it includes a reduction in the income tax, his spending package increases taxes on alcohol. The higher tax would amount to roughly a penny increase on a glass of wine or a can of beer, according to the state's Tax Commissioner. The budget proposal also increases the sales tax from 5.75 to 6.25 percent and expands it to cover some specific services (like lobbying, cable television, cosmetic surgery, lobbying, and others). In 2013, Gov. Kasich's budget included sales taxes on bowling, arcade games, and other amusements, but this year, those services are not affected.

Kansas Alcohol Tax Proposal Triggers Fear in Hospitality Industry. Last week, Kansas' House Taxation Committee heard from restaurant owners and others opposed to Governor Sam Brownback's proposal to increase alcohol taxes from 8 to 16 percent and raise cigarette taxes by a dollar a pack. The proposed tax package would potentially bring in $209.5 million (over two years) at a time when Kansas is in the middle of a significant budget crisis.

American Action Forum Predicts Significant Job Loss from Recent Wage Hikes. A Washington, DC, think tank reports that as many as 383,000 jobs will be lost in the 14 states (and the District of Columbia) that implemented wage hikes in 2017. American Action Forum, a right-of-center research organization, used previous research on the minimum wage to calculate the potential job loss and used current projections of job growth from state agencies. The research did not include the additional increases that will take place in 2018 and beyond.

Washington State Introduces a .05% BAC Bill. Two legislators – both former law enforcement professionals – have introduced legislation in the Washington House of Representatives that would lower the drunk driving arrest threshold from .08% blood alcohol concentration to .05. Utah and Hawaii have also introduced similar legislation that follows the National Transportation Safety Board's recommendation from 2015.

Scorecard on State Wage Debates. As of this week, both Wyoming and North Dakota have rejected potential increases to their state starting wage. The Nevada legislature convened its 4-month session this week, and with Democratic majorities in both houses, lawmakers introduced a bill that would raise the starting wage to $12 an hour in five steps (assuming the employer does not offer health insurance). Alabama lawmakers have introduced a starting wage proposal of $10 (that would also increase the wages for tipped employees to at least $3). Later this week, a Vermont House Committee will be holding a hearing on a proposal to raise the starting wage to $15 by 2020. Pennsylvania Governor Tom Wolf called for a $12 starting wage in his state budget proposal released this week. Iowa could consider two different wage bills; legislators in the House introduced a $10.75 wage by 2019, while the proposal in the Senate would raise the wage to $11 by 2020.

Judge Hears Arguments on Timing of Kansas City $15 Ballot Initiative. We reported last week that the Missouri Supreme Court ruled the question of whether to raise Kansas City's starting wage to $15 would be put to the voters. Now a county judge will hear arguments on whether the initiative will appear on the ballot in April or August. Supporters are pushing for the earlier date.

Baltimore City Council to Consider $15 Starting Wage. Baltimore may be the next city to implement a high wage rate, now that eight out of the fifteen-member city council members support a $15 starting wage. The city's mayor, Catherine Pugh, did not take a position, but instead asked the council to consider whether the proposal would limit job opportunities for those entering the workforce. (The proposal could pass with a simple majority, but supporters would need 12 council members to sustain a mayoral veto.) The council will hold a hearing on the bill at the beginning of next month.

More Faces of $15. American Apparel, a clothes retailer with multiple factories in Southern California, is starting to dismantle its operations, after financial struggles; according to business analysts, the high cost of manufacturing in the state – which will see a starting wage of $15 in 2021 – was among the factors in the business closing.

The Tempe (Arizona) Chamber of Commerce released a survey about the impact of the state's minimum wage ballot initiative that raised the starting wage to $10 on January 1 (and $12 by 2020). Of the respondents, 38% increased their prices as much as 10% and 32% cut hours (including a few that reported laying off employees).

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