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BPAA Biweekly State Policy Updates - January 25

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LABOR UPDATE:

  • Bill would raise Oklahoma’s minimum wage to $10.50: OKLAHOMA CITY – Oklahoma could be the next state in the region to raise its minimum wage, which now stands at $7.25 an hour. State Sen. George Young, D-Oklahoma City, is the author of Senate Bill 102, which would raise the state’s minimum wage to $10.50 an hour or to the federal minimum wage, whichever is greater. The federal minimum wage, which is $7.25 an hour, hasn’t been raised in nearly a decade. Read more here at The Journal Record.
    • Convincing the Republican majority in the House and Senate and the new Republican Governor, Kevin Stitt, to impose a higher minimum wage for Oklahoma businesses will be difficult for the bill’s proponents. For the past three years, Young has filed legislation raising the state's minimum wage. However, the bills have not received hearings in committees.
    • Opponents:
      • Jonathan Small, president of the Oklahoma Council of Public Affairs, a conservative-leaning think tank, said he’s concerned about the proposal. He said research has shown that raising minimum wages is not the best way to help the most vulnerable find work but instead hurts low-skilled and aging workers the most, he said.
        • “The reason for that is because typically companies that have employees that are being paid near the minimum wage, they’re faced with lower margins on a per entity basis,” he said. Oklahomans could see restaurants close, and other businesses could opt to replace human workers with less costly automated technology, he said.
        • In addition, Small said the state’s economy is recovering, but oil and gas prices are now declining. He said wages are rising and employers are voluntarily increasing pay. “The last thing we want to do is make it more difficult for people to find work by government arbitrarily setting wages that have no correlation to what’s going on in the market,” he said.
    • Supporters:
      • David Blatt, executive director of the Oklahoma Policy Institute, said a boost in pay for low-wage workers in Oklahoma is long overdue. He said the spending power of a $7.25 hourly wage has been significantly reduced since 2009, as the working poor face higher costs for health care and housing. The U.S. Department of Labor Bureau of Labor Statistics reports of the 901,000 workers paid hourly rates in Oklahoma in 2017, 12,000 earned exactly the prevailing federal minimum wage of $7.25 per hour, while 16,000 earned less.
      • Jimmy Curry, president of the labor union Oklahoma AFL-CIO, also came out in support of the bill.
  • Texas bill proposes $15 minimum wage: Texas' minimum wage would more than double to $15-an-hour under a plan now before the state House. Now, the minimum wage in Texas, established a decade ago, equals the federal minimum wage of $7.25 an hour. State Rep. Ron Reynolds (D-Missouri City) introduced House Bill 194 earlier this week. If passed, it would take effect Sept. 1.
    • Texas state Rep. Cody Harris (R-Palestine) told the Herald-Press Wednesday no minimum wage was needed. “I'm a free-market guy,” Harris said. “Anytime the government tries to dictate funds, I'm hesitant. The market will always bring us to the right place.” Harris said most businesses want to “do right” by their employees and pay them a fair wage.
      • “Employers need happy, productive employees to grow their businesses,” he said. “However, high-school kids still need jobs, and most are not qualified to earn $15-and-hour.”
      • Harris said he will not support Reynolds' bill. Read more here.
  • Here are the details on how $15 minimum wage will be implemented in New Jersey:
    • Hundreds of thousands of people would see their wages rise under the bill. The schedule for wage increases for most workers is as follows:
      • $10 on July 1
      • $11 on Jan. 1, 2020
      • $1 increase every subsequent Jan. 1 until reaching $15 in 2024
    • Wage increases would then be tied to the consumer price index for all urban wage earners and clerical workers, or CPI-W, taking effect on the first of every year
    • Starting in 2020, employers would be able to pay “training wages,” equal to at least 90 percent of the minimum wage, for the first 120 hours of work by people enrolled in a training program.
    • Key exceptions
      • Under the bill, a seasonal worker is defined as someone whose job falls only in the window of May 1 to Sep. 30, while a small employer is any business with five workers or fewer. The wage schedule for these people is more drawn out:
        • $10.30 on Jan. 1, 2020
        • $0.80 increase every subsequent Jan. 1 until reaching $14.30 in 2025
        • $0.70 increase, to $15, on Jan. 1, 2026
    • Wage increases would then be tied to the CPI-W, plus a little extra so that the minimum wage for these workers is the same as the first group by 2028
    • Read more here at NorthJersey.
  • New Mexico: $10 minimum wage bill advances in NM House: A step has been taken for the New Mexico minimum wage to be raised to $10 an hour. On Tuesday night, House Bill 31, which would implement a phased-in minimum wage increase as early as July, passed the House Labor, Veterans & Military Affairs Committee. It was sponsored by Rep. Miguel García, D-District 14. HB 31 would raise New Mexico's minimum wage from $7.50 an hour to $10 beginning July 1, $12 an hour by July 1, 2021 and include annual increases to adjust for cost of living by July 1, 2022. In addition to raising the annual minimum wage, HB 31 would eliminate the tip credit and allow tipped employees to earn the same minimum wage as non-tipped employees while retaining their earned tips. Raising the minimum wage is a priority for Gov. Michelle Lujan Grisham, who proposed a timeline of $10 an hour immediately and $12 an hour by July 1 at her State of the State address last week. The city of Albuquerque implemented a minimum wage of $9.20 an hour at the start of the year. Read more at the Albuquerque Business Journals.
  • Massachusetts Paid Family and Medical Leave: What Lies Ahead: The Massachusetts Family and Medical Leave law (MAFML) (M.G.L. ch. 175M), was enacted in 2018, imposing significant responsibilities on Massachusetts employers. The initial measures will take effect on July 1, 2019, and the rest will be phased in over the next few years. Read full story here at National Law Review.
  • Florida - Attorney John Morgan moves ahead with ballot drive to raise minimum wage to $15 an hour: After spearheading efforts to pass a 2016 constitutional amendment that broadly legalized medical marijuana, Orlando attorney John Morgan said Tuesday he is moving ahead with a ballot drive aimed at gradually raising Florida’s minimum wage to $15 an hour. Morgan said a group he leads has collected more than 120,000 petition signatures, far more than needed to trigger a Florida Supreme Court review of the proposed ballot wording. If the court approves the wording, backers of the proposal would ultimately need to submit 766,200 valid petition signatures to take the issue to voters in November 2020. Morgan, the head of the firm Morgan & Morgan, said increasing the minimum wage would give people the right to “work with dignity” as he pointed to vast income inequality. Read the full story here at Fox 35.

TAX UPDATE:

  • Bloomberg Tax - State of the States: Governors Push Diverse Tax Cuts, Hikes: Colorado’s governor wants to cut the individual income tax rate while Washington’s governor wants to target rich residents with a capital gains tax. The governor in West Virginia, meanwhile, aims to eliminate personal property taxes on all businesses. There is no consensus among state leaders this year—except that tax issues are key. Governors across the country are pushing out tax plans in their Inaugural and State of the State Addresses this year.
    • West Virginia Gov. Jim Justice has called on lawmakers to eliminate personal property taxes on businesses and social security income taxes on individuals.
    • California’s new governor has called for aligning state tax law with some of the changes in the 2017 federal tax law to fund the expansion of a credit for low-income individuals. Gov. Gavin Newsom (D) wants to use $1 billion garnered through the changes to help small businesses and ease the administrative confusion taxpayers face when state and federal rules differ.
    • Illinois Gov. J.B. Pritzker (D) offered few specifics on his promise of a “fair tax system” in his inaugural address Jan. 14, but he campaigned for a graduated tax regime that would permit Illinois to squeeze new revenue from wealthy residents and reduce obligations on low- and middle-income taxpayers. A graduated system could have important revenue implications for the state, which currently faces a $7.5 billion backlog of unpaid bills and unfunded pension liabilities of approximately $130 billion.
    • Reduce Colorado’s individual income tax rate and close tax loopholes for special interests, Gov. Jared Polis (D) urged state lawmakers in his State of the State remarks Jan. 10.
    • Wyoming Gov. Mark Gordon (R) made it clear in his first inaugural address Jan. 7 that he is going to stand by one of his campaign promises: No new taxes. Gordon’s State of the State Address Jan. 9 didn’t mention the word “taxes,” but he said he is “not interested in growing the size of government.”
    • New Mexico Gov. Michelle Lujan Grisham (D), who took office this month, released a $7.1 billion budget proposal Jan. 10 with recommendations to “level the playing field for and encourage New Mexico businesses.” That plan includes collecting taxes from online vendors and platforms as well as equalizing hospital taxation.
    • Maryland: Republican Gov. Larry Hogan’s priorities, announced Jan. 8, include:
      • The Small Business Relief Tax Credit Act Of 2019, which expands eligibility for the tax credit to small businesses that provide paid parental leave and doubles the available tax credit for businesses that provide both paid sick leave and parental leave, and
      • The More Opportunities for Marylanders Act of 2019, which extends a 10-year tax credit for each new job created by business that locates or expands on a Maryland Opportunity Zone. It also exempts specified fees and property taxes for these businesses.
    • In his Jan. 9 inaugural address, South Carolina Gov. Henry McMaster (R) said overhauling the state’s tax code was one of his top priorities.
    • Washington Gov. Jay Inslee (D) has proposed enacting a capital gains tax that would hit only the state’s wealthiest residents. Inslee told Bloomberg Tax Jan. 10 that in addition to raising needed revenue, a capital gains tax would be a step toward fixing the state’s tax structure that he called “the most unfair system in the United States.”
      • Inslee also wants to increase the business and occupation tax rate to 2.5 percent from 1.5 percent on services, including those provided by accountants, architects, consultants, and real estate agents.
    • New York Gov. Andrew M. Cuomo (D) is proposing an agenda to “ensure a progressive tax system” by maintaining the state’s current structure for personal income tax, extending a millionaire’s tax set to expire at the end of 2019, and making permanent a 2 percent statewide cap on local property taxes.

SPORTS BETTING

  • Sports Betting Bill Roundup: New Legislation Pops Up in Arizona, Hawaii:
    • Arizona sports betting bill: The first Arizona sports betting bill appeared on Wednesday. S 1158 would allow the state’s gaming tribes to offer land-based sports betting within their casinos — and elsewhere. Arizona currently has 16 federally recognized tribes which operate a total of 24 gambling facilities across the state. The Arizona Department of Gaming would oversee the industry and have some discretion over its implementation. Revenue would be taxed at a maximum rate of 6.75 percent, matching the Nevada sports betting rate next door.
    • Hawaii sports betting bill: The appetite for sports betting is expanding westward in 2019. Far, far westward. Hawaii is the newest and most unexpected addition to the tracker. Filed on Wednesday and pending introduction, H 1107 would create the Hawaii Sports Wagering Corporation. The bill charges the new agency with regulating and operating the Hawaii sports betting industry from top to bottom. Although Hawaii doesn’t have a lottery, the framework would be similar to that in Rhode Island and Delaware. Read more about it at Legal Sports Report.
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