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BPAA Biweekly State Policy Updates - September 6, 2019

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LABOR & MINIMUM WAGE UPDATE

  • Ohio $15 minimum wage movement continues as employers adopt pay increases, supporters plan ballot issue: The push for a $15 minimum wage emerged here more than five years ago, often with protests outside fast-food restaurants, where hundreds of demonstrators demanded higher wages for workers. Many thought it a fledgling campaign that would soon fizzle. But what started on the fringes has influenced the mainstream. On this Labor Day, we look at the current status of the local $15 minimum wage movement, some of the opposition it still faces, as well as how the movement’s message may have played a role in getting some employers to increase their minimum wage. Read more at Cleveland.

 

  • Businesses wary of 2020 as confidence in CT legislators drops to all-time low: Despite improving sales growth last year, eight out of 10 Connecticut companies say the business climate here is declining, according to the latest annual survey from the state’s chief business lobby. The Connecticut Business and Industry Association also found 77% of businesses believe the state’s new paid Family and Medical Leave program will harm their companies and 53% say the rising minimum wage will do the same. Business confidence in state lawmakers plunged to an all-time low. The CBIA presented the results to an audience of about 280 people gathered Friday at the Hartford Marriott for the association’s annual forum on the Connecticut economy. “While Connecticut businesses are finding ways to survive and grow, their concerns for the future are clearly apparent in this survey,” Joseph F. Brennan, president and CEO of the CBIA, said Friday. But the survey, conducted by mail and email in June and July by Marcum LLP, an international accounting firm, had a relatively modest response. Marcum approached 5,300 top executives with the survey and 356 responded, giving the results a 5 % margin of error. Read more at CT Mirror.

 

  • Arizona Law Makes Cities Pay for Increasing Their Minimum Wage: Arizona cities and counties that raise their minimum wage above that of the state could be forced to cover the extra associated costs under a new law that goes into effect Aug. 27. Under the guidelines, part of House Bill 2756, officials will calculate how much money these local governments must reimburse the state. According to the Arizona Republic, when cities raise their minimum wage, the government ends up having to pay more for services in that area by increasing wages for government contractors. For example, House Appropriations Committee Chairwoman Regina Cobb (R-Kingman) told the Arizona Republic that the state received a request to increase funding for organizations that provide services to people with developmental disabilities after the city of Flagstaff raised its minimum wage. Arizona pays for these services, so the workers' higher minimum wage increased the state's costs. Read more at USNews.

 

  • Colorado weighs a major overhaul on overtime rules Something for Coloradans to ponder as they enjoy time off on Labor Day — they contribute more underpaid overtime than workers in any other state. Federal law requires workers to receive time-and-a-half pay when they put in more than 40 hours a week– unless they receive a salary of more than $455 a week and have executive, administrative, professional or sales duties. Doctors, lawyers and top executives are exempt. But so too are shift managers at hotels and restaurants, nonprofit staff, teachers and a host of other lower-paid workers on a salary. Nationally, underpaid overtime averages $1.29 an hour or $2,700 a year, according to an analysis from Joblist, a job search engine. In Colorado, it averages $2.34 an hour or $4,867 a year in lost wages, the highest average of any state.  “Although Colorado could be home to a hard-driving work culture where employees are happy to go above and beyond for their employers, it is likely a complex combination of economic and social factors that are contributing to this situation,” said Corie Colliton, a project manager at Joblist. Colorado workers clock 43.3 hours a week on average, the 10th-highest total in the survey. But they are also among the least likely to be entitled to overtime pay. Workers in Wyoming average 45 hours a week, the most in the country, but are covered by overtime rules at the third-highest rate. Of workers putting in more than 41 hours a week, 45.2% are entitled to overtime pay in Wyoming, while only 23% had that protection in Colorado, according to Joblist. What that seems to indicate is that Colorado employers are using the exemptions allowed them under state and federal law to avoid paying overtime at a level unseen in other states. Read more at The Denver Post

 

 
 

TAX UPDATE

  • Colorado Asks Court To Reconsider Ruling On State Tax Limits Colorado wants a federal court to reconsider a ruling that revived a legal challenge to the state's tax-and-spending limits. Attorney General Phil Weiser asked the 10th U.S. Circuit Court of Appeals Wednesday to review its decision that said 10 local governments have a right to challenge a Colorado constitutional amendment known as the Taxpayer Bill of Rights or TABOR. TABOR requires state and local governments to get voter approval to increase taxes and issue bonds. It requires governments to refund taxes in excess of annual limits. The lawsuit has zigzagged through the courts since 2011. A lower court ruled the local governments don't have legal standing to sue, but a three-judge panel of the appeals court reversed that ruling in a 2-1 decision. Weiser asked the full appeals court to reconsider. View the full article at KUNC.org

 

  • Murphy vetoes extension of corporate tax incentive program: Gov. Phil Murphy has been a loud critic of New Jersey’s tax incentives for corporations, and on Friday he sent those programs a stern message. The programs expired in June, and the Legislature passed a bill that it hoped would extend them by seven months. Murphy on Friday conditionally vetoed that bill, all but grinding the programs to a halt. “For the past six years, New Jersey has operated under a severely flawed tax incentive program that wasted taxpayer money on handouts to connected companies instead of creating jobs and economic growth,” said Murphy. “The program I’ve outlined in the conditional veto is one that creates good jobs and works for everyone, not just the connected few …” The governor has argued the state Economic Development Authority’s programs weren’t getting their money’s worth and their math didn’t add up. He said New Jersey paid out $162,000 in tax credits for every job created, compared to Massachusetts’s $22,000 per job. Read more at NJTVOnline.

 

  • Tax credit experts suggest NJ reduce business incentives: New Jersey's business tax credits amounted to twice the national average, and officials should consider reducing them, experts on Thursday told lawmakers considering overhauling the state's expired tax credit program. The Democrat-led Senate Select Committee on Economic Growth Strategies held its second meeting in the statehouse annex Thursday and heard from a half-dozen tax incentive experts. The hearings come after the state's business tax incentives, which were enacted in 2013, expired earlier this summer. Read more at NewsObserver.

 

Business tax incentives cost Nebraska over $200 million last year. Some legislators question them: Opinions appear as divided as ever over whether Nebraska’s business tax incentives are worth the millions of dollars they cost, judging by a legislative hearing on Thursday. Representatives from the Nebraska Department of Revenue were peppered with questions from state senators during an annual hearing to discuss the costs and benefits of incentive programs like the Nebraska Advantage Act, passed in 2005, and LB 775, enacted in 1987 amid fears that Omaha corporate giants like ConAgra and Union Pacific would flee the state. Last year, the state defrayed $206 million in taxes to companies that reported 2,489 new full-time-equivalent jobs. One set of statistics that raised eyebrows was a projection for 2019 that showed the state would see a $142 million net loss in tax revenue to create 1,169 “dynamic” jobs, which officials said were totally new positions created, not just an increase in hours for existing workers. Read more at World-Herald Bureau – Omaha.

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