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BPAA State Policy Update - July 23, 2021

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COVID-19 Updates and Tracking



Vaccinations: Follow the links here to see a state-by-state guide on vaccination rollout and regulations.


Unemployment Benefits


  • U.S. Unemployment Benefit Rolls Shrink as States Exit Pandemic Programs The number of Americans receiving jobless payments fell this month to the lowest level since early in the coronavirus pandemic, but first-time applications rose as supply constraints persist in the auto industry. Continuing payments made through all unemployment benefit programs fell by 1.3 million in the week ended July 3, to 12.6 million, the Labor Department said Thursday. That was the lowest level since late March 2020, when new programs responding to the pandemic first came online. In recent weeks about half of states have acted to end enhanced and extended unemployment benefits. The end of pandemic programs in Texas drove the latest decrease. See the chart here at the Wall Street Journal.


  • Indiana files formal appeal in federal pandemic unemployment case The state of Indiana formally filed its appeal this week in its case involving federal pandemic unemployment benefits. In its appeal, the state said a Marion County judge abused his discretion in ordering the state to reinstate the federal programs while the lawsuit works its way through the courts. The appeal, which lists Gov. Eric Holcomb and Department of Workforce Development Commissioner Fred Payne as appellant-defendants, argued that Indiana is not required to participate in the federal CARES Act unemployment programs. Holcomb, the appeal argued, can withdraw Indiana from the program at his discretion. Read more here.


  • Pennsylvania tries to crack down on unemployment fraud Employers struggling to keep up with unemployment fraud cases hope new precautions will cut down on scammers placing fake claims in workers' names. Unemployment benefits fraud has been on the rise since Pennsylvania launched a new unemployment system in June. Read more here.


  • Judge orders Maryland to keep expanded unemployment benefits in place; Hogan won’t challenge decision A Baltimore judge on Tuesday blocked Gov. Larry Hogan’s attempt to end enhanced federal unemployment benefits early for tens of thousands of jobless Marylanders. The preliminary injunction, issued by Baltimore City Circuit Judge Lawrence Fletcher-Hill, comes in a pair of lawsuits filed by out-of-work state residents who challenged Hogan’s decision to opt out of the pandemic-related programs. Read more at the Baltimore Sun.


  • Arizona Gov. Doug Ducey taps federal cash to boost unemployment fund Arizona Gov. Doug Ducey on Monday tapped into a pot of emergency federal cash to refill the state unemployment insurance trust fund, bringing it above the level it was before the pandemic hit in March 2020 and nearly erased the fund’s balance. The move by the Republican governor is designed to prevent insurance premiums paid by businesses from soaring. And it came on the same week that an extra $300 per week in pay for unemployed workers will stop under a Ducey order designed to force people to return to work. Read more here.


Workers Are Suing States For Cutting Off Expanded Unemployment Benefits This summer, 26 states are cutting off access to pandemic unemployment benefits that were extended by the American Rescue Plan Act (ARPA). But some people may get their benefits back, even if just for a few weeks. Several lawsuits claim that states have a duty to provide federal aid to their residents. So far, suits have been filed in Indiana, Maryland, Ohio, Oklahoma and Texas, and benefits have been temporarily reinstated in Indiana and Maryland. Read more at Forbes.


Tax Updates


  • Some states now offer certain business owners a workaround for cap on state and local tax deduction A growing number of states are offering pass-through business owners a workaround for the $10,000 federal deduction limit for state and local taxes, known as SALT. A controversial part of Republicans’ 2017 tax overhaul, the SALT write-off cap is costly for filers who itemize deductions and can’t claim more than $10,000 for property and state income taxes. The limit has been a burden to those in high-tax states, such as California, New Jersey and New York. While there has been a push to repeal the law, President Joe Biden hasn’t included the measure in his proposals.
  • More than a dozen states have passed legislation to approve the workaround, including Alabama, Arkansas, Arizona, California, Colorado, Connecticut, Georgia, Idaho, Louisiana, Maryland, Minnesota, New Jersey, New York, Oklahoma, Rhode Island, South Carolina and Wisconsin, according to the American Institute of CPAs.
  • There is pending legislation in Illinois, Massachusetts, Michigan, North Carolina, Oregon and Pennsylvania, AICPA said. Read more.


  • Arkansas Attorney General proposes eliminating state income tax by 2030 LITTLE ROCK, Ark. (TB&P) — Attorney General Leslie Rutledge, Republican candidate for Arkansas governor, announced Thursday she would lead a constitutional amendment campaign to abolish the state income tax for individuals. Calling it the “first phase of her economic initiative,” she said, “the Rutledge Plan is a grassroots effort to put a constitutional amendment on the ballot to permanently eliminate Arkansas’ personal income tax.” Read more here.


  • North Carolina Considers Corporate Income Tax Repeal and Individual Income Tax Relief Eleven states have enacted laws this year to reduce income tax rates, in most cases paired with other structurally sound tax reforms. If North Carolina state senators get their way, their state will be the twelfth—and perhaps the most significant to date.
  • On June 10, 2021, the North Carolina Senate passed House Bill 334 with their own amendments. As amended, the bill would phase out the corporate income tax, reduce the individual income tax rate, increase the standard deduction and child deduction, and simplify the franchise tax base, among other changes. If enacted as-is, once the changes are fully implemented, North Carolina’s already competitive ranking on the State Business Climate Index—a measure of states’ tax structure—would improve from 10th to 5th overall, making it the best-ranked among states that levy an individual income tax.

Read the full analysis here.


Labor Updates


  • Connecticut Minimum Wage to Increase to $13/hour on August 1, 2021 As we first blogged on May 17, 2019, the Connecticut state hourly minimum wage will increase on August 1, 2021 from $12.00 to $13.00. The change, made pursuant to Public Act 19-4, “An Act Increasing the Minimum Fair Wage,” will be the third of five scheduled annual increases to Connecticut’s hourly minimum wage since 2019. A breakdown of the remaining increases under the Act is as follows:
  • $13.00 on August 1, 2021;
  • $14.00 on July 1, 2022; and
  • $15 on June 1, 2023.
  • Read more at JDSupra.


  • New Hampshire Adopts Paid Leave Program New Hampshire has joined eight states and the District of Columbia when, on June 24, 2021, the New Hampshire Legislature passed a two-year state budget that includes a paid leave program. Governor Chris Sununu signed the budget on June 25, 2021, and coverage must be provided by January 1, 2023. The voluntary program, called the Granite State Paid Family Leave Plan, provides New Hampshire workers with 60 percent wage replacement for up to six weeks of work per year if they take time off for personal health or family reasons. Read more at National Law Review.


  • Amid Pennsylvania minimum wage debate, a push to boost rate of $2.83 an hour for tipped workers Across the Lehigh Valley and the state, hiring signs offer pay well over the much-discussed minimum wage of $7.25 an hour, even as the set “wage” for plenty of people is a good bit less — $2.83 an hour — because they also collect tips. Those people being paid “tipped minimum wage” are on the mind of Sen. Christine Tartaglione, D-Philadelphia, who has filed bills to make changes. But while there is broad support for raising the tipped minimum wage — often paid to restaurant servers and other food service industry employees — the question is by how much, and should there even be a separate tipped wage in the first place? Read more here.


  • Delaware Set to Increase Minimum Wage to $15 by 2025 On July 19, 2021, Delaware Governor John Carney signed legislation that will gradually increase the state’s minimum wage to $15 per hour by 2025. This is a substantial increase from Delaware’s current minimum wage of $9.25 per hour. The minimum wage requirements apply to all employers who employ individuals in the state.
  • Following the examples set by neighboring Maryland and New Jersey, Delaware’s minimum wage increase will occur in phases. Effective January 1, 2022, the minimum wage will increase to $10.50 per hour. Thereafter, the minimum wage will increase annually on the following schedule:
  • Effective January 1, 2023 – $11.75 per hour;
  • Effective January 1, 2024 – $13.25 per hour; and
  • Effective January 1, 2025 – $15 per hour.
  • Read more at JDSupra.


  • Tracking 2021 state restaurant aid: Ohio, New Jersey launch grant programs Pandemic restrictions are easing around the country and diner demand is flourishing, but many operators are still struggling to make up for lost revenue. After the Restaurant Revitalization Fund closed, the National Restaurant Association urged states to establish local grant funds to support restaurants now that federal aid — at least temporarily — is off the table. Financial safety nets are even more crucial in the wake of the Small Business Administration's revocation of grant approvals for thousands of restaurants. Read more at Restaurant Dive.


  • Wyoming focusing remaining CARES dollars on business tax relief Wyoming’s plans for more than $1 billion in federal recovery funds related to the COVID-19 pandemic took on more definition Monday with an emphasis on tax relief for businesses. Multiple pieces of federal legislation have amounted to more than $8 billion in COVID-19 relief for Wyoming. The lion’s share of that money was in the form of direct payments to individuals, with the second largest in direct aid to businesses. Read more here.


Still no answer for Massachusetts businesses forced to shoulder $7 billion in pandemic unemployment costs Business groups are accusing lawmakers of turning a blind eye to the festering insolvency of the state’s unemployment trust fund and saddling the debt on businesses rather than paying it down with the billions in federal aid and excess tax dollars at the state’s disposal. Read more here.


Political Updates


  • MD GOV: Former RNC Chairman Michael Steele “created an exploratory committee ahead of a possible run for governor in 2022.” Republican strategist Jim Dornan, who is “is leading Steele’s exploratory effort” said Steele, who previously served as lieutenant governor, “expects to decide whether to run sometime between Labor Day and Thanksgiving.” See here at Maryland Matters.


  • On Virginia Governor Race: Democrats Test Midterm Strategy in Virginia Governor’s Race Virginia gubernatorial candidate Terry McAuliffe is bringing President Joe Biden to the vote-rich suburbs Friday as he works to keep a national focus in the race and tie his Republican opponent to former President Donald Trump. The visit likely signals a test run of the Democrats’ midterm strategy of highlighting national successes and rallying loyal voters. McAuliffe has kept the focus on links between his opponent, former Carlyle Group co-CEO Glenn Youngkin, and Trump -- even daring the former president to visit the state, which he lost by 10 points. Read more here at Bloomberg.


  • Radio host Larry Elder wins fight to enter California recall A California judge on Wednesday cleared the way for conservative talk radio host Larry Elder to join the field of candidates for an upcoming recall election aimed at removing Democratic Gov. Gavin Newsom from office. Elder scored a swift court victory in Sacramento, where he challenged a decision by state election officials to block him from the September recall ballot. Read more at ABC.


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