State finance debates unusually energetic on the finish of June – ITEP

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State Rundown 1/22: Somewhere Between a Flurry and a Blizzard of State Tax Activity So Far

.ITEP employees

Delayed legislative sessions and lengthy debates over federal aid have resulted in a busier June than normal for state budget debates. Arizona, New Hampshire, and north Carolina For example, lawmakers are still pushing for expensive and regressive tax cuts in their states during their session. In the meantime, legislators are attending special summer sessions to discuss tax cuts in Arkansas, Completion of the budget and the permanent fund dividend in Alaska, and close a large revenue gap in their budget in Missouri. New jersey The leaders are unusually ahead of schedule for this time of year as they have reached a budget agreement that includes major investments in affordable higher education and the promotion of tax equity.

Important government tax proposals and developments

  • The ARIZONA The Senate approved a massive tax cut that includes phasing out tiered income tax and introducing a flat rate of 2.5 percent for most taxpayers, as well as a 4.5 percent cap on income tax for wealthy taxpayers. – MARCO GUZMAN
  • NEW HAMPSHIRE Legislators will vote on massive tax reform that would lower corporate taxes and completely abolish the state’s strict income tax on interest and dividends by 2027. Opponents warn that nearly half of the benefits of abolishing the interest and dividend tax would go to the top 1 percent of earners. – KAMOLIKA DAS
  • NEW JERSEY Governor Phil Murphy and legislative leaders reached a budget agreement that will promote tax equity and reduce inequalities by investing in New Jersey residents. The agreement will remit payments of $ 500 to more than 760,000 families, improve homestead property tax credit, expand and refundable child and care credit, and remove age limits on income tax credits for childless workers under 21 and under over 65 kept from accessing it. The budget also includes investments to make college more affordable. – DYLAN GRUNDMAN O’NEILL

State summary

  • Alabamans are now allowed to make contributions to one ALABAMA ABLE Savings Plan account, a tax-privileged savings account for people with disabilities and their families with up to $ 5,000 per year per applicant.
  • Legislators in ALASKA go into their second special session this week in hopes of avoiding a government shutdown on July 1st. The size of the permanent fund dividend remains a controversial issue.
  • ARKANSAS Governor Asa Hutchinson plans to call a special session this fall to allow the General Assembly to approve new tax cuts. His plan would lower the top tax rate for middle- and high-income people, moving from tax cliffs to gradual tax increases for those on the cusp of the various tax tables.
  • CALIFORNIA Governor Gavin Newsom proposes using $ 5.2 billion of federal pandemic aid to pay unpaid rent for low-income Californians.
  • A petition in COLORADO is in circulation that would increase the excise tax on marijuana by 5 percent to fund after-school tuition and other educational services.
  • A new DISTRICT OF COLOMBIA Poll found that 80 percent of voters support an increase in marginal taxes on annual individual income of over $ 250,000 to keep the DC pandemic rebound.
  • LOUISIANAThe new sports betting rule will tax bets at 10 percent when bets are placed in person in sports betting lounges or casinos and at 15 percent when placed online.
  • The MINNESOTA Legislature has submitted a tax bill to the governor that includes tax breaks on federal paycheck protection loans and up to $ 10,200 in unemployment insurance benefits.
  • MISSOURI Legislators will go into a special session to fill the void they left when they failed to renew the state’s Medicaid provider taxes. If this were not corrected, it would be devastating to the health of Missourians and would also jeopardize education, other services and federal fiscal cuts.
  • The NORTH CAROLINA The Senate proposed deeper tax cuts than those recommended by the House of Representatives after learning that the state generated more tax revenue than expected this year. The proposal would lower the income tax rate from 5.25 percent to 3.99 percent over time (as opposed to the House of Representatives 4.99 percent) and would continue to completely abolish state corporate income tax and increase standard and child deductions. Teachers and workers may see fewer increases in wages as tax cuts – mostly targeted at the top 20 percent of taxpayers – take precedence over investments.
  • The RHODE ISLAND The Senate this week voted to legalize and regulate cannabis in The Ocean State. However, the bill is unlikely to be taken up by the House at this session.
  • A plan in WISCONSIN that would eliminate the personal property tax recently passed by the legislature’s finance committee. Republicans have also tabled a plan in recent weeks to lower the second-highest income tax bracket.

What we read

  • A comment in the Arkansas Times questions the logic of introducing new tax cuts, though ArkansasNo Children, especially children of color, are lagging behind on a number of key metrics such as child health and the number of children covered by health insurance.
  • The government highlights the debate over the gas tax hike and how that reluctance to raise the tax appropriately has resulted in crumbling infrastructure in the US.
  • Pew’s Race and Research podcast brings together Harvard’s David Williams and Brookings’ Andre Perry to discuss how race affects economic mobility and what can be done to improve economic outcomes.
  • Route Fifty reports on states using federal tax breaks to boost their tourism and hospitality industries as the economy recovers. Stateline covers other cases where states are using the funds to invest in their parking systems.
  • The Center on Budget and Policy Priorities has the latest information on how states, and may not, tax inherited wealth.

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