This week we bring you tax and budget news in Alaska, North Dakota, Massachusetts, Mississippi, and Cleveland, Ohio. Be sure to check out the What We’re Reading section for a grab bag of tax-related op-eds, new research and even a mention of Pokémon Go. Thanks for reading the Rundown!
-- Meg Wiehe, ITEP State Policy Director, follow me @megwiehe
- Alaska legislators officially ended the second special session called by Gov. Bill Walker this year with no solution to the state's multi-billion deficit. Three days after the House adjourned, the Senate followed their lead. Any movement on budget reform or revenue options will be put on hold until after the November elections. Gov. Bill Walker's administration released a report last week detailing the consequences Alaskans will face as a result of legislative inaction.
- North Dakota's legislature will go into special session on August 2 to deal with a projected $310 million revenue shortfall that continues to widen due to the state's high reliance on tax revenues from a struggling energy industry. The focus is expected to be on budget cuts and use of reserve funds rather than revenue solutions, even after 4 percent across-the-board cuts were ordered in February to fill a similar gap in the last budget and 10 percent cuts have already been ordered for the upcoming biennium.
- Massachusetts lawmakers have ruled out holding a back-to-school sales tax holiday this year due to an ongoing revenue shortfall. It is the first time they have chosen not to hold the holiday since 2009. Our recently updated policy brief explains why sales tax holidays are poorly targeted and ineffective tax policy.
- Mississippi leaders have announced plans to study further overhauls to state's tax code this summer, with a focus on exploring shifting reliance on income to sales taxes. That's an ominous proposition considering the state entered the 2016 session with a revenue shortfall and a need for transportation funding, and passed massive income tax cuts anyway.
- Residents of Cleveland, Ohio will be asked to approve an increase in the city's income tax at the ballot in November. While some of the $80 million raised from the change would be used to enhance city services including police department reforms, the hike is also needed to plug a revenue gap brought about by the hands of state policymakers. Under the leadership of Governor John Kasich, the Buckeye state has cut billions of dollars in state taxes paid for in part by also cutting state aid to local governments. And, to make matters worse for local governments, state lawmakers recently eliminated local revenue sources including the estate tax.
What We're Reading...
- New Jersey Policy Perspective's recent op-ed soberly reflects on the fiscal and political realities surrounding the urgent need for transportation funding in the Garden State.
- Ohio Policy Matter's research director, Zach Schiller, makes the case against the state's continual attempt to gut the income tax in a recent op-ed.
- The North Carolina Budget and Tax Center's director, Alexandra Sirota, explains the many problems with the state's new rigid budgeting practices in this op-ed.
- A recent study shows that municipal debt is increasingly owned by wealthy households. This article from Financial Planning looks at potential implications of this shift for tax policy.
- A new academic paper examines the relationship between sales taxes on groceries and food insecurity.
- "The Fiscal Ship" is an online computer game that allows users to select from over 100 tax and spending options to achieve their policy goals and manage the federal debt. The Wall Street Journal reports that to date, players overwhelmingly have chosen tax increases over spending and tax cuts.
- Did you take a break from Pokémon Go to read this? Take a look at the tax aspects of the game here.
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