This week we are bringing you news of Montana's attempt to ban statewide sales taxes, ballot measures to tax e-cigarettes (in California), efforts to enact the nation’s first carbon tax (in Washington state), an initiative to increase income taxes (in Cleveland, Ohio), budget problems in Kansas (along with possible revenue raising momentum), and efforts to address revenue shortfalls in Virginia, Nebraska, and Massachusetts. Thanks for reading the Rundown!
-- Meg Wiehe, ITEP State Policy Director, @megwiehe
- Montana's Gov. Bullock has proposed banning a statewide sales tax. While there is no state sales tax currently levied, the constitution allows for one up to 4 percent—a possibility the governor wants to do away with. But don't expect to see any action on this in the near future. Passage requires support from two-thirds of the legislature and voter approval in the 2018 general election.
- If voters approve Proposition 56 in a few weeks, California will become the fifth state to tax e-cigarettes, joining Kansas, Louisiana, Minnesota, and North Carolina.
- Voters in Washington state have the chance to vote on what could be the first carbon tax in the country, a measure that has divided support even within the environmental community.
- As a result of numerous tax cuts, Ohio cities continue to struggle. This November, Clevelanders will consider the city's first income tax increase in 35 years. To avoid deep cuts to city services, Issue 32 would increase the tax half a percent to 2.5 percent.
- In Kansas, researchers warn that population changes will exacerbate state budget problems, Democrats and moderate Republicans are pushing for the legislature to raise revenue needed for public investments, and Gov. Brownback is making efforts to spread "good economic news" while not ruling out the possibility of a future tax increase.
- Budget balancing measures to address Virginia's $1.5 billion revenue shortfall have commenced. Gov McAuliffe has called for budget cuts, canceling state employee pay raises, tapping reserve funds, and reconsidering the state's choice not to take part in Medicaid expansion. It remains to be seen whether revenue-raising options will be considered during the 2017 legislative session.
- More on revenue shortfalls: Nebraska is one of many states facing a current and projected revenue shortfall. Unfortunately, it is also one of several states where some leaders think the solution to these problems is to make further cuts. In Massachusetts, a $295 million budget deficit has been identified. As a result, Gov. Baker is pursuing workforce reductions and contemplating cross-agency spending cuts.
What We're Reading...
- David Cay Johnston digs into IRS data on "HINTs" – people with High Incomes and No Taxes – and finds there are more than you might expect.
- The National League of Cities reports that after ten years, city budgets have almost returned to their pre-recession levels, though many cities in California find that hard to believe.
- The Pew Charitable Trusts summarizes city soda tax referenda in CA and CO, as well as legal challenges to a similar measure in PA.
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