This week we are bringing you news about states seeking revenue–Alaska, South Dakota, and Utah all weigh the creation of or increases to state personal income taxes; the need, and in some cases the will, for transportation funding in West Virginia, Indiana, Montana, and Louisiana; and revenue shortfalls in Florida, Ohio, Oregon, and Kansas.
-- Meg Wiehe, ITEP State Policy Director, @megwiehe
- As Alaska legislators are gearing up for a challenging session, Gov. Bill Walker works to steer the discussion away from oil taxes and more toward a structural fix that includes broad-based taxes. The Walker administration is working to develop an income tax system less closely linked to the federal tax.
- South Dakota's heavy reliance on the sales tax threatens to inhibit the state's ability to invest in vital state services, as revenues from that tax continue to struggle and other revenue options are limited. One leading businessman is proposing that it is "long past time" to discuss creating an income tax in the state to better diversify its revenue sources.
- A coalition in Utah has announced its plans to pursue a personal income tax increase to fund education on the ballot in 2018.
- West Virginia’s Road Fund is down $49 million over three years due to the state’s annual recalculation of the average wholesale gas price. The latest trigger comes amidst mid-year cuts to K-12 education and a shortfall expected to exceed $400 million.
- Speaking of funding for transportation... it is a top legislative priority for Indiana lawmakers. There is less consensus around the source of new funds. Ideas being considered include new tolls, increasing the cigarette tax, raising the gas tax and indexing to inflation, and reallocating existing state resources. Gas tax increases are also being considered in Montana and Louisiana.
- Revenue shortfalls: Economists in Florida are now projecting a budget shortfall for the upcoming budget cycle that could hit $1 billion. In Ohio, state revenues continue to lag behind estimates. Gov. John Kasich warns that the state is on the verge of a recession.
- With the failure of ballot measure 97, Oregon faces a daunting $1.7 billion deficit. Gov. Kate Brown's budget released last week relies on deep cuts, funds withheld from many social services and universities, and some new revenue through increased taxes on tobacco, liquor, hospitals, insurers, and some corporation owner's incomes.
- After revising revenue forecasting in the state, Kansas revenues in November met projections for the first time in months. However, they didn't make a dent in the $350 million budget gap that still remains.
What We're Reading...
- The Lincoln Land Institute has a new-and-improved interactive website to learn about Significant Features of The Property Tax in your state and how they compare to other states and the U.S. generally.
- New analysis from economists Piketty, Saez, and Zucman's shows how an expanding U.S. economy over the past 3.5 decades has left half of all Americans behind.