State Rundown 12/3: Who Needs A Budget?

Pennsylvania leaders have again pledged that a budget deal is in reach, despite the collapse of a recent compromise (and, of course, the compromises before that). The state is also in its sixth month of stalemate. Gov. Tom Wolf says that negotiations are down to “details and language,” with revenue raising measures being a sticking point. Legislative leaders have ruled out a broad-based tax increase so negotiators are working on a way to raise $600 million without a sales tax rate increase. Rather, a wider range of goods and services will be subjected to sales tax, including admission to museums, amusement parks, and golf courses. A proposed property tax reduction is no longer under consideration. Both houses of the legislature plan to work through the weekend on reaching a deal.

Mississippi leaders will push forward with tax cuts next legislative session even though revenue collections are sluggish enough to threaten mid-year budget cuts. Gov. Phil Bryant and Lt. Gov. Tate Reeves, both recently reelected, will try again to push tax cuts after being defeated during the last session. A likely target is the state’s business franchise tax, which is a levy on a business’s property used, invested, or employed. Eliminating the tax, which brings in $245 million annually, is a prime item on both men’s agenda, and bigger Republican majorities in the legislature make it a possibility. House Republicans are just on vote shy of the 3/5 supermajority required to pass a tax cut. Mississippi’s Legislative Black Caucus warned that the state would be unable to afford a deep tax cut like the ones proposed by leaders last session.

Florida Gov. Rick Scott has never met a tax cut he doesn’t like, and if he has his way the upcoming legislative session will give him plenty to love. Scott wants the legislature to pass $1 billion in tax cuts aimed at businesses to fulfill a campaign promise. So far, leaders in the Senate have balked at the hefty price tag, arguing that the governor shouldn’t push business tax cuts at the same time he wants to rely on property tax increases for more school funding. Budget officials estimate that Florida will see a surplus of $635 million this fiscal year, but some argue it would be irresponsible to use that one-time money for permanent cuts. In a rare move, Scott appeared before a House panel to argue that his tax cuts would be good for the state’s economy. A recent editorial in the Sun-Sentinel pushed back on the governor’s claims, saying that eliminating corporate income taxes for manufacturers and retailers won’t address Florida’s problems. 

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Do you have a exciting piece of state tax news that should be featured in the State Rundown? Send it to Sebastian at sdpjohnson@itep.org. And don’t forget to sign up for the Tax Justice Digest and follow ITEP on Facebook and Twitter!