State Rundown 9/21: Many States Moving in Reverse

This week we are bringing you news about taxpayer disapproval of stadium subsidies in Nevada, more pressure to reverse tax cuts in Kansas, a move in Missouri to narrow its sales tax base, and other state tax policy developments from across the country.  Thanks for reading the Rundown!

— Meg Wiehe, ITEP State Policy Director, @megwiehe

• While many states are attempting to modernize their sales taxes by applying them to more services, many in Missouri are trying to move the state in the opposite direction. In November, November, Missouri voters will vote on a ballot measure to constitutionally prohibit applying the sales tax to services in the future.  And, Show-Me State legislators overrode Gov. Nixon’s veto of a bill that will exempt instructional classes like those for dance and martial arts from sales tax. The new tax exemption and another bill creating an income tax deduction for federal agricultural disaster aid payments forced Gov. Nixon to cut $57.2 million from schools, transportation, universities, and other services.
• A case before the Kansas Supreme Court on the adequacy of funding for public education could add an additional $1 billion budgetary pressure on the state to repeal Gov. Brownback’s infamous tax cuts.
• A New Mexico tax incentive program enacted in 2004 has cost the state more than anticipated and sent millions of dollars to out-of-state companies, so some are arguing the program should be reconsidered as the state deals with a possible special session to address recurring revenue shortfalls.
• Hawaii is the latest state testing a “mileage tax” as a way to fund transportation repairs and investments, joining states including Oregon and California in efforts to counter eroding fuel taxes.
• Recommendations for taxpayers to subsidize the building of a new stadium for the Oakland Raiders in Las Vegas have been submitted to the Nevada governor and state Legislature. Proponents are pushing for a special legislative session this fall to approve the measure, despite voter disapproval.
• Wisconsin governor Scott Walker’s two-year transportation plan excludes the possibility of new tax revenues or fee increases, foreshadowing a budgetary battle in 2017 and halted highway projects.
• Recent revenue forecasts indicate that Colorado may be joining the list of states facing a budget gap in the next fiscal year, due to declining receipts from the energy sector and court-ordered rebates to oil companies.

What We’re Reading…  

• New Jersey Policy Perspective has released a report and short video chronicling the “Notorious Nine” fateful decisions beginning in the 1990s that brought the state down from economic powerhouse to fiscal mess. Step one for states looking to recreate the New Jersey disaster? Pass unaffordable, regressive income tax cuts.
• A new academic paper examines ownership of pass-through businesses and how much taxes they pay, finding that pass-through income is more heavily concentrated among high-earners and that many of the ownership interests are unclassified or circularly owned.

If you like what you are seeing in the Rundown (or even if you don’t) please send any feedback or tips for future posts to Meg Wiehe at meg@itep.org. Click here to sign up to receive the Rundown via email.