January 20, 2015 5:29 PM
January 20, 2015 05:29 PM
By Sebastian Johnson, State Policy Fellow at ITEP | | Bookmark and Share

Click Here to sign up to receive the 
State  Rundown in your inbox.
SRLogo.jpg

Legislators in Montana have a full plate this week, including several proposals to cut taxes. One plan would cut state income taxes by 5 percent across the board at a cost of $79 million in lost revenue, while a more modest proposal would cut income tax rates at a cost of $26 million. An ITEP analysis found that the rate cuts in both plans would overwhelmingly benefit high-income taxpayers; in each case, the top 20 percent of taxpayers would receive roughly two-thirds of the tax cut.

Two proposals in the New Hampshire Senate would lower the business enterprise and business profits taxes. Sponsors of the proposals have argued that the state’s corporate tax rates deter investment, but as the New Hampshire Fiscal Policy Institute points out business tax cuts are an ineffective economic development strategy. One bill proposes a reduction in the business profits tax rate from 8.5 to 8 percent. The profits tax falls on businesses with gross receipts over $50,000, though only one percent of filers actually pay it after credits are applied. The other bill would reduce the business enterprise tax, which is levied on businesses’ wages, dividends and interest, from a rate of 0.75 percent to 0.675 percent. Combined, the two measures could cost $35 million in lost revenue each year. Opponents of the cuts complain the lost revenue would mean fewer services and worse infrastructure.

New York Gov. Andrew Cuomo will address state legislators and interested citizens in a joint State of the State and budget address this Wednesday. A key element of his budget proposal is a $1.7 billion property tax circuit breaker credit that would be available to homeowners and renters if their property tax payments exceed 6 percent of income. The circuit breaker would phase out for homeowners with $250,000 or more of income and for renters at $150,000 (13.75 percent of their rent would be considered property taxes). The governor estimates that over 1.3 million New Yorkers would receive an average credit of $950 if his plan is fully implemented. The governor may also express his support for a bill that offers tax credits to individuals and corporations who donate money to public schools or scholarship programs for poor and minority students to attend private schools. The bill is contentious, as some see it as a way to divert state money to private education.

 

Things We Missed:

 

  • Last week, we reported that Rhode Island Gov. Gina Raimondo released her budget proposal. She has decided to release her budget instead in early March.
  • Georgia Gov. Nathan Deal released his budget proposal last Friday; an overview can be found here.
  • South Carolina Gov. Nikki Haley released her budget proposal last Monday; an overview can be found here.
  • Virginia Gov. Terry McAuliffe gave his State of the Commonwealth speech last Wednesday; you can read a transcript and watch the speech here.
  • Oregon Gov. John Kitzhaber gave his State of the State address last Monday; you can read a transcript and watch the speech here.

    •  

     

    States Starting Session This Week:
    Alaska
    Hawaii
    New Mexico

    State of the State Addresses This Week:
    Michigan Gov. Rick Snyder (watch here)
    New Mexico Gov. Susana Martinez (watch here)
    Alaska Gov. Bill Walker (Wednesday)
    Missouri Gov. Jay Nixon (Wednesday)
    New York Gov. Andrew Cuomo (Wednesday)
    South Carolina Gov. Nikki Haley (Wednesday)
    Delaware Gov. Jack Markell (Thursday)
    Nebraska Gov. Pete Ricketts (Thursday)

    Governor’s Budget’s Released This Week:
    Kansas Gov. Sam Brownback (Monday)
    Maryland Gov. Larry Hogan (Wednesday)
    New York Gov. Andrew Cuomo (Wednesday)

    Categories: