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Rumors abound in Springfield that a gas tax increase could be in the works. Though Illinois Gov. Bruce Rauner has downplayed reports that he supports such a measure, in his state of the state address last week he said the state needs to “restructure” its motor fuel tax to pay for infrastructure investments. Leaked documents from Rauner’s business allies detail possible fixes, including a 13-cent increase in the gas excise tax and increasing the cost of registering, titling, and driver’s licenses.

Arkansas Gov. Asa Hutchinson signed his proposed middle-class tax cut into law on Friday after the measure passed both chambers of the legislature by wide margins. The bill passed with a proposed capital gains tax measure intact. The exemption for capital gains will fall to 40 percent from 50 percent – less than the 30 percent proposed in the Senate version of the bill, but still a significant improvement in making the state’s tax system fairer. The tax cuts exclude the 40 percent of Arkansans earning less than $21,000 per year. If no additional changes are made, the disparity between the tax rate paid by low-income workers and other Arkansans will worsen; Arkansas ranks 11th in the Who Pays Inequality Index.

Oklahoma lawmakers have turned their sights on a glut of tax credits and incentives that cost the state more than $1 billion annually. Facing a $300 million shortfall, some legislators argue that many of the incentives, though well-intentioned, do not perform well or live up to their promises. Leaders in the House and Senate have proposed a four-year review process for tax credits and incentives. Meanwhile, policymakers have taken the Kansas lesson to heart and pushed proposals to slash the state’s income tax to the backburner.


Governor’s Budgets Released This Week:
Kentucky Gov. Steve Beshear (Tuesday)
Texas Gov. Greg Abbott (Wednesday)