We retired Tax Justice Blog in April 2017. For new content on issues related to tax justice, go to www.justtaxesblog.org
Click Here to sign up to receive the
Thanks for reading the Rundown! Here’s a sneak peek: Missouri lawmakers want to move money from anti-poverty programs to road construction in a move some are calling unconscionable. Arizona could pass a first-of-its-kind tax credit for concealed weapons carriers. Louisiana paid out more in corporate tax breaks than it made in corporate tax revenue. One North Dakota lawmaker has regrets about a recent oil tax cut.
– Meg Wiehe, ITEP State Policy Director
The Missouri Legislature will consider a proposal to shift money from programs for poor families and children to road construction. Last year, legislators passed the Strengthening Missouri’s Families Act over the veto of Gov. Jay Nixon. The two-part measure eliminated the state’s Temporary Assistance for Needy Families (TANF) benefits for 9,500 Missourians (6,300 of them children) and made another 58,000 adults ineligible for food stamps. The money saved was supposed to go to job training, child care and other programs to help poor Missourians; instead, lawmakers want to spend the money on road construction to avoid raising the state’s gasoline excise tax by 1.5 cents a gallon. Missouri has not seen a gas tax increase in almost 20 years. Gov. Nixon, who supports the gas tax increase to pay for road construction, rebuked the idea of paying for roads with money diverted from safety net programs as a budget gimmick that “could jeopardize priorities such as local public schools, higher education and services for Missourians with developmental disabilities and mental illness.” An editorial in the St. Louis Post-Dispatch called the proposal “unconscionable,” arguing that if “Missouri drivers want better roads, they — and not the neediest among us — should bear the burden.”
One North Dakota senator says the state will soon come to regret its 2015 decision to lower its oil extraction tax rate. Sen. Jim Dotzenrod said in an op-ed for the Grand Forks Herald that the rate reduction from 6.5 to 5 percent will leave North Dakota with $132 million less in annual revenue if prices remain at $25 a barrel. The rate cut was adopted last year at the insistence of lawmakers who wanted to offset the elimination of a “trigger” provision in a 1987 drilling law. The trigger provision automatically reduced the extraction tax rate if oil prices fell below a pre-determined price of about $55 per barrel; given the recent steep decline in oil prices, the effective tax rate would have fallen from 6.5 to 1 percent if the trigger were not eliminated. While eliminating the trigger was broadly supported by the state’s political establishment, the choice to permanently lower the extraction rate from 6.5 to 5 percent was not. Dotzenrod notes that “the effect of this cut in the oil extraction tax could be quite high because it will be in place even when oil prices rise. For example, had this cut been in effect during the 2013-15 biennium, the revenue loss would have been well over $600 million.” He believes the rate cut will adversely affect future investments in public services.
Louisiana lawmakers are zeroing in on highly inefficient tax credits as one reason for the state’s ongoing budget woes. The state’s Department of Revenue reports that Louisiana paid corporations $210 million more in tax rebates and credits than it collected in corporate income and franchise taxes. From 2004 to 2014, state spending on the six largest tax credits increased from $207 million to $1.08 billion. Gov. John Bel Edwards wants lawmakers to close or reduce several corporate tax giveaways to help plug a significant revenue gap.
If you carry a firearm in Arizona, you could get a tax break. A House committee passed a new tax credit of up to $80 for Arizonans who get concealed weapons permits. Only those who obtain permits after the passage of the credit will be eligible. The bill’s sponsor, House Majority Leader Steve Montenegro, says the tax credit encourages gun safety since individuals must attend firearms training classes to get a permit. The credit, which would be the first of its kind in the nation, would cost $1.9 million in revenue.
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 Sebastian Johnson at firstname.lastname@example.org. Click here to sign up to receive the Rundown via email.