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New Hampshire business leaders, nonprofits and civic organizations have come together to oppose business tax cuts proposed in the legislature, arguing that they would jeopardize needed investments in education, infrastructure and other areas. The inclusion of business leaders in the coalition led by the New Hampshire Fiscal Policy Institute represents a rare but growing alliance between businesses who understand that investments are needed for economic growth and progressive organizations that advocate on behalf of working and middle-class families. The state Senate passed two bills in March that would cut corporate tax rates. One would reduce the business profits tax from 8.7 to 7.9 percent, while the other would reduce the business enterprise tax from 0.75 to 0.675 percent.
Kansas lawmakers want to take another look at Gov. Sam Brownback’s tax exemption on pass-through business income after more than 300,000 Kansans claimed the exemption at a cost of millions in state revenue. Initial estimates suggested that fewer than 200,000 taxpayers would be eligible for the exemption, a key part of the governor’s 2013 tax cuts. Many lawmakers, including members of Brownback’s own party, believe the business pass-through exemption is unfair because it has “created situations where a business owner may not pay tax on income, but an employee making less would.” Other legislators believe the exemption has contributed to structural imbalance in the budget, which currently has a $400 million hole.
Minnesota Gov. Mark Dayton rejected a budget proposal from legislators in the state House, saying the $2 billion tax cut package is a “non-starter” because of its fiscal irresponsibility. The House plan would give many Minnesotans a temporary income tax break, permanently phase out the statewide business property tax and reduce taxes on Social Security benefits. The governor refuses to begin budget negotiations until House leaders come up with a plan that is closer to his own targets. Dayton also asserted that the House plan would cost $4 billion annually once implemented, turning the state’s $1.9 billion surplus into a deficit. Gov. Dayton’s budget plan would use the surplus to shore up investments in education, particularly on a push for universal pre-kindergarten.
Nebraska Gov. Pete Ricketts and state legislators are headed for a showdown over a 6 cent-per-gallon increase in the state’s gasoline excise tax that, if approved, would raise $180 million after four years. The measure has already passed the initial hurdle in the state’s unicameral legislature, but two additional votes are needed before it is sent to the governor’s desk. Ricketts has said he does not support the measure. A recent article in the Omaha World-Herald found that inflation has eroded the buying power of Nebraska’s gasoline excise tax by $1 billion since 1995. ITEP’s Carl Davis, who was interviewed for the article, noted that “It’s an inevitable fact that if gas tax rates are not updated from time to time, the tax is not going to keep pace with construction costs.”
Things We Missed:
- Arizona ended its legislative session on Saturday, April 25th.
- North Dakota Gov. Jack Dalrymple signed Senate Bill 2349, which cut the state’s corporate income tax rate by 5 percent and the personal income tax rate by 10 percent. This is the ninth straight year that the state’s leaders have cut income taxes. The House also passed a tax cut for oil companies.
States Ending Session This Week:
North Dakota (Friday)