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Thanks for reading the State Rundown! Here’s a sneak peek: St. Louis, Missouri residents renew earnings tax by a wide margin. Ferguson, Missouri, voters reject property tax increase to fund police reform but approve sales tax increase. Mississippi House passes scaled-down tax cut package. Ohio Gov. John Kasich promises another tax-cut package next year.
— Carl Davis, ITEP Research Director
Despite a big-money campaign by a local billionaire to derail the measure, voters in St. Louis, Missouri renewed their local earnings tax by a wide margin. The 1 percent income tax applies to the income of those who live or work in St. Louis. According to unofficial election results, 72 percent of city voters wanted to keep the tax, which they must reapprove every five years. Supporters of the tax said its elimination would have created a big budget shortfall for the city. Opponents in the state legislature have introduced a bill that would repeal the tax.
Meanwhile, voters in Ferguson, Missouri, rejected a property tax increase that city officials say is needed to fund police reform efforts. The tax proposal, which appeared on the ballot as Proposition P, would have increased the property tax levied by 40 cents per $100 of assessed value. It required a two-thirds majority to pass but received just 57 percent of the vote. If approved, Proposition P would have generated $600,000 in new revenue. Voters in Ferguson did approve a sales tax increase, which requires only a simple majority to pass and received 69 percent of the vote. That measure is expected to raise $1.225 million in new revenue annually. The municipality came under scrutiny from the U.S. Justice Department after the killing of teenager Michael Brown by city police officers in 2014.
The Mississippi House passed an income tax cut package this week, though the measure is much smaller than that sought by the Senate. The chamber approved $143 million in personal income tax cuts and raised the threshold for state income tax liability to $5,000 of taxable income. The state Senate, led by Lt. Gov. Tate Reeves, originally sought a $575 million package of corporate franchise, income and self-employment tax cuts. House Speaker Phil Gunn, who supported the scaled-down cuts, would have preferred to pair the cuts with increased revenue for roads and infrastructure spending. There is still a possibility that legislators will consider revenue increases for that purpose.
Ohio Gov. John Kasich delivered his State of the State speech this week, promising to propose another package of income tax cuts early next year. Since 2011 Ohio has cut taxes by more that $5 billion, including elimination of the estate tax and personal income tax rate reductions of 16 percent. Opponents of the governor’s cuts argue that local jurisdictions bear the brunt, seeing $1.7 billion less in aid from the state.
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