Voters handed Republican lawmakers a victory by passing a new supermajority requirement to raise taxes. But it's debatable whether it will actually curb tax increases.
Oregon Voters Could Make It Harder to Raise Revenue
Some two decades ago, Oregon joined more than a dozen states in passing a constitutional amendment that requires a legislative supermajority to approve tax hikes. Three years ago, the state Supreme Court and a subsequent legislative counsel opinion created what some say is a loophole. In November, voters could close it, making it harder for the state to raise revenue.
The Week in Public Finance: Will Oklahoma Finally Wean Its Budget Off Oil?
Oil prices fell to a two-month low this week. Any time they tumble, oil-dependent states like Oklahoma are on edge. More than most states with economies heavily reliant on oil and natural gas, its budget is extremely vulnerable to the ebb and flow of the oil economy.
The Week in Public Finance: Most States' Tax Systems Worsen Income Inequality
A Second State Could Ban Service Taxes
More governments are looking to expand their sales tax to services like Netflix and yoga. Already, half of states tax fitness studio classes or memberships, while places like Chicago, Florida and Pennsylvania have all started taxingonline streaming services in recent years.
But there's a growing movement in conservative states to stop that trend.
The Week in Public Finance: How the New NAFTA Deal Impacts States
After President Trump threatened for more than a year to withdraw from NAFTA, auto-manufacturing states breathed a sigh of relief when he announced a renegotiated trade agreement earlier this month with Canada and Mexico.
A U.S. withdrawal from the 1994 pact would have resulted in the reimposition of tariffs on specific goods between the U.S., Canada and Mexico. The impact would have been felt most acutely by states such as Michigan that do a lot of business with the two countries.
The Week in Public Finance: States Intent on Taxing Big Pharma Over the Opioid Crisis
Lawmakers want to raise taxes on pharmaceutical companies to help pay for the cost of the opioid crisis. But success has been elusive.
(Shutterstock)
SPEED READ:
- Minnesota's "penny a pill" bill failed in the state legislature after heavy lobbying removed a key provision. The state plans to try again in 2019.
- An additional 10 states all tried and failed to pass opioid taxes this session. Lawmakers in those states say they will try again nex year.
- Only New York has successfully passed legislation, but the new law is on hold thanks to a lawsuit.
States haven't been very successful at taxing drug companies to help pay for the opioid crisis. But that won’t stop them from trying again next year.
Minnesota State Rep. Dave Baker, a Republican who sponsored a failed “penny a pill” bill during this year's session, has said that he plans on a different focus in 2019: pharmaceutical licensing reform. Liquor stores and bars pay thousands of dollars each year for the privilege of selling alcohol, Baker noted this week at a conference on opioids in Minneapolis, but drug companies only pay a few hundred dollars in licensing fees.
How a State's Age Affects Its Financial Health
As the nation's median age ticks up, recent research from S&P Global Ratings has warned that an older population may burden states' economic growth. As it turns out, a state's own age may also be an economic burden.
The Week in Public Finance: Amid Rising Home Prices, 2 States Take Property Tax Proposals to Voters
Ballot measures in California and Louisiana seek to protect homeowners from huge property tax spikes.
(Shutterstock)
SPEED READ:
- Voters in California and Louisiana face ballot measures that would reduce their property taxes at a time when the median U.S. home price has risen by 40 percent in five years
- California's Proposition 5 would help seniors, the disabled or people who are homeless as the result of a natural disaster.
- Louisiana's Amendment 6 would phase in homeowners’ new property taxes over four years.
Home prices have risen, but when voters in two states head to the polls in November, they could at least reduce their property taxes.
The median home price has risen by 40 percent nationwide in the past five years and is still rapidly rising. The increase is blamed largely on a housing shortage. The problem has been especially acute in California, which -- along with Louisiana -- is considering property tax reductions this fall.
Pensions Are Shelling Out Billions in Fees -- and It's Not Paying Off
The Week in Public Finance: Some States Are Less Prepared for a Recession Than a Decade Ago
The Week in Public Finance: Thanks to SCOTUS, States Are Taxing Online Sales. But the Legal Fight May Not Be Over.
The U.S. Supreme Court may have ruled that states can collect sales taxes for online purchases, but it turns out it's not so easy. Thanks to the complexities of tax structures in some states, the legal challenges may not be over.
The Week in Public Finance: What the Aging Population Means for State Finances
The Week in Public Finance: Do Income Tax Caps Only Benefit the Wealthy?
North Carolina voters will weigh in on the rare policy in November.
The North Carolina Capitol (David Kidd)
For a summary of November's most important ballot measures, click here.
A proposed income tax cap in North Carolina survived a court challenge this week, leaving it to the voters to decide whether to lean in to what is a rare policy in state government.
The November ballot measure would lower the state’s income tax rate cap from 10 percent to 7 percent. That’s still above the state’s current flat income tax rate of just under 5.5 percent. But in the past, the rate has been as high as 8.25 percent for high-income earners.
Capping income tax rates is unusual. Georgia is the only other state that does so, with a 6 percent cap approved by voters in 2014.
3 Ways Blue States Could Still Get Around Tax Reform
The Internal Revenue Service issued new regulations late last month in an effort to end workarounds by blue states hoping to bypass the state and local tax deduction cap introduced under December's federal tax overhaul. But observers say that even with the new regulations, states still have several ways to get around the cap.
The Week in Public Finance: Tax Hike for Teachers Kicked Off Arizona Ballot
In a surprise ruling in Arizona, a proposed income tax hike to restore education funding has been knocked off the November ballot. Had the measure gone before voters and passed, it would have nearly doubled the state’s income tax rates on the wealthy and made Arizona the first red state to pass a millionaire’s tax.
While Feds Loosen Payday Loan Regulations, Colorado Voters Could Clamp Down
In a year when the federal government is dialing back financial regulations, Colorado could become the 16th state to limit the notoriously high interest rates on payday loans.
(Shutterstock)
For a summary of November's most important ballot measures, click here.
As the federal government walks back historic regulations on payday lending, Colorado voters this fall will be asked to tighten them -- a sign that strong consumer protections are increasingly being left to the states.
Short-term loans, often called payday loans because they’re due on the borrower’s next payday, have average interest rates of 129 percent in Colorado. Nationally, rates average between 150 percent and more than 600 percent a year. A ballot proposal, which was certified as Initiative 126 by the secretary of state on Tuesday, would cap those rates at 36 percent. If passed, Colorado would be the 16th state, plus the District of Columbia, to limit payday loan rates.
The Week in Public Finance: After Teacher Strikes, Voters Will Get a Say on Education Funding
Support for raising teacher pay is near historic highs, but is it enough for voters -- some in red states -- to approve tax increases?
Teachers protested outside the Colorado state Capitol in Denver this spring. (AP/David Zalubowski)
For a summary of November's most important ballot measures, click here.
After wide-scale teacher walkouts and strikes in six states this spring, support for teacher raises is nearing an all-time high. That could be a determining factor this fall in three states where voters will be asked to approve changes to boost school funding.
Arizona, Colorado and Oklahoma all have ballot measures on education funding and saw teacher walkouts this year. According to a new poll by the journal Education Next, nearly two out of every three respondents in those states, and others with teacher strikes, favor raising teacher pay -- a 16-point jump since last year. Nationally, about half of respondents support increasing teacher pay, the second-highest it has been in the survey's 12-year history.
Even When Teams Pay, Stadiums Still Aren't Free for Cities
The Week in Public Finance: Do Supermajorities Really Stop Tax Hikes?
Republican lawmakers in Florida want voters to approve a ballot measure that theoretically would make it harder to raise taxes. But it's debatable whether supermajority requirements actually do.
A November ballot initiative would require the Florida legislature to have a supermajority to raise taxes. (TNS/Joe Burbank)
In an effort to protect conservative tax policy, Florida lawmakers are hoping to make their state the 15th with a supermajority requirement to raise taxes.
The push has drawn national attention because it comes as some are predicting a wave of Democratic victories this fall that could pull state policy more to the left. Opponents of the proposed Florida constitutional amendment -- which would require 60 percent voter approval to pass -- say Republican lawmakers put this on the November ballot to “stack the deck” against any Democrats taking office after them.
“It’s very clear that they’re getting ready for when they’re out of power,” Tallahassee Mayor Andrew Gillum, a Democrat, told The Washington Post. Gillum is running for governor on a platform of enacting "Medicare for All" and putting an additional $1 billion into education -- promises that would likely take tax increases to keep. “Everything we have proposed hinges on our ability to defeat this.”