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    Monday
    Oct292018

    Oregon Voters Could Make It Harder to Raise Revenue

    The state already has a supermajority requirement to raise taxes. Businesses want to expand it to protect their tax breaks.
    BY  OCTOBER 29, 2018
    The Oregon Statehouse (Shutterstock)

    For a full summary of November's most important ballot measures, click here.

    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 2015 ruling held that while proposals to increase taxes were still subject to the requirement, lawmakers could eliminate tax rebates and exemptions without the three-fifths majority. While that’s consistent with many of the 13 other states with a supermajority requirement for broad-based taxes, it’s led to concerns in Oregon that lawmakers will use the workaround as a way of plugging budget holes or increasing the budget.

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    Friday
    Oct262018

    The Week in Public Finance: Will Oklahoma Finally Wean Its Budget Off Oil?

    A ballot measure would do just that by adopting a financial practice already common in most other oil-dependent states.
    BY  OCTOBER 26, 2018
    Oil pumps in rural Oklahoma (Shutterstock)

    For a full summary of November's most important ballot measures, click here.

    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 reason Oklahoma is so susceptible to the oil market is because it's one of only two oil states in the country -- the other is Louisiana -- that doesn’t protect its budget by reinvesting at least a portion of its oil revenue.

    Come Election Day, however, that could change if residents approve Question 800.

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    Friday
    Oct192018

    The Week in Public Finance: Most States' Tax Systems Worsen Income Inequality

    A new report ranks the most and least fair tax systems.
    BY  OCTOBER 19, 2018

    (Shutterstock)

    Some people pay more than their fair share of taxes -- and it’s not the rich.

    According to a new report by the progressive-leaning Institute on Taxation and Economic Policy (ITEP), the lowest-income households pay 50 percent more, on average, of their income in state and local taxes than the wealthiest. That leads to worsening inequality in four out of every five states.

    “While state and local taxes can’t eliminate income inequality, well-designed systems can help lessen the problem,” says Meg Wiehe, ITEP’s deputy director. “Meanwhile, it’s clear that steeply regressive systems only make it worse.”

    A regressive tax takes a proportionally larger share of income from lower- and middle-income residents than from wealthier taxpayers. When factoring incomes in, ITEP found the national average effective state and local tax rate is 11.4 percent for the poorest 20 percent, 9.9 percent for the middle 20 percent and 7.4 percent for the richest 1 percent.

    The state where tax inequality is the

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    Wednesday
    Oct172018

    A Second State Could Ban Service Taxes

    As taxes on Netflix and yoga gain favor as a way to raise revenue, a movement to stop them is growing. In November, the debate heads to Arizona.
    BY  OCTOBER 17, 2018
    List of streaming services on a screen.
    (Shutterstock)

     

    SPEED READ:

    • Governments have struggled to raise revenue since the recession, leading some to start taxing services like Netflix and yoga.
    • In response, Arizona could become the second state to ban any expansion of the tax on services.
    • The November ballot measure is supported by many industries but opposed by policy experts and politicians on both sides of the aisle, including Republican Gov. Doug Ducey.
     

    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.

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    Friday
    Oct122018

    The Week in Public Finance: How the New NAFTA Deal Impacts States

    The revised trade pact keeps the original agreement's free trade zone intact while placing some new burdens on the auto industry.
    BY  OCTOBER 12, 2018

    The assembly line at GM's Chevrolet Silverado and GMC Sierra pickup truck plant in Fort Wayne, Ind. (Shutterstock)

    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 revised trade pact, dubbed the United States Mexico Canada Agreement, keeps the free trade zone intact while placing some new burdens on the auto industry. Two new key requirements include introducing a higher minimum-wage standard and boosting the required share of auto parts and components from North America up to 75 percent from 62.5 percent.

    Industry observers have reacted positively to the deal mainly because there is one. “It’s a positive compared with the alternative,” says Moody’s Investors Service analyst Ted Hampton. “But a lot remains to be seen.”

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