states

,

The New Gold Rush for Green Bonds

,

BY  | JULY 2018

Hanging on the wall just outside Bryan Kidney’s office in Lawrence, Kan., is the framed first page of a bond offering statement. Unlike most -- or really, any -- bond statements, this one required a color printer. It could even be described as cheeky: It’s for the sale of the city’s first green bond, and every reference to “green bond” or “green project” is printed in green ink.

Kidney, the city’s finance director who shepherded the $11.3 million sale last year, says the green ink originally started out as a joke. 

But then, he thought, why not? When the projects are fully implemented, Lawrence is projected to save 3,201 tons of carbon dioxide equivalents (CO2e) annually, which is equal to burning 3.5 million fewer pounds of coal. “I get really passionate about this stuff,” Kidney says. “I was just so excited that Lawrence stepped up to be a leader in sustainability.”

,

Taxpayers Have Their Own Bill of Rights in Colorado. But Who Benefits?

,
The unique anti-tax tool has defined spending in the state, and it may spread to more states.
BY  | OCTOBER 2017
Anti-tax advocate Douglas Bruce led the TABOR effort in 1992. "No one has had the impact on Colorado politics" that he has, according to one academic in the state. (AP Photo/Ed Andrieski)

The blue tag on the streetlight outside Robert Loevy’s Colorado Springs home in 2010 didn’t signal an upcoming utility project. It was a receipt to show he had paid the $100 to keep his light on for the year. The city was facing a decimating $40 million budget gap and, among many other cuts, it was turning off one-third of its streetlights. That is, unless residents could come up with the money themselves. “I could afford to pay it,” Loevy says today, “but I have to think that would have been a stretch for many lower-income people.”

Loevy, a retired Colorado College professor, says the lights-out incident -- which earned Colorado Springs international infamy that year -- is just one of the many instances in which Colorado’s Taxpayer Bill of Rights (TABOR) has only benefited those taxpayers who can afford to pay for services out of their own pocket. Loevy has been a vocal critic of the law. As he sees it, “TABOR has had its worst effects on poor people.”

TABOR was approved by Colorado voters 25 years ago next month. The constitutional amendment limits the state’s year-to-year revenue growth to a formula based on inflation plus the growth in population. If revenues exceed TABOR limits, the money has to be rebated to voters, unless they approve an increase in spending.

Halfway across town, the author of TABOR holds a more cynical view of Colorado Springs’ recession-era cuts, which also included shuttering pools, terminating bus service on evenings and weekends and eliminating 550 municipal jobs. The deeply conservative Colorado Springs has its own TABOR that puts even more limitations on the city’s property tax rate. To Douglas Bruce, an anti-tax advocate who spearheaded the bill of rights effort in 1992 at the state level, the cuts were nothing more than a “publicity stunt” designed to fuel resentment against TABOR. “It confirmed my belief,” Bruce says, “that the people running city government are sadistic bastards.”

,

Legal or Not, States Forge Ahead With 401(k)-for-Everyone Plans

,
Congress jeopardized the future of state plans to help private employees save for retirement. States don't seem to care.
BY  | AUGUST 2017
Fifty-seven million American workers don't have access to a retirement plan through their jobs. (David Kidd)

Matt Birong spent years cooking in upscale restaurants in Boston and New York City. In an industry notorious for low wages and zero benefits, he did something very unusual: He opened a retirement savings account for himself. Birong admits that if his parents hadn’t insisted he do so, he likely would have skipped the process. Even then, the notion of setting up an investment plan on his own would have been overwhelming if he didn’t have a trusted friend in the financial services industry to walk him through it.

Now, as owner and head chef of 3 Squares Café south of Burlington, Vt., Birong wishes he could do the same thing for his employees. He already offers other unusual perks for the industry to attract quality and loyal workers, such as paid time off after one year of service. But setting up a retirement savings program for his roughly 15 employees? “I’ve got my head under a sink making sure the water’s not leaking on the tenants downstairs,” he says. “I just don’t have the time; it’s not that I don’t want to.”

Birong’s situation is similar to that of many small-business owners across the country and is a big reason why half of private-sector workers don’t have an employer-sponsored retirement plan. Of those 57 million people, only a small percentage have saved on their own and those savings are generally paltry. According to the National Institute on Retirement Security, the median retirement account balance is $3,000 for all working-age households and $12,000 for near-retirement households.

Some states want to change that. This July, Oregon became the first to offer a retirement plan to full- and part-time private-sector workers who don’t have access to one through their employer. Eight other states -- California, Connecticut, Illinois, Maryland, Massachusetts, New Jersey, Vermont and Washington -- are implementing similar plans that should reach full rollout within the next five years. In general, the programs will run independently from the state and will be paid for through retirement account fees. When the nine state plans are up and running, they will serve roughly one-quarter of private-sector workers across the country. In California alone, the plans will cover nearly 7 million people.

The Curious Case of Disappearing Corporate Taxes

Over the past two decades, corporations have doubled their profits but contributed increasingly less to state revenues. Where is all the money going?
BY  | JANUARY 2016

When Rick Snyder became governor of Michigan in 2011, his state had been on a 10-year economic slide -- businesses were leaving and so were people. Where the rest of the country saw growth in the first two-thirds of the 2000s, Michigan’s fiscal health was slip-sliding away.

Reversing a slide is difficult, and Michigan’s governor and legislators focused a good chunk of their turnaround efforts on taxes. They wanted to reform the tax code so that it would lure businesses and generate the revenue needed to underwrite the kind of quality services that make people want to live there. Snyder’s first step was to ask the legislature to slash business taxes. Within months, lawmakers repealed the unpopular and complicated Michigan Business Tax -- though businesses could opt to stay with parts of the old system and its arcane web of credits and rebates. That isn’t all the legislation did. The new tax law created a flat 6 percent tax that only certain types of corporations paid on their income. Talk about simplification: Nearly 100,000 businesses no longer had to file corporate returns.

Michigan has made economic progress since the 2011 tax reforms were passed. The population has stabilized, and the state ranks fifth in the country in job creation. Earlier this year, Michigan’s bond rating was upgraded, an affirmation of a more stable fiscal environment.