January 31, 2013

By Phil Sletten

BATON ROUGE, Louisiana: Louisiana lawmakers and media are already discussing the upcoming legislation for this spring’s session. The session, which is set to begin on April 8, will likely feature two major debates with long-lasting impacts on Louisiana’s budgetary future. The Louisiana State Legislature could tackle the state’s tax structure in a substantial manner, and may also find ways to reform the budget process.^[1][2]

The first debate, initiated by Governor Bobby Jindal (R), focuses on tax revenues and reforms. Jindal proposed eliminating the personal and corporate income taxes levied by the state, and making up for the lost revenue through increased sales taxes, in an effort to spur economic growth and job creation. This proposal has garnered national attention and led to much political speculation in Louisiana, both about the policy reforms themselves and implications for Governor Jindal‘s political future.^[3][4]

The Jindal administration has not offered many details about the new taxes, which has lead to considerable speculation and unease among state legislators. The administration has stated that it is still meeting with state legislators and will have a full plan together for the start of the session on April 8.^[5] Legislators have reported mixed feelings from constituents, but most have expressed interest in simplifying the tax code in some manner. Some Democrats, including Representatives Roy Burrell and Herbert Dixon, have expressed concern over the regressivity of switching to sales taxes.^[6] TheInstitute for Taxation and Economic Policy released an analysis of the basic proposal that indicated eliminating personal and corporate income taxes and raising sales taxes would increase taxes on approximately 80 percent of Louisiana citizens, leaving the top 20 percent of income earners with a lower effective tax rate.^[7] This report, alongside concerns that the plan would be especially hard on retirees, has contributed to the wariness of legislators toward the plan.^[8] Some Republicans, including Representatives Stuart Bishop and Chris Hazel, support the broad concepts but have indicated that the details of the proposal will determine whether or not they support it in April. Others, including State Senators Neil Riser and Page Cortez, expressed concern over the proposals impact on revenues and the subsequent changes in service provision.^[6][4] However, the group Americans for Tax Reform has come out in support of the plan.^[9]

Other governors around the country have followed Jindal’s lead. Nebraska Governor Dave Heineman (R) has also proposed eliminating Nebraska‘s personal and corporate income taxes in favor of sales tax increases, and Kansas Governor Sam Brownback (R) pushed for further cuts to state income taxes and the retention of temporary sales taxes in an effort to phase out income taxes entirely.^[10]Republican governors in Virginia, Ohio, Idaho, New Mexico and Florida have also recently proposed policies to cut income taxes, gasoline taxes, or business taxes and, in many cases, replace the lost revenue with sales tax increases. Alaska was the last state to phase out its income tax entirely, a task completed 33 years ago, and Oklahoma Governor Mary Fallin‘s attempt to phase out the state income tax did not pass the Oklahoma State Legislature.^[11] Without details, some Louisiana political insiders suggest that Governor Bobby Jindal‘s proposals could suffer a similar fate.^[12]

The second major issue that the legislature may face centers on proposals to reform the budget-making process in Louisiana. Governor Jindal and significant portions of the State Legislature have had significant and high-profile legal disagreements over the handling of the budget process and the unilateral actions by the governor’s office. These disagreement have added fuel to discontent over the actions of the administration regarding expenditures, including the privatization of five public hospitals, changes to the state pension system, ending state university involvement in a truancy program, and proposals to cut money for hospice services.^{[13][14][15][16]}

A group of legislators known as the “fiscal hawks,” who have spearheaded the Louisiana Budget Reform Campaign, have proposed a package of changes to alter the state’s budgeting process. The broad outlines of the proposal, which suggest some changes to the Louisiana Constitution, would limit the ability of legislators to procrastinate on budget work and constrain the use of one-time sources of revenue to balance the state budget.^[17]

The proposals focus on reinforcing sound budgeting practices and would require the use official revenue estimates from sources recognized by the Revenue Estimating Conference, more checks on efforts to make cuts to state education and health care funding, and a five-day long-period between the end of a legislative session and the passage of a budget.^[18] Specifically, the proposals would require the submission of two spending bills to the legislature during budgets that may require cuts to education and health care, with one spending bill including all of the non-discretionary spending and the other including programs that could be easily altered by legislators. The proposal would also require the Revenue Estimating Conference to identify which sources of revenue were one-time sources and which ones could be considered recurring or sustainable sources.^[19]

Legislators supporting the proposal recognize that these plans may not easily pass, esepcialyl the changes to the Louisiana Constitution. These changes would require a two-thirds vote in the legislature and approval by the people at the ballot box to take effect.^[18]

“We’re going to get heard. The question is can we get passed,” said Representative Brett Geymann (R), who leads the Budget Reform Campaign. “Its not going to be an easy thing, but it’s going to be the right thing and it’s certainly what we heard from the people.”^[18][19]

January 26, 2013

By Greg Janetka

TOPEKA, Kansas: As he presented his annual state of the state address on January 15, Gov. Sam Brownback (R) laid out a broad conservative agenda that includes an end to the state’s income tax. Managing to push out moderate Republicans in the 2012 elections, conservative Republicans now control the House, Senate and governorship in the state, leading other conservatives to view the state as a model to follow.^[1]

This year began with the largest tax cut in state history taking effect in Kansas, including the consolation of three income tax brackets into two and elimination of taxes on nonwage profits for certain types of businesses. A bill introduced this week would further reduce taxes. Meanwhile, addressing the state income tax, Gov. Brownback said he aims to “take it to zero.” Grover Norqust, president of Americans for Tax Reform, said of the state, “Kansas is the starter gun for tax competition. Brownback fired off the shot that said ‘Go.’”^[2]

Supporters of the measures say they are necessary to remain competitive against other states and end economic stagnation. Critics, however, contend the moves hurt the poorest of residents and will lead to economic devastation.

State Rep. Tom Sloan, a Republican representing Lawrence, has been skeptical of the governor’s proposals. Summing up the issue, Sloan said, “Bottom line is, if the governor’s right and I’m wrong, the state will prosper. If I’m right and the governor’s wrong, then the state will suffer long term. I hope he is correct because that’s the path we’re on, but I have my doubts.”^[1]

By Bailey Ludlam

NASHVILLE, Tennessee: Tennessee is one of about three states proposing a ballot measure to ban personal income taxes. Following a vote last week, the proposal is now half way to the 2014 ballot.

The measure, sponsored by Sen. Brian Kelsey, proposes an amendment that would explicitly prohibit the Tennessee General Assembly from levying, authorizing or permitting any state or local tax on personal income.^[1][2]

On January 19 the Tennessee General Assembly closed the first step in referring the measure to the ballot for a public vote. The Tennessee House of Representatives voted 73-17.^[3] Earlier, the Tennessee State Senate approved the measure with a 28-5 vote.^[4]

In order to qualify the measure for the statewide ballot, the Tennessee General Assembly must approve a proposed amendment in two successive sessions. In the second such session, the proposed amendment must earn 2/3rds approval, however, in the first session, it only needs majority approval.

Similar proposals are currently pending in the states of Missouri and New Hampshire. However, both efforts, if successful, would place measures on the 2012 statewide ballots.

By Bailey Ludlam

SPRINGFIELD, Missouri: The proposed Missouri income tax replacement initiative continues to face legal challenges. Shortly following approval of new versions of the proposed text, a group opposing the measure called Missourians for Fair Taxation filed a lawsuit challenging the ballot language.

In March 2011 the same group challenged the ballot wording drafted by Secretary of State Robin Carnahan. The group called the summary, “insufficient, unfair and likely to deceive and mislead voters.” Additionally, the lawsuit argued that State Auditor Tom Schweich failed to differentiate between the nine filed initiatives and could have estimated the fiscal impacts based on information provided by state agencies, supporters and opponents.

The most recent lawsuit argues that the recently approved ballot language is vague. The text says that the measure may earn the state $300 million or cost it $1.5 billion. According to reports, “Republican [Auditor] Tom Schweich says that there are too many variables involved for his office to roll-up its sleeves and crunch the numbers.”^[1]

The new text reads as follows:^[2]

DENVER, Colorado: The initiative effort to get a measure on the ballot that would implement a graduated corporate and individual income taxes in the state has taken it up a notch. On February 3, 2011, The Colorado Fiscal Policy Institute filed six similar initiatives, deciding to move forward from their original filing that was thrown out on technicality in December 2010. According to the group’s director, Carol Hedges, “We feel pretty strongly that we have some pretty serious problems that we’re facing. We are interested in beginning the process of bringing something to the ballot in 2011.” The reason for the six different filings, according to reports, is so the group will have initiatives ready for circulation if some are thrown out by lawsuits or other reasons.^[1]

Prior to circulating initiative petitions for qualification for the statewide ballot, the measure’s title must be approved by the Title Setting Review Board. The Board’s responsibility is to certify that the initiative complies with the state’s initiative laws, including the single-subject requirement.

The Title Setting Review Board heard the measure on December 15, 2010, however the initiative was thrown out after a late change was made to the text.

By Eileen McGuire-Mahony

California authorities look for writer of graffiti death threats against Governor Jerry Brown

Governor Jerry Brown‘s life has been threatened, in the form of graffiti festooned with swastikas. Last week, Santa Ana Police found two separate messages threatening the Governor’s life. One message specified February 14, 2011 – Valentine’s Day – for the attack. The other had a “7″ that had been crossed out and overwritten with a “6″, as if in a countdown. Both messages were removed and reported to the California State Highway Patrol. As the CHP has official responsibility for protecting California’s governor, they will lead the investigation. ^[1]

The early leads indicate the graffiti is a “terrorist attack”. Both Governor Brown’s CHP security detail and the Santa Ana Police are continuing to look for whoever wrote the messages. Security around the Governor will also likely be much higher on February 14, 2011. ^[2]

The Presidential birth certificate will remain sealed after all

Despite coming into office with a stated plan to release Barack Obama‘s original birth certificate, Hawaii Democrat Neil Abercrombie has backed off that plan lately. Attorney General David M. Louie informed the Governor that, within the scope of the law, there is no way to release an original birth certificate absent the consent of the individual. A spokesman for Governor Abercrombie reiterated this, saying, “There is nothing more that Gov. Abercrombie can do within the law to produce a document.” ^[3]

Going back to the first stirrings of his national fame, Barack Obama has refused to release his birth certificate or to address the idea that he is foreign born and that a conspiracy exists to hide the fact. While President Obama is hardly likely to reverse that policy now and while Governor Abercrombie simply cannot carry out his hope to put ‘birther’ conspiracies to bed without violating the law, the longevity of the conspiracy has little to do with the inability for most citizens to see the actual original birth certificate. For advocates of the idea, any document that either Obama or Abercrombie could ever produce would be dismisses as a fraud.

Led by Governor Shumlin, Vermont Dems are taking a serious look at a singlepayer healthcare

Could Vermont be going further than national Democrats were able to when they passed legislation last spring to increase the government’s role in medical care? Under Governor Peter Shumlin and a Democratically controlled legislature, the state may move ahead with plans for a true “single payer system”, the model opponents of government controlled healthcare usually have in mind when they refer to ‘socialized’ or ‘government run’ healthcare. Governor Shumlin hopes to pool all Federal dollars and have a single insurer covering all Vermont citizens by 2014. ^[4]

Shumlin is hopeful both that his proposal will attract business to Vermont, creating jobs in the process, and that he can get Republicans on board by selling the streamlining and cost-cutting aspects of his plan. He specifically references New Hampshire, which has no income tax, as a competitor in luring businesses. As Shumlin envisions it, being able to offer employers an environment in which they bear no direct costs for employee healthcare would alter that playing field in his state’s favor. Shumlin does, however, suggest something like a payroll tax to help fund his single-payer plan – a mechanism that would still hit employers but would also put costs onto employees directly.

By Kyle Maichle

CHICAGO, Illinois: Illinois Senate President John Cullerton fired back at Wisconsin Governor Scott Walker on national television after the first term Governor was courting businesses to move North of the border after income and business taxes were increased. ^[1]

The leader of the Illinois Senate defended the massive tax hike during the January 18, 2011, edition of On the Record with Greta Van Sustren. The Senate President said that: “we had to raise our income tax to pay our bills to get back to even, and that’s where we are…It is a temporary tax, and once the economy improves it will go away.” ^[1] Illinois lawmakers raised its flat income tax from three to five percent and its corporate income tax to nearly ten percent on January 11, 2011. ^[2] Cullerton argued that Illinois will be better off than its neighbor to the North citing that their income tax is still lower than Wisconsin and claims that the Badger State’s graduated income tax is a cause for its current budget deficits. ^[1]

Also, Cullerton felt that Illinois is on the road to recovery in spite of Governor Walker aggressively marketing to Illinois businesses to move to Wisconsin. The Senate President said: “we have had businesses come to Illinois from Indiana. There’s a business in Wisconsin said they were coming to Illinois after Wisconsin turned down federal dollars for high speed rails.” ^[1] Cullerton has been on the record criticizing Walker over turning down money for high speed rail. ^[3]

The Senate President cites economic growth in the Land of Lincoln on the basis of reduced unemployment for eight straight months and a massive public works program that has put people to work towards fixing the state’s aging infrastructure. Despite Illinois currently has a $15 billion dollar budget deficit, Cullerton thinks the mandatory spending caps put in the tax increase will improve the state’s fiscal situation. ^[1]

Governor Walker has not issued a comment on the interview. ^[4]

By Kyle Maichle

SPRINGFIELD, Illinois: On an action-packed last day of lame duck session in the Illinois General Assembly, lawmakers labored through long hours to pass the largest tax increase in state history. ^[1]

During the afternoon of January 11, 2011, the State House approved a 67 percent income tax increase on a narrow 60 to 57 vote. This raises the flat income tax of 3 percent up to 5 percent. Also, the state’s base corporate tax was increased from 4.8 to 7 percent. In the previous days leading up to vote, Democrat lawmakers were undecided on raising the income tax up to 5 or 5.25 percent. ^[1]

During an emotionally charged debate on the House floor, Representative Barbara Flynn Currie (D-Chicago) argued the merits for raising the taxes by saying: “it’s time for us to be adults, face the crisis, and figure out a solution.” However, Rep. Roger Eddy (R-Hutsonville) blasted the proposal by saying that: “we’re saying to the people of Illinois for eight years we’ve overspent, now we’re going to make it your problem.” ^[1]

In the late night hours, the State Senate had their turn to consider the tax hike. Before the Senate casted their votes, State Rep. David Miller collapsed while watching fellow lawmakers debate the proposal. The Chicago Sun-Times reported that Miller was released from Springfield’s St. John’s Hospital at 6:00 AM the next morning according to hospital spokeswoman Sherry Puccetti. Puccetti said that Miller had a case of dizziness. ^[2]

When the Senate resumed debate, Minority Leader Christine Radogno blasted Democrats for not doing enough to streamline Illinois government. Radongo said: “the one thing that’s lacking in this bill is any specifics about how we’re going to retool state government.” However, Senate President John Cullerton warned to lawmakers that: “we are in desperate need to improve our bond ratings. We will do that by raising this money (taxes)”. The Senate approved the tax increases on a close 30-29 vote at 1:20 AM-CST.

Organizations representing businesses in Illinois, including the Illinois Manufacturers’ Association, argue that raising taxes would be counterproductive to needed job growth in the state. John O’Hara of the Illinois Policy Institute said taxpayers would lose out on new federal tax reductions as a result of Illinois raising taxes. O’Hara said: “the average Illinois family would save about $800 in taxes. That’s essentially wiped out now.” ^[1]

A spokesperson for Governor Pat Quinn said that he would sign the tax increase bill into law as soon as possible. ^[1]

DENVER, Colorado: The Colorado Center on Law and Policy has filed an initiative with state officials, however according to the organization the initiative is a test to determine whether the state’s Title Setting Review Board will rule that the measure complies with the constitution’s single-subject requirement. The measure, however, is drawing some concern. Some argue that it might be a firm proposal for a tax-hike increase and disagree with the proposed measure.^[1]

According to the proposed measure: a graduated corporate and individual income taxes would be implemented; the state’s sales tax would be lowered from 2.9 cents to 2.7 cents; the sales tax would be extended to include services; business-to-business services and health care would not be taxed; and would repeal the prohibition of a statewide property tax and local income taxes in the Taxpayer’s Bill of Rights. ^[1]

However, Carol Hedges, director of the Colorado Fiscal Policy Institute a part of the Colorado Center on Law and Policy, stressed that the initiative is only a test. “This is part of a research effort to determine what are the possible options that can be presented to voters to address the state’s long-term fiscal situation,” said Hedges. ^[1]

The Title Setting Review Board is expected to hear the measure on December 15. An automatic re-hearing is scheduled for January 5, 2011. ^[1]

According to reports, it is expected that the measure will result in a lawsuit.