Budgets In Brief - February 6 2017

Indian Gaming Boosting OK Economy

Native American tribes have paid the state of OKLAHOMA over $1 billion in exclusivity fees since 2006, according to a report from the Oklahoma Indian Gaming Association. The report also indicated that tribal gaming contributed $4.75 billion to the state’s economy in 2015, comprising 3 percent of total private production. (ASSOCIATED PRESS)

KS Revenues Up But State Still in Big Budget Hole

KANSAS collected about $24 million more in revenues in January than expected, marking the third consecutive month that revenue has met or exceeded projections. But the windfall has only put a small dent in the state’s $310 million budget shortfall for the current fiscal year. (TOPEKA CAPITAL-JOURNAL)

WI Gov Reversing Course on Tax Program for Working Poor

WISCONSIN Gov. Scott Walker (R) wants to return the more than $20 million per year he cut from the Earned Income Tax Credit program for the working poor in 2011, as well as make it more advantageous for parents with only one child and married couples. That proposal is part of a broader budget package aimed at strengthening families and marriage. (MILWAUKEE JOURNAL SENTINEL)

Amazon to Collect Sales Taxes from 10 More States

Internet retailer Amazon is adding 10 more states to the list of those from which it will collect sales taxes, bringing the total to 39. The 10 states are IOWA, LOUISIANA, MISSISSIPPI, MISSOURI, NEBRASKA, RHODE ISLAND, SOUTH DAKOTA, UTAH, VERMONT and WISCONSIN. (CNBC.COM)

 

 

-- Compiled by KOREY CLARK

TX Gov. Blocks Funding to ‘Sanctuary City’

Texas Gov. Greg Abbott (R) blocked $1.5 million in state funding for courts, crime victim services and other programs in Austin, the state’s most liberal city, after the city’s sheriff, Sally Hernandez, a Democrat, announced that jails there would no longer honor immigration holds, except in cases involving human trafficking, aggravated sexual assault and murder.

 

Abbott’s action came a day after he delivered a State of the State address declaring a ban on “sanctuary cities” an urgent legislative priority. He has called for laws that go even further than President Donald Trump’s new executive actions in opposition to sanctuary policies, including the power to remove local officials in the state who fail to comply with federal immigration detainers.

 

But Judge Sarah Eckhardt of Travis County, where Austin resides, stated in a letter to the governor that she was confident Sheriff Hernandez was not in violation of the law.

 

“I am certain you have come to the same conclusion; else you would not be seeking to change current State law to put all Texas Sheriffs in the service of the United States Department of Homeland Security,” she wrote. (ASSOCIATED PRESS)

Some States Better Positioned than Others for Fiscal Downturn

Twenty-five states ended the 2016 fiscal year with revenue collections that were below projections, and nearly that many were already forecasting shortfalls for the current fiscal year only months after it had begun, according to the National Association of State Budget Officers. But if another recession or a federal policy change with major fiscal ramifications is on the way, states like California, Georgia, Idaho and Utah that have avoided making deep tax cuts, enacted targeted tax increases, built up cash reserves and been cautious when making predictions about the economy and revenue collections will likely be better positioned to deal with it than others.

 

California projects it will be running a $1.6 billion deficit by next summer. But Gov. Jerry Brown (D) still wants to put $1.2 billion into the state’s rainy day fund, which currently stands at $6.7 billion, and to slow the growth of school spending and roll back some one-time expenses - rather than dip into those cash reserves - to plug the budget hole.

 

Georgia is one of the few states with a budget surplus, in part because its economy is growing faster than that of other states but also partly because it has avoided cutting taxes the past few years and has put money into its rainy day fund, according to Wesley Tharpe, research director for the left-leaning Georgia Budget and Policy Institute. The state’s Republican governor, Nathan Deal, has proposed a record $25 billion budget calling for increased spending for law enforcement and education and no tax hikes.

 

Kansas, meanwhile, has been struggling with budget deficits since enacting major tax cuts in 2012 and 2013. Gov. Sam Brownback (R) is now proposing raising excise taxes and diverting money from the state’s transportation fund to address $1.1 billion in budget gaps through June 2019.

 

Utah, another state in the black, has a tradition of “prudent fiscal management” that includes “budget stress-testing,” studying the effects that various economic scenarios, including a recession, would have on the state’s finances and budgeting accordingly, according to Phil Dean, the state’s budget director and chief economist.

 

The downside of a surplus, however, is that it increases the pressure to spend it. For instance, Utah’s business community wants Gov. Gary Herbert (R) and state lawmakers to spend more on education because businesses locating to the state are increasingly in need of a more educated workforce. And in nearby in-the-black Idaho, some lawmakers are calling for the state to return much of a projected $130.8 million budget surplus to taxpayers. (STATELINE.ORG, NATIONAL ASSOCIATION OF STATE BUDGET OFFICERS, LOS ANGELES TIMES)

States Not Budgeting For Repeal Of Obamacare

Last month the Republican-controlled U.S. Senate passed a budget resolution allowing for the repeal of parts of the Affordable Care Act (ACA). And on his first day in office, President Donald Trump signed an executive order providing for the dismantling of that law.

 

But states aren’t taking a partial or total repeal of the ACA into account in their proposed budgets for the coming fiscal year. At most they’re only acknowledging it’s a possibility, while maintaining that too little is known to plan an appropriate course of action.

 

“The incoming presidential administration and leaders in Congress have suggested major changes to the program,” states the budget proposed by California Gov. Jerry Brown (D). “At this point, it is not clear what those changes will be or when they will take effect. As such, the Budget continues to reflect existing state and federal law.”

 

The budget proposed by New York Gov. Andrew Cuomo (D), likewise, states: “It is not possible at this time to assess the potential fiscal impact of policies that may be proposed and adopted by the new administration and Congress.”

 

The states most vulnerable to major changes to the ACA are the 31 that expanded Medicaid under the law, which provided 100 percent of the funding for it. Repeal of the law without a replacement for that money would leave states in the position of having to come up with billions of dollars in replacement funding or drop millions of people from the program.

 

Matt Salo, executive director of the National Association for Medicaid Directors, said, “rolling back a Medicaid program has only happened twice before, and that was at the state level.”

 

“This would be the feds walking away,” he said.

 

Trump and Republicans in Congress both actually favor converting Medicaid funding to block grants, giving states greater flexibility to determine who is eligible for and what services are covered under the program. A lot would depend on the size of those grants.

 

Medicaid isn’t the only thing that could change. The ACA also provides financial incentives for providers to update their IT systems.

 

“Those IT systems impact more than just our Medicaid program and that’s true even for states that didn’t expand,” said Loren Anthes, a Medicaid fellow at the Center for Community Solutions. “Trust me, states do not want to go through another IT procurement process.”

 

The expansion of Medicaid has also helped many addicted to opioids and other drugs.

 

“The amount of money in our Medicaid program that goes towards substance abuse help, it’s incomparable,” said former Ohio Medicaid director John Corlett, who estimates that 200,000 of the 700,000 residents who received coverage under that state’s Medicaid expansion struggle with addition. “To rip out the financing arrangements for that would be devastating.” (GOVERNING, NATIONAL PUBLIC RADIO, WASHINGTON POST)

Politics In Brief - February 6 2017

AR Revives Voter ID Law

ARKANSAS’ Republican-controlled House approved a voter ID bill last week (HB 1047) that is nearly identical to a voter ID law unanimously struck down by the state’s Supreme Court in 2014. Four of the justices in that case are no longer on the court, and one of the new justices used to be a Republican legislator. (ASSOCIATED PRESS, ARKANSAS DEMOCRAT-GAZETTE [LITTLE ROCK], LEXISNEXIS STATE NET)

‘Calexit’ Backers to Begin Collecting Signatures

CALIFORNIA’s secretary of state’s office gave the go ahead for supporters of a proposed constitutional amendment providing for California’s secession from the United States -- an effort that begin within days of President Donald Trump’s election -- to begin collecting voter signatures to qualify it for the 2018 ballot. But although a recent Reuters/Ipsos poll showed that roughly one in three Californians support the “Calexit” idea, even if the measure qualifies for the ballot and is passed by voters, secession would likely require an amendment to the U.S. Constitution, in turn requiring approval of two-thirds of Congress and three quarters of the states. (SACRAMENTO BEE)

Federal Court Strikes Down WI Redistricting

A U.S. District Court in WISCONSIN has ruled that the legislative district lines drawn by the state’s Republican-controlled Legislature in 2011 are unconstitutional and must be redrawn by Nov. 1, so they are in place for the November 2018 election. The state is likely to appeal that decision. (WISCONSIN PUBLIC RADIO)

Supreme Court Denies Appeal of TX Voter ID Case

The U.S. Supreme Court declined to hear TEXAS’ appeal of a lower court decision striking down the voter ID law passed by the state in 2011 on the grounds that it discriminates against minorities. But Chief Justice John Roberts said the state could appeal the case in the future, after additional proceedings in the lower courts. (TEXAS TRIBUNE [AUSTIN], NEW YORK TIMES)

AL Legislative Districts Ruled Unconstitutional

A three-judge panel of the 11th U.S. Circuit Court of Appeals has ruled that 12 of ALABAMA’s legislative districts are unconstitutional. The panel said the state improperly used race in creating those districts. (MONTGOMERY ADVERTISER)

 

-- Compiled by KOREY CLARK