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Tax Law

State Net Capitol Journal – August 3, 2015; Congress Settles On Highway Funding Extension

Budget & Taxes

Congress Settles On Highway Funding Extension

After battling over rival transportation funding bills for a week, with U.S. House Republicans favoring a five-month extension they passed last month and Senate Republicans preferring a longer-term plan, the House passed a three-month extension last Wednesday that the Senate was expected to approve before the end of the week, when federal transportation funding authority expired.

The inter-chamber, intra-party feud over highway funding came to a head a couple of weeks ago when House Majority Leader Kevin McCarthy (R-California) said his chamber would not take up the six-year funding bill drafted by Senate Majority Leader Mitch McConnell (R-Kentucky).

“Sen. McConnell and I work very closely together on a whole host of issues, but there are times when the Senate has to do what the Senate has to do and the House has to do what it has to do,” said House Speaker John Boehner (R-Ohio). “If you’ll notice, that doesn’t happen very often. It’s just that it’s happening this week.”

But last week Republicans in both chambers appeared to be rallying around the idea of a long-term highway bill and the passage of a three-month extension to buy them time to hammer out the details of that plan.

“I want a long-term highway bill that is fully paid for,” Boehner said after a House GOP conference meeting. “We’ve been trying to do this for four years, it’s time to get it across the finish line and I’m going to do everything I can to get to a long-term highway bill by the end of October.”

Boehner will have to wait to take up that cause until after Labor Day when Congress returns from its summer recess. (HILL)

Economic Benefit of Gay Marriage

The U.S. Supreme Court’s June ruling legalizing same-sex marriage nationwide was a big win for same-sex couples longing for marriage equality. But it may be a big win for the national economy and state and local governments too.

The rush of gay and lesbian couples to the altar – and the additional spending on wedding services and travel, food and lodging for out-of-town guests - over the next three years could inject $2.6 billion into the nation’s economy, support over 13,000 jobs, and generate $184.7 million in state and local tax revenue, according to a report issued in December 2014 by the Williams Institute at the UCLA School of Law, in partnership with Credit Suisse.

The Institute’s projections varied considerably from state to state, depending largely on states’ same-sex populations. For instance, the Institute estimated that in California, which legalized gay marriage in 2008, 51,319 same-sex marriages would take place in the first three years after legalization, generating $392.3 million in total spending, $31.4 million in tax revenue and 2,178 jobs, while in North Dakota, where same-sex marriages weren’t yet legal when the Institute released its report, the figures are 280 marriages, $1.9 million in spending, $0.1 million in tax revenue and 8 jobs. (STATELINE.ORG, WILLIAMS INSTITUTE)

UT's Popular Sales Tax

Taxes generally don’t have many fans. But a sales levy in Utah seems to be catching on. Known by a host of acronyms, including RAP (Recreational, Arts and Parks), ZAP (Zoo, Arts and Parks), and PARAT (Parks, Art, Recreation, Aquatics and Trails), the city or county tax collects a penny on every $10 spent to fund the specified cultural and recreational programs.

Last year voters in Salt Lake County overwhelmingly approved a 10-year extension of the ZAP tax that generated over $20 million for cultural, recreational and zoological organizations there in 2014.

“It’s been fabulous,” said Victoria Bourns, director of the county’s ZAP program. “It’s very gratifying to live in a community where people appreciate arts and culture and are willing to put their own money toward it.”

Since Salt Lake County initially adopted the resolution instituting its ZAP tax in 1996, five other counties have followed its lead. Some counties in the state, however, have opted to let cities decide whether to adopt such taxes. That’s the approach David County has taken, and seven of its 15 cities have adopted the taxes. West Bountiful did so in 2008 and its mayor said the tax has provided funding for several parks and recreation projects, including improvements at City Park.

“It’s allowed us to provide amenities at the park and upgrade the park that there’s no way we could do otherwise in our city,” he said. “The budget just hadn’t been there for parks and recreation [before the tax].” (SALT LAKE TRIBUNE)

Budgets In Brief - August 3 2015

IL Cook County Approves Sales Tax Increase: The governing board of Cook County, ILLINOIS narrowly approved a one-cent sales tax increase that will push Chicago’s rate over that of four Alabama cities and Seattle on Jan. 1, making it the highest rate of any major U.S. city, at 10.25 percent (CHICAGO TRIBUNE). * MA Overrides Budget Vetoes: MASSACHUSETTS lawmakers overrode a series of budget vetoes by Gov. Charlie Baker (R) to restore millions of dollars in funding for kindergarten expansion and the University of Massachusetts, among other things. Lawmakers also approved a two-day tax holiday in mid-August (STATE HOUSE NEWS SERVICE [BOSTON], LEXISNEXIS STATE NET). * No Budgets In Six States: Six states -- ILLINOIS, NEW HAMPSHIRE, MASSACHUSETTS, NORTH CAROLINA, PENNSYLVANIA and WISCONSIN -- started their 2016 fiscal year on July 1 without a budget in place, according to the National Conference of State Legislatures. But only ILLINOIS and PENNSYLVANIA still haven’t passed a budget or temporary spending plan (ANNISTON STAR). * NJ Pension Plans Seek Damages: Three public employee pension funds in NEW JERSEY are seeking billions of dollars in damages from the state in a lawsuit alleging it breached contracts when it contributed less than the amount specified by the pension funding plan Gov. Chris Christie (R) signed into law in 2011. A budget shortfall forced Christie to veer from that plan last year (ASSOCIATED PRESS, PHILADELPHIA INQUIRER). * WI Approves SB 209: WISCONSIN lawmakers approved a bill (SB 209) allocating $250 million in public money for the construction of a new arena for the NBA’s Milwaukee Bucks. Gov. Scott Walker (R) proposed the idea seven months ago (MILWAUKEE JOURNAL SENTINEL, LEXISNEXIS STATE NET).

- Compiled by KOREY CLARK

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