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Tax Law

State Net Capitol Journal – October 12, 2015; Utah’s Gas Tax Hike Strategy

Budget & Taxes

UT’s Gas Tax Hike Strategy

Nearly every state in the nation is struggling to maintain its aging transportation system. But Utah is one of just seven states (the others are Georgia, Idaho, Iowa, Nebraska, South Dakota and Washington) that passed a gas tax increase this year to help with that task, according to the left-leaning Citizens for Tax Justice.

So how did that happen in a conservative, Republican state where the gas tax hadn’t been raised in nearly two decades? According to Utah Gov. Gary Herbert (R), it happened through the forging of a coalition of business, industry, religious and education groups united in the common goal of making it easier for people to move around the state.

“You have to set the table and then you have to deliver,” he said.

The setting of the table reportedly involved two years or more of coalition building in support of raising money for infrastructure projects. The delivering consisted of passing a bill (HB 362) raising the state’s 24.5 cents-per-gallon gas tax by roughly 5 cents. And the first step was key to the second.

“It made it easier politically, for the Legislature to do it with the support of the business community and the Chamber of Commerce, education and others out there who are stakeholders and endorsed a commonsense adjustment in our taxation for transportation,” Herbert said.

Utah also had the benefit of a Statewide Transportation Improvement Plan, which lays out the infrastructure that needs to be built or repaired over the next five years and prioritizes those projects.

“They got a lot of different stakeholders to weigh in and produced a document that is guiding their decisions, and their goal to raise these additional funds and commit these dollars to transportation,” said Sean Slone, director of transportation and infrastructure policy for the Council of State Governments. “It was a universal effort, and legislators and other folks really tout this as a founding document.”

But Slone said while Utah’s approach to passing a gas tax hike might be a good model for some states, it wouldn’t necessarily work for all of them.

“They sort of have a unique process in Utah,” he said. (STATELINE.ORG, UTAH STATE LEGISLATURE, LEXISNEXIS STATE NET)

NJ Considering Tax Break for Entertainers

New Jersey lawmakers are getting creative in their efforts to rescue struggling Atlantic City. A bill (SB 2721) approved by the Senate’s State Government, Wagering, Tourism & Historic Preservation Committee last week would exempt “A-list performing artists” who do at least four shows in Atlantic City’s tourism district from state income taxes on the earnings from those performances or any others in the state during the same calendar year.

Sen. Jim Whelan (D) said big-name performers could draw people who otherwise might not consider visiting the city, helping “pump revenue into the local and state economy.” And Senate Minority Leader Tom Kean Jr. (R) said the 50,000-plus people that packed the beach in Atlantic City this summer to see the pop rock band Maroon 5 “gives a glimpse of how Atlantic City can transform into a premier entertainment destination.”

But the left-leaning group New Jersey Policy Perspective called the bill “misguided,” saying performers don't choose concert venues on the basis of tax rates but on where they’ll attract an audience. And in a statement, the group’s president, Gordon MacInnes, said the bill provides a tax break to those who need it least.

“New Jersey needs funds to invest in the proven assets that bring better times to all New Jerseyans,” he said. “This bill just shrinks the dwindling pot.” (NJ.COM)

Gulf Oil Spill Settlement Swells

The U.S. Justice Department has reached a $20.8 billion final settlement with BP over its role in the 2010 Gulf of Mexico oil disaster. That sum is $2.1 billion bigger than the $18.7 billion initial settlement announced in July, which was already the largest environmental settlement, as well as the largest civil settlement with a single entity, in U.S. history.

U.S. Attorney General Loretta Lynch said the filing of the final settlement was “a major step forward in our effort to deliver justice to the gulf region in the wake of the Deepwater Horizon tragedy - the largest environmental disaster our nation has ever endured.” She also said the higher total was the result of a “refining of the numbers” of the initial settlement.

The settlement includes $8.8 billion for restoration projects in the five gulf states - Alabama, Florida, Louisiana, Mississippi and Texas - over the next 15 years. Louisiana, the hardest hit of those states, would receive $5 billion of that amount. (NEW YORK TIMES)

Budgets In Brief - October 12 2015

OR Tax Refund Kicking In: OREGON will give taxpayers $402 million in rebates on their 2015 returns, thanks to the state’s kicker law, which requires the state to give taxpayers their money back whenever revenues exceed the forecast made at the start of each two-year budget cycle by 2 percent or more. The last time the law kicked in was in 2007 (OREGONIAN [PORTLAND]). * AK Savings Earnings Plunge: ALASKA’s Permanent Fund earned about $2.6 billion in the fiscal year that ended June 30. But those earnings on the state’s $60 billion in savings, which include investments in stocks, private equity and real estate, were down 70 percent from 2014’s record $8 billion gain (ALASKA DISPATCH NEWS [ANCHORAGE]).

- Compiled by KOREY CLARK

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