Budget and Taxes

Experts Say NJ All Wrong on Business Tax Incentives

New Jersey senators who convened a hearing this month to try to figure out what’s wrong with the state’s scandal-ridden business tax incentive program -- which expired at the end of June and Gov. Phil Murphy (D) refused to extend last month -- got an earful from the experts who gave testimony.

T.J. Bartik, a senior economist at the W.E. Upjohn Institute for Employment Research, told the special Senate Committee on Economic Growth Strategies that incentives rarely pay for themselves.

“Probably at least 90 percent of any increase in tax revenue due to inducing job creation are offset by increased public service costs, as new jobs will attract population who will require more spending on infrastructure, education, police and fire services, and other public services,” he said.

Jackson Brainerd, a policy specialist for the National Conference of State Legislatures, told the committee that few states evaluate their incentive programs regularly, and such programs may actually do more harm than good.

“There is no evidence the number of economic tax incentives bear any relation to the broader performance of a state’s economy,” he said. “And there is quite a bit of evidence that tax incentives often fail to achieve their stated goals and can have a negative impact on a state’s fiscal health.”

Michael Lahr, director of Rutgers Economic Advisory Service, meanwhile, told the committee that taxes aren’t “as critical as other cost items to businesses.”

“The costs of labor, logistics, and space are much more important,” he said. “Items like energy costs and taxes are lower on the list.”

Still Lahr noted that as the auction Amazon held to determine the location of its second U.S. headquarters demonstrated, “firms select a general region in which they wish to locate based on gross criteria like supply chains and markets and then, after, select among jurisdictions within that region that present lowest costs.”

“We need to keep up with the Jones’,” he said. (NJ.COM, INSIDER NJ [VERONA])


States Launch Antitrust Investigation of Google

The attorneys general of every state but Alabama and California have officially launched an antitrust investigation of Google.

Standing on the steps of the U.S. Supreme Court along with officials from 11 other states and the District of Columbia last week, Texas Attorney General Ken Paxton (R) said the tech giant “dominates all aspects of advertising on the Internet and searching on the Internet.”

“They dominate the buyer side, the seller side, the auction side and the video side with YouTube,” he said.

Paxton stressed that for now the states weren’t undertaking a lawsuit but an investigation, the initial focus of which would be Google’s online advertising. The company is expected to do $48 billion in U.S. digital ad sales this year and claim 75 percent of total U.S. search-ad spending, according to eMarketer.

The state AG’s investigation comes over six years after federal regulators concluded an antitrust investigation into Google’s search and advertising practices, which resulted in no major penalties being imposed on the company. However, the European Union has levied $9 billion in competition-related fines on the company in the last three years. (WASHINGTON POST, NATIONAL PUBLIC RADIO)


Budgets in Brief - September 16 2019

NJ FACING BIG PUBLIC PENSION HIT

NEW JERSEY Gov. Phil Murphy’s (D) decision to phase in a reduction in the public pension system’s expected rate of return from 7.6 percent to 7 percent, which former Gov. Chris Christie (R) made just before he left office in 2018, could leave the state with a $6.6 billion pension payment in 2022, a $1.2 billion increase from 2021. Senate President Stephen Sweeney (D) said that fiscal hit could force a tax increase. (NJ.COM, NORTHJERSEY.COM)

OK PENSION FUND TARGET OF $4.2M CYBER THEFT

A cyber thief or thieves stole $4.2 million from the OKLAHOMA Law Enforcement Retirement System (OLERS), a pension fund for retired state troopers, park rangers and other law enforcement officers. OLERS reported that no benefits of members or their beneficiaries were impacted and that the FBI was working on getting back the missing funds, $477,000 of which had already been recovered. (OKLAHOMAN [OKLAHOMA CITY])

PROPOSED ASSAULT WEAPON BAN COULD COST FL $27M IN TAX REVENUE

A constitutional amendment proposed for FLORIDA’s November 2020 ballot that would ban the possession of assault weapons could cost the state $26.9 million in tax revenue from gun sales, according to economists. But the head of the Legislature’s Office of Economic and Demographic Research said more than half of that loss would be offset by “redirected spending,” and the impact of the weapons ban on the state’s roughly $90 billion budget would be “minimal.” (ORLANDO SENTINEL)

NUCLEAR WASTE STORAGE UNLIKELY REVENUE OPTION IN WY

WYOMING lawmakers exploring the possibility of storing spent nuclear fuel rods in the state as a way of generating revenue learned this month that the move would only net the state an additional $10 million a year from the federal government. Lawmakers said that sum raised serious doubts about the idea’s viability. (CASPER STAR-TRIBUNE)

AUSTIN SNUBS TX ABORTION FUNDING BAN

Last week the City Council of Austin, TEXAS approved an amended budget for next year that sets aside $150,000 to pay the travel, lodging, childcare and other incidental expenses of women seeking abortions. The city’s action came just days after a new state law (SB 22) went into effect barring state and local governments from giving taxpayer dollars to abortion providers like Planned Parenthood. (TEXAS TRIBUNE [AUSTIN])

-- Compiled by KOREY CLARK

 

Politics and Leadership

Veto Override Sparks More Controversy in NC

Just over a week after legislative district maps drawn by North Carolina’s GOP-controlled General Assembly were declared unconstitutional by a judicial panel, there was more political controversy in the state last week over a budget veto override in the House.

The state has been operating without a full budget since July 1. In June Gov. Roy Cooper (D) vetoed the spending plan approved by lawmakers because it failed to expand Medicaid. And Republicans have lacked the votes for an override in either chamber, until last Wednesday, Sept. 11, when most Democrats weren’t in the House chamber, evidently believing there would be no vote session that day because a Republican House leader had told them so.

House Speaker Tim Moore (R) took the opportunity to call for an override vote on the budget, which, without significant Democratic opposition, passed 55-9 in the 120-member chamber.

Rep. Deb Butler, one of the few Democrats in the chamber at the time, grabbed a microphone and laid into Moore.

“How dare you do this, Mr. Speaker!” she said. “If this is the way you think democracy works, shame on you. This is not appropriate and you know it. The people of North Carolina, you will answer to the people of North Carolina.”

Cooper, who had been attending a 9/11 memorial when the override vote took place, also blasted Republican leadership at a news conference later in the day.

“On a day when tragedy united our country, we should be standing together despite party,” he said. “But instead Republicans pulled their most deceptive stunt yet.”

The GOP leader the Dems said told them there would be no votes denied having done so. And Moore said his action should have come as no surprise to anyone.

“I’ve made it clear,” he said. “I’ve said right here from where I am, on the floor, everywhere, if I see an opportunity to override this budget, this veto, I was going to take that vote.”

The budget still requires an override in the Senate to pass, although Republicans only need the support of one of that chamber’s 21 Democrats to reach the supermajority necessary.

But the vote in the House, which Bulter called “scorched earth politics,” may have longer-lasting effects.

“If we can’t trust each other, this place will fall apart, it’s just too big an entity to run, too many processes to require for everything to be in writing,” said Rep. Darren Jackson, Democratic leader of the House. (NATIONAL PUBLIC RADIO, RALEIGH NEWS & OBSERVER, NBC NEWS)


Justice’s Dissent Provides Blueprint for Ending Gerrymandering

The U.S. Supreme Court’s 5-4 ruling this year in Rucho v. Common Cause slammed the door on partisan gerrymandering claims under the U.S. Constitution. In his opinion for the majority, Chief Justice John Roberts maintained that it wasn’t possible for federal judges to determine “when political gerrymandering has gone too far.”

But in her dissenting opinion, Justice Elena Kagan pointed out that plenty of lower courts had done precisely that, by employing a three-part test. First, they asked whether the party that drew the map had sought to solidify its power by diluting votes for its opponents. Next, they asked whether the effort was successful. And then, they asked whether there was any valid, nonpartisan reason for that effort. If the answers to the first two questions were affirmative and the answer to the third question was negative, the map was thrown out.

The notion that Kagan’s dissent might serve as a blueprint for state judges to crack down on partisan gerrymandering with their own constitutions was borne out by the ruling from a North Carolina court this month declaring a Republican-drawn state legislative map an unconstitutional partisan gerrymander. That decision relied on the very three-part test Kagan described. (SLATE, REUTERS)


Politics in Brief - September 16 2019

GOP WINS SPECIAL ELECTION IN NC

Republican Dan Bishop defeated Democrat Dan McCready 50.7 percent to 48.7 percent in a special election last week in NORTH CAROLINA's 9th Congressional District. The election, which was called due to allegations of fraud in the race for the seat last year, was closely watched as a referendum on President Trump, who campaigned on Bishop’s behalf. (NBC NEWS)

RECALL REFORM COULD BE COMING TO CO

A push for legislation next year to reform COLORADO’s recall process is coming from both sides of the aisle. A state representative, three state senators, including Senate President Leroy Garcia, and Gov. Jared Polis, all Democrats, have been targeted by recall efforts this year. (COLORADO SUN [DENVER])

-- Compiled by KOREY CLARK

 

Governors

Cuomo Seeks NY Ban on Flavored E-Cigs

Calling the rise in vaping-related illnesses “a frightening public health phenomenon,” New York Gov. Andrew Cuomo (D) proposed legislation to ban the sale of flavored e-cigarettes in the Empire State.

“Common sense says if you do not know what you are smoking, don’t smoke it, and right now we don’t know what you are smoking in a lot of these vaping substances,” Cuomo said in announcing the proposal.

The governor said he has ordered the New York Department of Health to open an investigation into vaping companies to ascertain what is in the chemicals they sell to vapers. The agency will also require smoke shops to “post a warning that lets people know that this is a risky activity.”

Cuomo’s proposal comes in the wake of an announcement from U.S health officials that at least 450 people across 33 states have recently become seriously ill after vaping.

New York could become the second state to ban the flavored e-cigarettes. Michigan Gov. Gretchen Whitmer (D) issued an executive order instituting “an all-out ban” on the products on September 4. New Jersey Gov. Phil Murphy (D) also issued an executive order (EO No. 84) last week to create a vaping task force to develop recommendations on future vaping policies in the Garden State. 

Vaping has jumped dramatically in popularity among high schoolers in recent years, with as many as 21 percent saying they had tried it according to a report by the National Institute on Drug Abuse. That number marks a 10 percent increase from the previous year.

The governors and other advocates for curbing flavored vaping products got a huge boost last week when President Donald Trump said his administration will also work to implement a federal ban.

“Vaping has become a very big business, as I understand it, but we can’t allow people to get sick and allow our youth to be so affected,” Trump said.

“The Trump Administration is making it clear that we intend to clear the market of flavored e-cigarettes to reverse the deeply concerning epidemic of youth e-cigarette use that is impacting children, families, schools and communities,” Health and Human Services Secretary Alex Azar said in a statement. “We will not stand idly by as these products become an on-ramp to combustible cigarettes or nicotine addiction for a generation of youth.” (U.S. FOOD & DRUG ADMINISTRATION, NEW YORK GOVERNOR’S OFFICE, CBS NEWS, NPR)


Noem Just Says No to SD Hemp

South Dakota Gov. Kristi Noem (R) warned lawmakers planning another attempt at legalizing industrial hemp that a new bill will meet the same fate as this year’s bill: a veto.

In her veto statement for HB 1191 last March, Noem said “There is no question in my mind that normalizing hemp, like legalizing marijuana, is part of a larger strategy to undermine enforcement of the drug laws and make legalized marijuana inevitable.”  

Noem contends that police do not have the testing capability to discern between marijuana and industrial hemp, which looks like weed but has only 0.3 percent THC, not enough to get anyone high. In a Wall Street Journal op-ed last week, she called hemp legalization “a social experiment” that is bound to “end poorly.”

After failing by just a few votes to override this year’s veto, House Majority Leader Lee Qualm (R), head of the Legislature’s Industrial Hemp Study Committee, said legislators will have a new hemp bill ready for next session and are currently working to gain the votes to override another veto. (SIOUX FALLS ARGUS LEADER, REUTERS, WALL STREET JOURNAL, MARIJUANA BUSINESS DAILY)


Governors in Brief - September 16 2019

VA GOV VOWS END TO LAWSUITS AGAINST PATIENTS

VIRGINIA Gov. Ralph Northam (D) said he would work with University of Virginia James Ryan to end the widespread practice of aggressively pursuing former patients for unpaid medical bills. A recent investigation by Kaiser Health News revealed that that UVA sued former patients for unpaid bills more than 36,000 times over a six year period. Those suits sought repayment of over $106 million, often pushing families into bankruptcy. (KAISER HEALTH NEWS, WASHINGTON POST)

MURPHY ORDERS NEW NJ GUN RESTRICTIONS

NEW JERSEY Gov. Phil Murphy (D) issued Executive Order No 83, which directs the state Division of Purchase and Property to request from gun retailers and manufacturers proof they are adhering to the order’s public safety stipulations, such as preventing “sales to prohibited individuals,” safeguarding ammo and firearms from being stolen and providing proper training to vendors. (FOX BUSINESS, NEW JERSEY GOVERNOR’S OFFICE)

DEM GOVS URGE FEDS TO ACT ON GUN CONTROL

A dozen Democratic governors signed a letter to President Donald Trump urging federal action on gun control, saying “a patchwork of state laws will never be a substitute for coherent national policy.” The letter urged the president and Congress to endorse a national “red flag” law aimed at preventing high-risk individuals from obtaining weapons, as well as banning high-capacity ammunition magazines and assault-style weapons. The letter was signed by governors from CALIFORNIA, CONNECTICUT, DELAWARE, ILLINOIS, MICHIGAN, NEW JERSEY, NEW MEXICO, NEW YORK, OREGON, PENNSYLVANIA, RHODE ISLAND, and WASHINGTON. (HARTFORD COURANT, NEW YORK GOVERNOR’S OFFICE)

BAKER HINTS AT MA DIGITAL HEALTH DATABASE

MASSACHUSETTS Gov. Charlie Baker (R) announced last week that the Bay State would invest $6.7 million in capital funding into nine projects focused on imaging, cancer, neuroscience and drug discovery research. Baker also hinted that he would introduce legislation furthering efforts to create a statewide digital health record database. (STATE HOUSE NEWS SERVICE [BOSTON], MASSLIVE)

NM GOV TASK FORCE OPPOSES STATE-RUN POT SALES

A task force created by NEW MEXICO Gov. Michelle Lujan Grisham (D) suggested last week that the state license and regulate private companies to grow and sell recreational marijuana, rather than having the state operate and control those operations. Cities would retain power over issues like zoning and the number of stores allowed in a given area. Albuquerque City Councilor Pat Davis, who heads the working group, called the proposal “a compromise between letting experts regulate the industry and letting cities decide how they’re going to operate.” The group will make its official presentation to Lujan Grisham in October. (LAS CRUCES SUN NEWS, DURANGO HERALD)

-- Compiled by RICH EHISEN

 

Hot Issues

Business - September 16 2019

SPONSOR OF CALIFORNIA SB 51 PULLS BILL

The sponsor of CALIFORNIA SB 51, a bill that would allow banks and credit unions to do limited business with legal cannabis companies, pulls the measure before it can come up for a vote, turning it into a two-year bill that will be reintroduced next year (SACRAMENTO BEE)

CALIFORNIA GOVERNOR SIGNS SB 271

CALIFORNIA Gov. Gavin Newsom (D) signs SB 271, which expands unemployment benefits, state disability insurance and family leave benefits for Golden State film crews whose jobs take them to other states. The law takes effect in January (LEXISNEXIS STATE NET).

CALIFORNIA ASSEMBLY GIVES APPROVAL TO AB 5

The CALIFORNIA Assembly gives final approval to AB 5, a bill that would codify a state Supreme Court ruling that imposes a strict three-part standard for determining if workers are employees or independent contractors. The measure moves to Gov. Gavin Newsom (D), who has indicated both that he will sign it (LEXISNEXIS STATE NET).

CALIFORNIA ASSEMBLY GIVES FINAL APPROVAL TO AB 1482

The CALIFORNIA Assembly gives final approval to AB 1482, a rent control measure that will cap annual rent increases to 5 percent plus inflation. Tenants will also receive legal protections from being evicted without just cause. The measure moves to Gov. Newsom, who helped negotiate the bill and has said he will sign it into law. It will go into effect on Jan 1 2020 (CALIFORNIA GOVERNOR’S OFFICE).


Education - September 16 2019

CALIFORNIA GOVERNOR SIGNS SB 419

CALIFORNIA Gov. Gavin Newsom (D) signs SB 419, which permanently prohibits willful defiance suspensions in grades four and five and bans such suspensions in grades six through eight for five years. The measure takes effect on July 1, 2020 (SACRAMENTO BEE).

CALIFORNIA LEGISLATURE GIVES FINAL APPROVAL TO AB 61

The CALIFORNIA Legislature gives final approval to AB 61, which would expand the state’s “red flag” law to allow teachers, school administrators and employers to petition the courts to take guns away from people they see as a danger to themselves or the public. The measure heads to Gov. Newsom for consideration (LOS ANGELES TIMES).

CALIFORNIA SENATE GIVES FINAL APPROVAL TO SB 206

The CALIFORNIA Senate gives final approval to SB 206, which would allow college athletes to be paid for the use of their name, image and likeness. The measure moves to Gov. Newsom for consideration (LEXISNEXIS STATE NET).

NEW YORK GOVERNOR SIGNS SB 4166

NEW YORK Gov. Andrew Cuomo (D) signs SB 4166, which requires Empire State public schools to observe a moment of silence at the beginning of the school day every 9/11 to encourage dialogue and education about the September 11, 2001 attacks on New York City and Washington D.C. (NEW YORK POST).


Environment - September 16 2019

CALIFORNIA ASSEMBLY GIVES FINAL APPROVAL TO AB 342

The CALIFORNIA Assembly gives final approval to AB 342, which would bar new oil and gas wells in national parks and other protected areas in the Golden State. It moves to Gov. Gavin Newsom (D), who is expected to sign it into law (LEXISNEXIS STATE NET).

CALIFORNIA ASSEMBLY GIVES FINAL APPROVAL TO AB 44

The CALIFORNIA Assembly gives final approval to AB 44, which would make the Golden State the first to ban the sale of fur items made from undomesticated animals. The measure moves to Gov. Newsom for consideration (LEXISNEXIS STATE NET).

NEW HAMPSHIRE GOVERNOR SIGNS SB 76

NEW HAMPSHIRE Gov. Chris Sununu (R) signs SB 76, legislation that bars oil and gas drilling in the waters off the Granit State coast. The measure also bars the building of any on-shore infrastructure intended to aid in such exploration (FOSTERS).


Health & Science - September 16 2019

CALIFORNIA GOVERNOR SIGNS SB 276 AND SB 714

CALIFORNIA Gov. Gavin Newsom (D) signs two vaccine-related measures: SB 276, which would allow the state to investigate doctors who grant more than five medical vaccine exemptions in a single year, and SB 714, which allows a medical exemption granted before Jan. 1, 2020 to remain in place until the exempted child enrolls in the next grade span (LOS ANGELES TIMES).

MICHIGAN HOUSE APPROVES HB 4372, HB 4373 AND HB 4378

The MICHIGAN House approves a trio of sexual assault-related bills: HBs 4372 and 4373, which together would revoke the licenses of doctors convicted of sexual assault, and HB 4378, which would ban disclosure of the names of people filing civil actions alleging sexual misconduct under public records laws. The measures all move to the Senate (MICHIGAN DAILY). 


Immigration - September 16 2019

CALIFORNIA ASSEMBLY GIVES FINAL APPROVAL TO AB 589

The CALIFORNIA Assembly gives final approval to AB 589, which makes it a crime for an employer to confiscate a worker’s immigration documents as a way to force them into labor. The measure, which also requires employers to post notice of workers’ rights, moves to Gov. Gavin Newsom (D) for consideration (LEXISNEXIS STATE NET).


Social Policy - September 16 2019

FEDERAL JUDGE IN NORTH DAKOTA BLOCKS STATE LAW

A federal judge in NORTH DAKOTA blocks a state law enacted earlier this year that required physicians to tell women they may reverse a so-called medication abortion if they have second thoughts. State officials are weighing an appeal (NEW YORK TIMES).

CALIFORNIA SENATE GIVES FINAL APPROVAL TO SB 313

The CALIFORNIA Senate gives final approval to SB 313, which would ban circuses from using bears, tigers, elephants, monkeys or other wild animals in their acts. The bill moves to Gov. Gavin Newsom (D) for consideration (LOS ANGELES TIMES).

CALIFORNIA ASSEMBLY GIVES FINAL APPROVAL TO AB 1215

The CALIFORNIA Assembly gives final approval to AB 1215, which would impose a three-year ban on law enforcement’s use of facial recognition programs in officer body cameras. The measure moves to Gov. Newsom (LEXISNEXIS STSTE NET).


Local Front - September 16 2019

CALIFORNIA SENATE GIVES FINAL APPROVAL TO SB 330

The CALIFORNIA Senate gives final approval to SB 330, which would temporarily ban cities from imposing a moratorium on new housing construction, prohibit the changing of local zoning laws to outlaw denser housing like apartment buildings and bar cities from raising fees during the development approval process. The bill moves to Gov. Gavin Newsom (D) for consideration (CALMATTERS).

NEW YORK CITY MAYOR PROPOSES LEGISLATION

NEW YORK CITY Mayor Bill de Blasio proposes legislation to provide health insurance for the survivors of all city employees who die from 9/11-related illnesses. Current city law only ensures city health coverage for the survivors of police officers, firefighters and emergency medical technicians who die from 9/11 sicknesses in active service or after retirement. At least 16 of the Council’s 51 members publicly expressed support for the proposal (NEW YORK TIMES).

-- Compiled by RICH EHISEN

 

Once Around the Statehouse Lightly

New Rule

Things at the California Capitol have been anything but peaceful of late, with controversial legislation dealing with the gig economy, rent control and vaccinations ensuring that folks on all sides have made their presence felt every day. Loudly felt. So it was a nice respite on Tuesday when a very different group arrived, one where every member was genuinely happy to see anyone and everyone that approached. One even gave this reporter a big hug! I’m not normally a big touchy-feely guy, but this time it was totally okay. Because the group was the American Kennel Club, and the advocates they brought were all of the four-legged variety with names like Auggie (who happily gave out the hugs), Coco and Zazzle. Now I’m proposing a new rule: from this day forward, any group that wants to invade the Capitol for ANY reason must be accompanied by dogs.


That’s One Way to Go Out

Some folks leave quietly; others go with both middle fingers flying. Put Jennifer Kent, director of the state Department of Health Care Services, in the latter group. I should say former director, as Kent recently announced she was leaving her post. And as the Los Angeles Times reports, her resignation came the day after she made a Facebook post referring to folks protesting a controversial vaccination bill as “flat earthers” and bemoaning that the iconic Golden Bear statue outside the governor’s office was “dripping with unvaccinated booger-eater germs.” And to be sure you got the point, she hashtagged it with “#believeinscience and “#vaccinateyourgodd*mnkids.” The editing in the last sentence was mine because our filters are real and they work. Hers apparently do not.


Who Is That Tall Man?

Riders on the Boston subway might have done a double take last week at the site of the tall, distinguished guy who looked a lot like the governor. But why would he be on the T? Doesn’t he have a car and a driver to shuttle him about town? Yes, he does. But that didn’t stop Gov. Charlie Baker – all six foot six inches of him – from taking the subway last Monday. As the Boston Globe reports, Baker rode the T to an opening ceremony for a newly renovated station in Quincy as a way to highlight the $36 million in public dollars it took to overhaul the station and prop up the oft-troubled Red Line. Asked if he would do it again, Baker said he would like to. But he also noted, with a glance at the huge entourage accompanying him, that riding it by himself is less likely.

-- By RICH EHISEN