State Net Capitol Journal – March 18, 2013

State Net Capitol Journal – March 18, 2013

Budget & Taxes

SOME LAWMAKERS PUSH FOR 'SIN TAX' ON GUNS: To some lawmakers in Congress and at least a half dozen states - particularly since the Newtown, Connecticut elementary school shooting - guns are a sin against society, like alcohol and cigarettes, and should be taxed accordingly.

"Sin taxes" date back to at least the early 1500s when Pope Leo X taxed licensed prostitutes to help support his lavish lifestyle. Today every state in the country taxes cigarettes, with the revenues being put to a variety of uses. Now as then the motivation for the tax is at least in part to discourage socially undesirable behavior, although in the latter case, more of the resources are probably going toward helping to lessen the societal impact of the "sin" at issue, through smoking cessation programs, for example.

The advocates for gun taxes are aiming to do the same thing. In Congress, U.S. Rep. Linda T. Sanchez (D) and other Democrats are pushing for a 10 percent tax on handgun sales - on top of the federal tax gun and ammunition manufacturers already pay to provide funding for wildlife conservation under a 1937 law - to fund gun buybacks and firearms safety programs. In California, Assemblyman Roger Dickinson (D) wants to impose a 5 cent tax on every bullet sold in the state to pay for mental health screenings for young children. And legislation aimed at taxing either guns or bullets has also been introduced in Maryland, Massachusetts, Nevada, New Jersey and Washington.

Massachusetts Rep. David Linsky (D), who has proposed a 25 percent tax on the purchase of both guns and ammunition to pay for mental health programs among other things, said gun owners bear some of the responsibility for funding mental healthcare just as cigarette smokers bear some of the responsibility for funding physical healthcare.

"We know that cigarette smoking has a significant public health impact," he said. "Similarly, the use of firearms has a significant public health and public safety impact."

Maryland Delegate Jon S. Cardin (D), sponsor of a bill that would impose a 50 percent tax on most ammunition and a $25 annual gun registration fee, said his bill "goes directly to the heart of the NRA argument that says we need to focus on mental health and not banning guns," although he said he also supports tougher gun restrictions.

But gun rights advocates say there's a hole in the argument that guns are like cigarettes.

"The vast, vast majority of Americans who own firearms do so with great care and a sense of serious responsibility," said Mike Bazinet, director of public affairs for the National Shooting Sports Foundation. "It is unfair to ask them to pay additional taxes to fund programs to address societal problems that stem from multiple causes.

And so goes the debate. (LOS ANGELES TIMES, TIME)

NV HOPING TO BECOME SILICON VALLEY OF INTERNET GAMING: In pushing for the bill passed last month allowing Nevada to enter into interstate online poker compacts (AB 114), Gov. Brian Sandoval (R) said it could make the state the Silicon Valley of Internet gaming.

"The potential is extraordinary," he said.

But there are significant hurdles to realizing that potential, the biggest being the liquidity issue.

"I don't think anyone would argue that there are not enough players in Nevada to provide the liquidity to really make it a profit center," said Frank Fahrenkopf, president and CEO of the American Gaming Association.

What that means is Nevada will have to secure agreements with other states to create a large enough pool of players to be profitable. That could be a challenge. California, the nation's most populous state, would be an obvious choice for an interstate gaming partnership, for example. But the state is considering an online gaming law of its own that doesn't provide for pacts with other states.

"What if no states want to sign a compact with Nevada?" asked Robert Uithoven, a political consultant for the Las Vegas Sands Corp. "You are going to have states looking into online gaming measures with populations much larger than our own. They are not going to incentivize their players to play on Nevada-based online casinos. They will set up their own [online gaming] system so they can capture that revenue, rather than sending it to Nevada."

Pete Ernaut, a consultant for the Nevada Resort Association, however, is more optimistic about Nevada's prospects for finding gaming partners, with its reputation as the "gold standard" in gaming regulation.

"We have without a doubt the most mature regulatory infrastructure," he said. "We are also going to be a very competitive state in terms of taxes and fees. We are hopeful that the combination of those two things gives Nevada a competitive leg up in making agreements with states that may have a much greater population but may have little knowledge of the regulatory infrastructure or gaming operations." (RENO GAZETTE-JOURNAL, STATE NET)

SEC ACCUSES IL OF SECURITIES FRAUD: Illinois' pension woes put the state in the national spotlight again last week when it became the second state in history to be accused of securities fraud by federal regulators. The Securities and Exchange Commission claims the state misled investors about the condition of its public pension system from 2005 to 2009, in effect, overcharging investors for bonds of lesser value than they were purported to have. However, the SEC did not didn't impose any fines or penalties, and the state agreed to a cease-and-desist order without admitting to or denying the accusations. (NEW YORK TIMES)

ID HOUSE PANEL APPROVES GIRL SCOUT COOKIE TAX BREAK: An Idaho House panel voted unanimously last week to lift the state's sales tax on Girl Scout cookies, evidently won over by the testimony of Scouts aged 9 to adult.

Connie Miller, board president of the Silver Sage Girl Scouts and president and CEO of a credit union in Boise, told the panel all six of her siblings never finished high school.

"But it was my senior Girl Scout leader who told me, 'You are going to finish high school, you are going to go to college.' It was such a tremendous impact on me."

Rep. Robert Anderst (R) said, "This is not a good organization - you guys are a great organization.... I'm fully in support of everything you guys do."

If the tax break (HB 250) is approved by the full House and Senate and signed by the governor, Hawaii would be the only remaining state to tax the Girl Scouts' annual cookie sale. (SPOKESMAN-REVIEW [BOISE], STATE NET)

BUDGETS IN BRIEF: The Christie administration has released a detailed plan for how NEW JERSEY intends to spend the $1.8 billion it will receive in federal Sandy aid. The so-called action plan, which must be approved by federal officials, includes, among many other things, money for repairing storm-damaged homes and incentives for individuals who choose not to abandon their flooded-out properties (NORTHJERSEY.COM). • WISCONSIN Gov. Scott Walker (R) signs B 14, a bill that commits $15 million in state funds for job training grants over the next two years. Public and private organizations may be required to provide matching funds for the grants, which could be used to train both new and current employees (LACROSSE TRIBUNE, WISCONSIN GOVERNOR'S OFFICE). • Saying it is time for them to "lead by example," IOWA Gov. Terry Branstad (R) urged Hawkeye State lawmakers to start paying 20 percent of their health care premiums. The governor said it is only a matter of time before state workers are required to start paying a portion of their health care premiums, so lawmakers should be willing to do so as well. House Speaker Kraig Paulsen (R) said lawmakers will discuss the issue after the session ends (DES MOINES REGISTER).

- Compiled by KOREY CLARK

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