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Budget & Taxes
Budget Surplus Surge In CA
With the state’s economy continuing to improve, California lawmakers were expecting a budget surplus this year of about $2 billion. But last week Assembly Speaker Toni Atkins (D) announced that the projected surplus had surged by as much as $8 billion over the last four months, driven partly by capital gains taxes.
Most of that windfall will go to K-12 schools, in accordance with Proposition 98, approved by the state’s voters in 1988. Some of the money will also go into the state’s rainy day fund, as required by Proposition 2, which voters approved in November. But that will still leave about a billion dollars for lawmakers and interest groups to fight over.
“We know we’re not going to get everything we want,” said Atkins. “No one ever does.” (SAN JOSE MERCURY NEWS)
MI Voters Reject Road Plan
Last Tuesday, Michigan voters rejected Proposition 1, the transportation funding measure put before them by Gov. Rick Snyder (R) and state legislative leaders. Voters made it very clear how they felt about the complicated plan, which included higher vehicle registration fees, additional funding for education and local governments, and a tax credit for the working poor, voting the measure down 80 percent to 20 percent.
Michigan political historian Bill Ballenger said that margin of defeat rivaled some of the “doozies” from the 1970s and ‘80s when a series of property tax questions were on the ballot.
“This is up there with the rest of them as one of the greatest ballot turkeys of all time,” he said.
The result is expected to touch off a fight between tea party conservatives who want to address the state’s road issue without increasing taxes and other lawmakers who still think the state’s residents will support a tax or fee increase to fix the roads. (DETROIT NEWS, DETROIT FREE PRESS)
AL House GOP Calls For Tax Hikes
The Alabama House Republican Caucus has proposed a plan to address a projected budget shortfall of $290 million for 2016. The plan calls for cost reductions, including the suspension of longevity bonuses for state employees for a year and mandatory furloughs for nonessential employees. But surprisingly, the proposal also calls for $129 million in tax and fee hikes, including a 25 cents-per-pack increase on cigarettes and a $10 increase in the vehicle title fee.
“Our budget problems did not appear overnight, and they will not magically disappear with the snap of a finger, but this plan begins to provide a fair-and-balanced, long-term solution,” said House Speaker Mike Hubbard (R).
The state’s Republican governor, Robert Bentley, proposed a plan calling for even more tax increases, $541 million worth, which he says is the amount needed to keep the budget in the black beyond just next year. Senate President Pro Tem Del Marsh (R) has proposed a plan that relies on gambling expansion. (BIRMINGHAM NEWS)
Budgets In Brief - May 11 2015
POSSIBLE DIGITAL STREAMING TAX IN AL: The ALABAMA Department of Revenue is planning to issue a rule that would impose a four-percent rental tax on digital streaming services like Netflix. The state’s legislative leaders have asked revenue commissioner Julie Magee to withdraw that plan (ASSOCIATED PRESS). * IN BALANCED BUDGET AMENDMENT: INDIANA lawmakers passed a balanced budget amendment in the final hours of their 2015 session. The measure, which would constitutionally mandate a budget that balances revenue and spending, still has to be approved by a separately elected General Assembly and the state’s voters (WFYI INDIANAPOLIS). * OH SLAMS "JOCK TAX": The OHIO Supreme Court struck down Cleveland’s “jock tax” on visiting professional athletes. The justices unanimously ruled that the city’s unusual scheme improperly taxed income that visiting players earned outside the city and deprived them of due process (COLUMBUS DISPATCH).
- Compiled by KOREY CLARK
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