Topics
Finance & Revenue
Finance & Revenue
Economic Development Trend. Economist. 3 Responses to DFW Getting Disproportionate Economic Development Funds
Why is Texas Economist Ray Perryman responding to whether or not Dallas Ft. Worth receives a disproprotionate share of economic development funds?
- Speaker Straus concerned about enterprise fund overseen by Gov. Abbott
- Gov. Abbott answers Speaker Straus concerns over enterprise fund
3 Repsonses concerning whether Dallas-Ft. Worth gets a disproportionate share of Texas economic development funds?
- Economic development funds are “certainly essential” but not the only, nor the most important criteria
- Companies also look to Workforce, infrastructure, geographic location, proximity to customers and suppliers, access to raw materials
- Dallas is a dynamic location as an airport hub with access to rail and a transportation network
Legislature Pulls Local Funding based on Statue Removal. Who. What. Where. How.
Who: The Tennessee House
What: The Tennessee House revoked $250,000 in Funding
Where: The revocation hits Memphis, which had removed Confederate statues, and directly impacts Memphis’ bicentennial celebration
How? Memphis is alleged to have acted against the State Historical Commission by moving possession of two public parks to a nonprofit
The Tennessean | House punishes Memphis for removing Confederate statues with $250,000 budget cut
SCHOOL FINANCE TREND. 3 Reasons to Support Education Savings Accounts in the Mountain Laurel State
State: Pennsylvania
An Opinion piece by Americans for Prosperity offers 3 reasons to support ESAs:
- If we can choose the right sports for our kids, we should be able to choose the right school
- nearly 1/2 of PA schools are not meeting adequacy levels in testing standards
- “Low-income children suffer disproportionately”
- more than 2/3 of Americans support ESAs
- Just look at the popularity of charter schools, ESAs could be the next educational success like charter schools are
3 Key Points. Model State Legislation. Sports Betting. Via the NBA & the MLB + the states being courted.
The states the MLB and NBA are courting for model sports betting legislation, should the US Supreme Court overturn the sports betting prohibition:
- Indiana SB 405 (2018)
- Illinois SB 2478 (2018)
- Iowa H592 (2018)
- Missouri HB 2320 (2018)
- Kansas HB2533 (2018)
- Rhode Island Governor added sports betting regulation to her budget proposal
- West Virginia SB415 (2018)
What do the leagues want?
- Fees. In an Iowa proposal the fee is labeled an integrity fee of 1% and would be paid to sports leagues, depending on how much money is wagered in the state
- Messaging. Its not revenue. Repeat, not revenue. it’s a handling fee.
- Big Picture. If all states enacted sports betting, it is estimated that handling fees for the Leagues would be $2 billion.
Leagues Could Make Billions If States Implement Sports Betting ‘Integrity Fees’
Records Show MLB, NBA Now Lobbying On Sports Betting In Nearly A Dozen States
Limiting Local Sales Tax Revenue by the White Hawthorne Blossom Conservatives
Conservatives in the Missouri Legislature are pursuing HB 2168 (2018) that will cap local sales taxes at 12%, as the cumulative sales tax rate.
How will this impact Missouri cities?
- Missouri cities see 25% of their revenues from sales tax
- Kansas City Missouri ara enclaves already have sales tax rates at 12%
KCUR | Missouri Lawmakers Trying To Limit Local Sales Tax, Kansas City Fights Back
Texas Attorney General Opinion. TRS investment policy on life insurance funded by leveraged premiums
The Opinion Request: RQ – 0221- KP (2018)
Requestor: Dan Flynn
Question for the Attorney General to Answer: Would life insurance funded by leveraged premiums, specifically Index Universal Life optimized for cash accumulation, constitute a prudent investment pursuant to Texas Constitution, Article 16, Section 67?
Why is this even a question to answer? The Constitution calls for prudent investment in securities while a Index Universal Life is a fixed investment.
Opposition Messaging on Sharing Economy Taxes in the Violet State
State: New Jersey
Opponents to taxes on ride share and short term rentals have labeled the taxes: Millennial taxes
Which taxes are being put under the “Millenial Tax” umbrella?
- ride share taxes
- short term rental taxes
- e-cigarette taxes
Why do opponents say “millenial taxes” are bad for New Jersey?
- Millenials will move away
- New Jersey’s economic future is at risk
- The number of New Jersey people between 22 to 34 is down 2.3% from 2000 to 2013
- Taxes hurt property owners and second jobs
New Jersey 101.5 | GOV. MURPHY’S ‘MILLENNIAL TAXES’ WILL CAUSE EXODUS, GOP ARGUES
3 Reasons a State AAA Bond Credit Rating Can Be Impacted by Healthcare Costs
Where: Virginia
What’s impacting Virginia’s AAA bond rating? The Virginia Secretary of Finance says the state will need savings from Medicaid expansion to maintain its AAA bond rating
Why would Medicaid Expansion be tied to AAA bond ratings?
- S&P Global ratings says a legislagive deadlock over Medicaid expansion would not impact bond rating
- The Virginia Secretary of Finance says Medicaid expansion will improve the state’s financial reserves and thus protect Virginia’s AAA rating
- S&P Global: “Virginia’s structural imbalance and low reserve levels are out of step with ‘AAA’ rated peers”
Pension TREND. Eliminating Unfunded Liabilities in the Blue Columbine State. Abridged Bill.
Colorado is considering SB18-200 to curb unfunded pension liabilities by:
- increases employee and employer contributions
- total contribution would be 11% of members’ salaries each month
- reduces cost-of-living adjustments
- raises the retirement age for new employees to 65/40 years of service
- 30 year timeline to eliminate unfunded liability
Chief Investment Officer | Colorado Senate Passes Pension Reform Bill
TREND. How does business in the Golden Poppy State Oppose Bills? Business Advocacy
California Chamber of Commerce maintains a website, CA Job Killers, of the bills it opposes for killing jobs.
On the list currently:
AB 1745 (Ting; D-San Francisco) Vehicle Ban — Bans the sale of combustion engine vehicles in the state by prohibiting the registration of a new vehicle in the state after 2040 unless it is a zero-emission vehicle.
AB 1761 (Muratsuchi; D-Torrance) Customer Blacklist and Hotel Workers Panic Button — Denies hotel guests due process, by requiring hotels to create a blacklist of guests who have been accused, yet not proven, to have engaged in inappropriate behavior toward hotel employees, and precludes the hotel from allowing those guests on the blacklist to enter their properties for three years.
AB 1902 (Levine; D-San Rafael) Interference with Contracts — Discourages and reduces “personal service contracts” as defined, by unfairly increasing the contract price for these services based upon an undefined and unspecified “area income” rate that presumably will include wages from different industries and different occupations that are not comparable to personal services. It also provides the Department of Industrial Relations with extraordinary authority to value companies, determine “similar services” to be included under the provisions of this bill, and what constitutes “area income.”
AB 2069 (Bonta; D-Oakland) Medical Marijuana in Employment — Undermines employer’s ability to provide a safe and drug-free workplace by creating a new protected classification of employees who use marijuana for medical purposes, and exposing employers to costly and unnecessary litigation under the Fair Employment and Housing Act (FEHA) whenever the employer terminates an employee in this new protected class who has created a safety hazard in the workplace.
AB 2351 (Eggman; D-Stockton) Targeted Tax on High Earners — Unfairly increases the personal income tax rate from 13.3% – which is already, by far, the highest income tax rate in the country – to 14.3% for one category of taxpayers (including some proprietors), who already pay half of California’s income taxes, forcing them to mitigate these costs through means that include reducing workforce, in order to provide more funding for higher education.
AB 2527 (Muratsuchi; D-Torrance) Costly Litigation Against Small Employers — Exposes small businesses who are seeking financial investors in their company to devastating class action litigation by banning the use of arbitration agreements, which is preempted by the Federal Arbitration Act, prohibiting class action waivers, allowing for the award of treble damages, punitive damages, and attorney’s fees, and interferes with contractual negotiations between sophisticated parties by dictating the choice of forum and choice of law for such litigation.
AB 2571 (Gonzalez Fletcher; D-San Diego) Public Employee Retirement Systems Investment Policy — Seeks to publicly shame investment managers and the hospitality companies in which they invest, by forcing them to submit an annual report subject to a public review, that discloses employee wage information according to gender, ethnicity, and race, exposing such companies to costly litigation.
AB 2765 (Low; D-Campbell) Portable Benefits for The Gig Economy — Imposes onerous and costly mandates on companies in the gig economy labeled as the “digital marketplace” by adding them under the provisions of the Fair Employment and Housing Act (FEHA), expanding the protected classifications under FEHA for contractors of the digital marketplace to include “familial status,” and creates further confusion and uncertainty regarding the use and classification of independent contractors. These new mandates will dramatically increase the amount of frivolous litigation under FEHA and the Private Attorneys General Act (PAGA) for the digital marketplace.
AB 3080 (Gonzalez Fletcher; D-San Diego) Ban on Settlement Agreements and Arbitration Agreements — Significantly expands employment litigation and increases costs for employers and employees by banning settlement agreements for labor and employment claims as well as arbitration agreements made as a condition of employment, which is likely preempted under the Federal Arbitration Act and will only delay the resolution of claims. Banning such agreements benefits the trial attorneys, not the employer or employee.
ACA 22 (McCarty; D-Sacramento) Middle Class Fiscal Relief Act — Unnecessarily increases California’s 8.84% corporate tax rate, already one of the highest in the nation, to 18.84%, which will encourage companies to leave the state and discourage companies from expanding or relocating here.
SB 1284 (Jackson; D-Santa Barbara) Disclosure of Company Pay Data — Unfairly requires California employers to submit pay data to the Department of Industrial Relations, creating a false impression of wage discrimination or unequal pay where none exists and, therefore, subjecting employers to unfair public criticism, enforcement measures, and significant litigation costs to defend against meritless claims.
SB 1300 (Jackson; D-Santa Barbara) Removes Legal Standing and Prohibits Release of Claims — Significantly increases litigation by removing standing requirement for plaintiff alleging failure to prevent harassment or discrimination when no harassment even occurs, limits the use of severance agreements, and prohibits the use of a general release or nondisparagement clause in employer/employee contracts.
SB 1398 (Skinner; D-Berkeley) Increased Tax Rate — Threatens to significantly increase the corporate tax rate on publicly held corporations and financial institutions up to 15% according to the wages paid to employees in the United States, and threatens to increase that rate by 50% thereafter, if the corporation or institution reduces its workforce in the United States and simultaneously increases its contractors.
2017 JOB KILLER CARRY-OVER BILLS
AB 127 (Committee on Budget) Threatens Energy Reliability — Threatens energy reliability and will lead to the elimination of jobs by mandating the closure of the Aliso Canyon natural gas storage facility.
ACA 4 (Aguiar-Curry; D-Winters) Lowers Vote Requirement for New Tax Increases — Unnecessarily reduces the voter threshold from two-thirds to 55% for local governments to enact special taxes, including parcel taxes, for the purpose of improving public infrastructure and affordable housing, which creates an opportunity for discriminatory and higher taxes to be imposed against disfavored industries and commercial property owners.
ACA 11 (Caballero; D-Salinas) Targeted Retail Industry Tax Increase — Exposes the retail industry to increased taxes by imposing a quarter-cent sales tax increase to fund affordable housing and homeless shelters, without creating greatly needed market-rate housing.
SB 49 (de León; D-Los Angeles) Creates Uncertainty and Increases Potential Litigation Regarding Environmental Standards — Creates uncertainty by giving broad and sweeping discretion to State agencies to adopt rules and regulations more stringent than the federal rules and regulations in effect on January 19, 2017 through an expedited administrative procedure without public participation or input, when the State agencies determine that federal action leads to less stringent laws and regulations than those in effect on January 19, 2017; and increases the potential for costly litigation by creating private rights of action under California law, which may be triggered when a State agency takes the foregoing discretionary action.
SB 538 (Monning; D-Carmel) Arbitration Discrimination — Unfairly and unlawfully discriminates against arbitration agreements by restricting the formation of antitrust arbitration agreements in hospital contracts, leading to costly litigation over preemption by the Federal Arbitration Act.
SB 562 (Lara; D-Bell Gardens) Government-Run Health Care — Penalizes responsible employers and individuals and results in significant new taxes on all Californians and California businesses by creating a new single-payer government-run, multibillion-dollar health care system financed by an unspecified and undeveloped “revenue plan.”
SB 774 (Leyva; D-Chino) Increased Permitting Fees and Delayed Permitting — Exposes permittees to unknown, increased fees by providing the Department of Toxic Substances Control (DTSC) a blank check to impose additional fees on permittees to implement and perform its statutory requirements when its primary sources of funding have structural deficits and creates substantial uncertainty and delay of facility permitting by interjecting a new board into the organizational structure.
SCA 6 (Wiener; D-San Francisco) Lowers Vote Requirement for Tax Increases — Unnecessarily reduces the voter threshold from two-thirds to 55% for local governments to enact special taxes, including parcel taxes, for the purpose of providing transportation services, which creates an opportunity for discriminatory and higher taxes to be imposed against disfavored industries and commercial property owners.
Using Economic Development Office to Aid Hospitals in the Iris State
State: Tennessee
What steps is the Tennessee Department of Economic and Community Development doing to aid rural hospitals?
- dispatching restructuring specialists
- Supporting SB 2646 the Rural Hospital Transformation Act
- Support state economic development funding for the project of $1 million
What is the economic development rational for bolstering rural hospitals?
- rural hospitals are often the largest employer in an area
- without hospitals, businesses cannot be recruited to locate in rural areas
How deos TN rank in rural hospital closures since 2012? TN is #2 and TX is #1 in the number of rural hospital closures
SCHOOL FINANCE TREND. 5 Arguments ESAs are unconstitutional in the Purple Lilac State
State: New Hampshire
What are Educational Savings Account supports saying supporting constitutionality? The US Supreme Court’s ruling in Trinity Lutheran Church v. Comer
5 Reasons ESAs opponents say ESAs are unconstitutional:
- Trinity Lutheran Church v. Comer is not about ESAs; its about a state grant program funding a playground at a church
- Since 1784, New Hamshire’s Constitution has prohibited funding religious schools
- 1992 NH’s Supreme Court prohibited a diversion of funds supporting activities of religious educational institutions
- In 1981, the State Supreme Court ruled that the state cannot circumvent prohibitions of the state constitution by “do(ing) indirectly that which it cannot do directly”
- “laundering” state funds is not good public policy
3 Types of Taxes on Marijuana + the Impact. New Study.
The National Bureau of Economic Research study, The Taxation of Recreational Marijuana: Evidence from Washington State, walks through the types of marijuana taxation in the US:
- Cultivation Tax which taxes cultivators
- Excise/Sales Tax which taxes the consumer
- Gross Receipts Tax which taxes retailers and processors
A potentially distortionary tax impact of the cultivation tax is thagt the tax has encouraged cultivators in California to grow more potent marijuana rather than a less potent marijuana that may be sold at retail for less.
3 States tax the cultivation of marijuana: Alaska, California, and Colorado
Regulatory TREND for Pensions. Fewer Contracts. More Hired Staff. 5 Key Points from Texas Teacher Retirement System Proposal
Proponent of More Internal Investments: Texas TRS Cheif Investment Officer Jerry Albright
The proposal will cut how much in external investment fees? $600 Million annually
How many new financial hires will this mean at TRS? 270 new employees
In comparison how much internal investment does CALPERS do? 70 % of its assets are handled internally
What 3 things does the National Association of State Retirement Administrators say the TRS proposal needs?
- competitive pay for the investment hires at TRS
- political autonomy
- governance structure
Bloomberg | Texas Teachers Pension Eyes Hiring Spree for Investment Group
Anatomy of a Stadium Bill in the South. What taxes? Supporters Say? Opponents Say?
State: Alabama
Legislation: SB311 (2018) which would create a funding structure for an open air stadium in
What’s the stadium funding structure?
- The stadium will be for University of Alabama Birmingham and other non-university events
- It will be funded by a 3% car rental tax
What do supporters say?
- it will revitalize north Birmingham
What do opponents say?
- it will harm the city of Birmingham because all the revenue will go to Birmingham-Jefferson Convention Complex
The Loophole. Local Governments Required Accounting Reporting of Tax Abatement Revenue Losses.
The Accounting Rule that requires local governmental entities to report revenue losses from tax abatement agreements: Governmental Accounting Standards Board (GASB) Statement 77
What Does GASB 77 require: local governments must report their annual lost revenue due to tax abatement agreements
Is there a loophole? Yes, local governments can decide if the annual lost revenue is “material”
What’s an example of a revenue loss from an abatement? Austinm NV reported a $4 loss from a state renewable energy program
Governing | Despite New Rules to Disclose Corporate Tax Breaks, Just Half of Local Governments Are
Lege TREND. 3 Drafting Points from Bill to Prohibit Local Soda Taxes + 3 Supporter Arguments in the Saguaro Cactus State
Arizona Governor Ducey signed HB2484 (2018) that prohibit slocal soda taxes by:
- eliminating a local tax on food and beverage exemption that permitted local taxation
- adds a “municipal transaction privilege tax”
- The “municipal transaction privilege tax” requires uniform taxation on all food and beverage products.
Supporters of the bill:
- Republican author
- Arizona Food Marketing Alliance stressed “it’s not government’s role to use taxes to influence consumer behavior”
- A supermarket industry lobbyist industry made clear the bill is about soda taxes
Arizona Daily Sun | Ducey signs bill barring cities from taxing sugary drinks
Autopsy of a Daily Fantasy Sports Bill in Camellia Flower State
State: Alabama
What do I need to know about the politics behind the bill?
- Filed by a Republican, Chair of the County and Municipal Government Committee
- In 2016, Alabama Attorney General Luther Strange issued cease & desist letters for Daily Fantasy Sports
- In 2017, the Alabama House passed a Daily Fantasy Sports Bill, the Senate did not
How did the 2018 Daily Fantasy Sports Bill SB 325 meet its demise?
It failed a vote to bring the bill up for debate.
Alabama Political Reporter | Fantasy sports bill fails on Senate floor
Lege Trend. The Fantasy Sports Tax Moving in the Cherokee Rose State. 3 Key Parts of the Bill + the goal opposition.
State: Georgia
The Georgia Fantasy Sports Bill: House Bill 118
3 Key Regulations from the legalization of fantasy sports bill in Texas:
- 6% tax on fantasy sports operators
- usual limitations: 18+, background checks for operators, state registration with a fee of $5,000 or $15,000 depending whether its revenue is above or below $3 million, annual audits
- defining fantasy sports outside the definition of gambling
Opposition: Concerned Women for America
- “gambling leads to higher instances of alcohol or drug use and mental illness”
LEGE TREND. Editorial in Bluebonnet State. Tax Reforms Moves to States. 4 Take Aways for Lone Star State.
The Dallas Morning News Editorial Board offers reasons Texas Legislature should update its Tax Code in response to the federal tax changes:
- Peer Pressure. Other states are doing it, and Texas must too to be competitive
- Higher Corproate Tax States will get hit. Jobs will shift to lower tax states
- Margins Tax has problems like taxing companies that don’t turn a profit & Texas is 49th in corporate taxes
- Property tax system is messy.
Bill Waives Fish and Game Licenses Fees for Out of State Landowners in the White Hawthorne Blossom State
State: Missouri
The legislation: HB 1657 (2018)
What does Missouri’s HB 1657 do?
- Permits out of state residents that own property in Missouri to pay in satte fish and hunting fees
What do opponents say?
- Cuts $5 million in conservation fee revenue over 10 years
- The author is doing this for his brother, a California resident who owns property in Missouri
4 Investment Fixes Forthcoming to Dallas Police and Fire Pension System.
- Hire a Chief Investment Officer and Chief Financial Officer
- Get out of illiquid investments and move toward a more traditional investment strategy
- What investments are highlighted as crazy investment decisions
- BTG Pactual a fund managing timber in Brazil & South Africa
- Asian infrastructure funds
- North Texas Opportunity Fund with the single asset of a Dallas yellow cab company
- North Texas Opportunity Fund: nuts, apples and crops
- Tens of millions in oil and gas
- Form an investment advisory committee
Want to know if your client is on 1 of 5 Texas Comptroller Maintained Divestment Lists? Here you go:
Texas Comptroller maintains 5 divestment lists:
- Companies that Boycott Israel (PDF)
-
KOMMUNAL LANDSPENSJONSKASSE GJENSIDIG FORSIKRINGSSELSKAP
-
- Scrutinized Companies with ties to Sudan (PDF)
-
China National Petroleum Corporation China Petroleum & Chemical Corporation CNPC Capital Company Limited
CNPC General Capital LimitedDaqing Huake Company Limited
Harbin Electric Company Limited
Jiangxi Hongdu Aviation Industry Co., Ltd.
KUWAIT FINANCE HOUSE K.S.C.P
LS INDUSTRIAL SYSTEMS CO.,LTD
MANAGEM S.A.
MANGALORE REFINERY AND PETROCHEMICALS LIMITED OIL AND NATURAL GAS CORPORATION LIMITED
OIL INDIA LIMITED
ONGC VIDESH VANKORNEFT PTE. LTD.
ONGC VIDESH LIMITED
Orca Gold Inc
Petrochina Company Limited
PETROLIAM NASIONAL BERHAD (PETRONAS)
PETRONAS Capital Limited
PETRONAS CHEMICALS GROUP BERHAD
PETRONAS DAGANGAN BERHAD
PETRONAS GAS BERHADPETRONAS GLOBAL SUKUK LTD
Shanghai Electric Newage Company Limited
SINOPEC Engineering Group Co Ltd
Sinopec Oilfield Equipment Corporation Sinopec Oilfield Service Corporation
Societe Metallurgique d’Imiter (SMI)
The Energy House Holding Company (K.S.C)
-
- Scrutinized Companies with ties to Iran (PDF)
-
DAELIM INDUSTRIAL CO., LTD
GAZPROM
GLENCORE PLC
HYUNDAI MOTOR COMPANY INDIAN OIL CORPN.LIMITED LLOYDS BANKING GROUP PLC NOKIA OYJ
NORINCO INTERNATIONAL COOPERATION, LTD.
OUTOTEC OYJ
POWER CONSTRUCTION CORPORATION OF CHINA, LTD.TELECOM ITALIA SPA
TELEFONICA S.A.
-
- Designated Foreign Terrorist Organizations (PDF)
- The Usual Suspects
- Scrutinized Companies with ties to Foreign Terrorist Organizations (PDF)
- None
3 Reasons Texas School Tax Abatement Deals are Bad. West Texas Op-Ed.
The paper: Odessa American
The Op-Ed writers: Texas Pulic Policy Foundation staff Carine Martinez-Gouhier & Vance Ginn, Ph.D.
3 Reasons to oppose 313 tax abatement deals in Texas:
- Bad for local businesses that will pay more in taxes & could face competition from the Chapter 313 recipient business
- Strain local school Funding. 313 agreements exempt their property value from school funding formulas & schools can negotiate supplmental payments from the 313 recipient outside of school funding formulas which incentivizes schools to enter into 313 agreements
- Studies say 85% of the businesses would have located there without a 313 Agreement. According to a University of Texas at Austin study by Dr. Nathan Jensen
Odessa American | GUEST VIEW: School tax abatement deals: Boon or pandora’s box?
OH Attorney General Claws Back Tax Benefits to Stop Sports Team from Moving to TX
Ohio Attorney General filed suit to invoke an Ohio law that prevents a professional sports team that receives a tax benefit, or its stadium receives a tax benefit, from leaving OH.
Why does this law exist? It was passed and never invoked to keep the Cleveland Browns in Cleveland
If the law doesn’t survive constitutional challenges, such as a Commerce Clause violation, can its effect still be felt?
- yes, it slows the process
- yes, it could harm a stadium deal in Texas
Columbus Dispatch | Move to block Crew relocation raises many legal questions
SCHOOL FINANCE. New Angle on ESAs. 3 Supporting Arguments.
The new angle on Educational Savings Accounts? Military Educational Savings Accounts
3 Reasons the military should have ESAs for their offspring?
- “educational opportunities play an important role in determining whether a military family accepts a particular assignment”
- “35% of service members have considered leaving the military because of the limited education options available”
- 40% have either declined or would decline a career-advancing opportunity at a different installation if it meant their child would have to leave a high-performing school.
50% of military personnel are stationed in states without school choice.
Wall Street Journal | Military Families Deserve School Choice
Lege TREND. Revenue = impetus for direct sales by manufacturers in the Mountain Laurel State
State: Connecticut
The revenue at issue with direct sales by manufacturers, like Tesla: $5 million per year, in Connecticut a car purchased out of state by a resident, must pay the different between the other state’s sales tax & Conencticut’s sales tax.
How must percentage difference does the $5 million in annual revenue account for? Most Tesla sales are in New York, which as a 0.4% lower sales tax rate.
New Haven Register | Tesla makes plea to sell electric cars in Connecticut
Lege Trend. Regulating Fantasy Sports by Referendum in the Magnolia State
State: Louisiana
The Fantasy Sports legalization bill: Louisiana HB 484 (2018)
The 3 step method to legalize fantasy sports in Louisiana:
- Require approval by of the voters
- Push all licensing and regulation to the Louisian Gaming Control Board
- Statutorily declare fantasy sports to not be gambling
15 State legislatures move to seize this new revenue source: sports betting
What is sparking the sports betting legislation? Anticipated ruling by the US Supreme Court in Christie v. NCAA that will strike down the federal ban on sports betting
Examples of state responses to potentially legalized sports betting:
- Rhode Island Governor’s proposed budget relies on $23.5 million of new revenue from sports gambling
What type of revenue is involved for states?
- sports betting is estimated at $41.2 billion industry according to the American Gaming Assoc.
- $3.4 billion in taxes to state and local governments would stem fromt he $41.2 billion industry
Tax Proposal for Violent Video Games. 5 Key Points.
Where: Rhode Island
Legislator Proposing a tax on M rated video games: Representative Robert Nardolillo III (R-Dist. 28, Coventry)
The tax: additional 10% sales tax on M-rated video games
The tax revenue dedicated to fund: increase mental health and counseling resources in schools
The response: Reason calls it an unconstitutional violation of the first amendment because of the ruling in Brown v. Entertainment Merchants Ass’n (2011) that protects violent video games as free speech.
Revenue TREND. 1 City. 2 Months. $2 Million Revenue. Retail Marijuana.
City: Los Angeles
Revenue sources from retail marijuana:
- licensing fees
Los Angeles Ordinance policy questions:
- what type of advertising will be permissible
- 800-foot buffer zones between cannabis storefronts and:
- drug and alcohol recovery facilities
- day care facilities
- supportive housing
- public libraries
- parks
- schools
- homes
- how to craft ordinances for special events like:
- private clubs
- lounges
- special events hosted by licensed businesses outside their storefronts
Courthouse News Service | LA Rakes in Over $2 Million in Retail Pot’s First Two Months
Pension TREND. Divestment from Guns. The Where. & How.
WHERE:New Jersey
WHO: lawmakers
HOW to divest from guns: a bill to “prohibit the state from investing assets of any pension or annuity fund in companies that manufacture firearms or ammunition,”
Lege TREND. Ride Share Tax. Moving from Gross Receipts to Flat Fee in the Mountain-Laurel State.
What’s happening? The Philadelphia Parking Authority is looking for a revenue source with a statutory shift from a 1.4% gross receipts tax on ride share, limos and taxis to a 50 cents per ride for ride share, taxis and limos.
Why supporters like the fee: No audits. Unlike taxing gross receipts, ensuring that the per ride fee is attached to rides, will not require costly audits to determine company revenue.
Lege Trend. Taxing Short Term Rentals in the White Pine Cone State.
State: Maine
The bill taxing short term rentals: Maine LD 1721 (2018) & Maine LD 1805 (2018)
How this bill taxes short term rentals:
- Expands the sales tax to include short term rentals
- Taxes the gross amount of the short term rental, including the portion that is retained by the platform
Maine Wire | Maine should resist taxing the ‘sharing economy’
Anatomy of an Irrigation Tax Bill. 3 Points from the Goldenrod State
State: nebraska
The irrigation tax bill: LB 1022
What does the irrigation tax bill look like?
- 1 cent per 10 gallons of water excise tax on irrigation
- only those using water would pay the tax
- filed to make a point that valuable resources go unfairly taxed, and as such the bill’s author cannot sign a property tax cut pledge
NBC 2 | Irrigation tax proposed…a nightmare for legislature and ag producers
What 3 Points Do I Need to Know about Texas Public Policy Foundation's Texas Prosperity Promise?
TPPF’s Texas Prosperity Promise in a nutshell:
- PUBLIC EDUCATION
- replace the complex, convoluted school finance system
- create a student-centered finance system
- focus funding on delivering “top-notch education to Texas public school students”
- School Choice
- remove onerous education mandates
- give teachers and school leaders more flexibility to innovate
- Better civics curriculum
- no “weak substitute courses” for government and American history like we have now
- replace the complex, convoluted school finance system
- PROPERTY TAXES
- reduce property taxes and offset it with state revenue (no specific revenue, just revenue)
- limit local property tax revenue increases to no more than 2.5 percent per year
- limit state revenue spending to 4 percent or population growth plus inflation
- TRANSPARENCY
- no local government lobbyist spending
- no automatic contributions to unions by public employees
FYI expect to see these pieces of legislation replicated in Texas in 2019:
- TPPF likes Missouri’s tort reform & pro business policies
- TPPF likes South Carolina’s low cost of doing business
TPPF | A PROMISE TO KEEP TEXAS AHEAD
Lege Trend. Moving to a Consumption Tax in the Magnolia State by taxing Fuel.
Mississippi is considering a proposal to reduce its income tax by moving to a consumption tax that raises more revenue by
- taxing fuel
- add $0.03 to the price at the pump each year over 4 years
- annual fees of $300 on electric vehicles &$150 on hybrid vehicles
3 Concerns in the Mountain Laurel State about moving the State Lottery into a Pension System. State #2 to make this move?
State: Connecticut
What do lotteries and pensions have in common? Last year New Jersey proposed moving the state lottery assets into one of the state’s pension funds to cover unfunded liability. Now, there’s talk of the same happening in Connecticut.
What concerns are being raised in CT about using the lottery to cover unfunded pension liability?
- Marketing problems. People buy lottery tickets to help education and programs for seniors
- Its going to a balance sheet wash. While the move will reduce the unfunded liability and lower the state deficit, it will also lower the state general revenue funds pension payments.
CT Post | Dan Haar: State could save billions by giving lottery to pension funds
Violet State Governor Proposes Pension Cost Shift to Schools and Universities.
Illinois Governor Rauner proposes phasing in a shift in pension funding from the state to local school districts and university systems.
The pension phase cost shift to school districts and universities: Over 4 years, 25% cost shift per year
Will school districts and univerisities receive more funding? Yes + flexibility in contracting, bidding and sharing services
6 Reasons TTARA Says Sales Tax Swap for Property Tax Is Not Smart
Dale Craymer, President of Texas Taxpayer and Research Association, sets out 3 problems with the idea of swapping the sales tax for the property tax.
Here we go:
- The switch will require the sales tax to nearly quadrupple to 23%
- The switch will also need to account for local property taxes so we get up to 25% sales tax rate
- A 25% sales tax will:
- close businesses
- move sales online
- drive people out of Texas
- Even if we cut all the sales tax loopholes, we only get $12 Billion
- that’s 20% of the proeprty tax
- We would still need $44 billion
- Taxing real estate transactions would be devestating to home buyers, who couldn’t recoup the cost and to home building industry
- Bad for Small towns. Small town property tax base traded for a non-existent sales tax base
- More Power with the State, we would need a statewide sales tax
- The state would later allocate funds to governments
Lege Trend. Imposing Taxes on Non-Profits that operate certain facilities.
Why would a state want to tax a non-profit? New Mexico will be losing $30 million in tax revenue when Texas Universities take over operation from California Universities in partnership with a private company.
How did New Mexico phrase taxing Texas Universities? “receipts of a prime contractor that are derived from operating a facility in New Mexico designated as a national laboratory by an act of congress.”
The bill: Senate Bill 17
Lege TREND. Tying Pension COLAs to funding levels.
State: California
Bill: SB 1031
COLA payments & unfunded liability linked: No COLAs if unfunded actuarial liability of the system is greater than 20%
Transparency Trend. Legislation from Conservative Activists Making the Rounds.
Iowa’s SF2190 requires Iowa to shrink its administrative rules by 1/3 within 4 years.
Within 1 year, the number of rules cannot exceed the current number of rules.
Did the bill try to catch loopsholes? Yes. It prohibits combining rules or making rules subparts to other rules.
Supporters:
- Americans for Propsperity
- Iowa Association of Business
Des Moines Register | Thousands of state government rules would be scrapped under Iowa Senate bill
By the Numbers. Recreational Marijuana in Colorado.
Gross sales: $1.5 BILLION (2017) $1.3 Billion (2016) $996 Million (2015)
Adult sales: $1.09 Billion
Medical Marijuana Sales: $416.52 Million
Tax revenue & fees, with the drafting error that prevented all taxing jurisdictions from collecting the tax: $247 Million
Lege TREND: manufacturing reinvestment accounts
New Jersey is propsing creating manufacturing reinvestment accounts. S1143 (2018)
What would a manufacturing reinvestment accounts do?
- allow for companies in the state to receive tax reductions, deferrals and deductions on manufacturing equipment and workforce training
Is there a cap? Yes, $100,000 annually for five years
What requirements to create an account?
- no more than 50 employees
- in good tax standing
- to create the account in a NJ financial institution
NJ BIZ | State senate considering new tax deductions for manufacturing
Sunshine State looks to Loosen Strings on Motel Hotel Bed Tax
In addition to making sure short term rentals pay hotel motel taxes, bills in Florida want to make certain cities have more options to use bed taxes.
The Tourist Development Tax Bill, HB 585, would permit hotel,motel & short term rental bed taxes to also be used for:
- infrastructure
- water safety quality projects
Daytona Beach News Journal | LANE: Bed tax bills look at new uses for tourists’ dollars
Red State Reacts to Federal Tax Cut with Legislation to Make Residents Whole.
Nebraska has a history of passing bills after major federal tax reforms to make certain its citizens remain whole.
For 2018, Nebraska is considering LB1090 to:
- Restore the $134 personal income tax exemption credit that was effectively repealed by the new federal law
- Establish a standard state tax deduction of $6,750 for single taxpayers and $9,900 for heads of households
Supporters:
- Business Organizations
Lincoln Journal Star | Senators seek to shield Nebraskans from unintended tax hike
TREND. Commerical Property Tax Fight from the Poppy State. Who. What. How.
In 1978, California split the property tax roll and limited the property tax rate & now times are changing.
Who wants to revisit the 1978 CA Property Tax Cap? coalition of civil rights and community organizations
What part of the tax cap is the target? commercial properties
How do they want to change the property tax for commercial properties? To tax commercial properties at market value while leaving in place the Proposition 13 protections for homeowners
What’s the revenue increase estiamte? $6 billion to $10 billion per year
Sacramento Bee | Prop. 13 fight looming over how California taxes business properties
2 Ways a Soda Tax/Food Tax Bill Dies in Yucca Flower State
New Mexico Legislature voted down Senate Bill 129 that would have kept tax exempt only foods that are permitted under the federal WIC Program.
Supporters say: When New Mexico began tax free food policy, the intent was to not tax real food, but now processed foods are not taxed
What groups opposed the change?
- AARP
- Center on Law and Poverty
- New Mexico Chile Growers Association
- Catholic bishops
- National Association of Social Workers.
What do opponents say? Tying the standard to WIC is not logical because the program is designed for women who just gave birth and excludes foods like nuts.
What did State Senators say? ““I just have a problem with people telling other people what to eat and what to drink,”
las Cruces Sun News | Bill to tax unhealthy foods dies in committee
Gambling to Fund Pensions. 100% revenue dedication. Read the bill. 3 Talking Points below:
Kentucky is considering HB 229 (2018) that would authorize casinos to fund state pensions.
The funding mechanism would work like this:
- 100% of gaming proceeds, after accounting for administrative costs, would fund state retirement systems.
Supporters say:
- Unfunded pension liabilities need a dedicated funding source
Opponents say:
- There are better options like closing tax loopholes
TriState Home Page | Bill proposes casinos help fund Kentucky pension systems
Regulatory TREND. Creating an Industry Specific Public Bank Courtesy of the Golden State Attorney General and Treasurer.
The State: California
California’s Attorney General and State Treasurer public bank proposal: to support the marijuana industry
3 Reasons why a public bank for marijuana businesses is good public policy?
- Traditional finance industry is shutting out the industry
- Federal law complictes the legality of the industry for banking
- The marijuana industry is cash heavy
Is there another option other than a public bank? Allowing marijuana business to access state chartered banks and credit unions. California SB 930 (2018)
Courthouse News | California’s Treasurer, AG Team for Study of State Pot Bank
What do expanded marijuana taxes look like? Special Districts Benefit
Colorado is considering SB18-088 that will allow these spacial districts to draw revenue from the marijuana sales tax:
- regional transportation district
- scientific and cultural facilities district
- health services districts
Why was this bill necessary to allow special distriacts access to the marijuna tax revenues?
- Colorado’s marijuana tax did not tie to the general sales tax, which special districts can access
3 Reasons to Oppose a TX County Special Transportation District from the Right.
Empower Texas lays out 3 reasons that it says shows Denton County’s Transit Agency is a “train wreck.”
- The money that cities in the district pay is uncapped
- The city councils have no input on how the trnasit agency spends its revenue
- taxpayer subsidies fund the agency that loses ridership and has no acocuntability
Denton County Transit Authority (DCTA) by the numbers:
- 2001 Created by Texas Legislature
- 2002 local voters approve
- 3 cities dedicate a ½-cent sales tax to the district
- $50 million operating budget
- 3 cities appoint 3 of 14 board members
- “A-Train operates at a loss exceeding $22 per rider”
Empower Texans | DENTON’S TRANSIT AGENCY IS A FISCAL TRAIN WRECK
Lege Trend. How the Land of Lincoln is Tackling Unfunded Pension Liabilities.
Illinois is considering a $107 Billion bond to shore up its pensions.
What would Illinois do with the bond proceeds?
- Ensure a nearly fully funded pension system
- The pension system funds would then be invested in the usual fashion
Bloomberg | Illinois Ponders Pension-Fund Moonshot: a $107 Billion Bond Sale
Tax TREND. Dedicated Red State Sales Tax on Ammunition. 3 Key Points.
State: Nebraska
The Legislation: Nebraska LB 730 (2018)
The ammunition tax rate: 10%
Tax revenue will be dedicated to fund: wildlife conservation & domestic violence
Tax would generate: $4.1 million/year
New Lege TREND. Fantasy Sports Bill includes US Supreme Court Issue.
The State: Massachusetts
The US Supreme Court Issue: New Jersey’s challenge to federal prohibition on sports betting heard by the highest court in December 2017
The Bill: SD 2480 requires:
- 15% gross revenue tax on daily fantasy sports operators
- a lower tax rate than the state’s casinos
- comparable to fantasy sports tax rates in NY and PA
- consumer protections- such as gmaing age
- oversight by the Massachusetts Gaming Commission
- registration fee up to $100,000 and set by the Gaming Commission
Sentinel & Enterprise | Fantasy sports bill is good bet for all
Glouster Times | Bill features fantasy sports tax, pro sports betting panel
Concord Monitor | Mass. lawmakers consider 15 percent tax on daily fantasy sports
TX Attorney General Opinion. SCHOOL FINANCE. Hurricane Harvey +Harris County Department of Education Create a Harvey = Fund?
Harris County Attorney Vince Ryan has requested an Attorney General Opinion as to whether the Harris County Department of Education can create a Hurricane Harvey Relief Fund?
What’s the goal of the Relief Fund? To “provide grant funding to independent school districts located in Harris County to assist with recovery efforts after Hurricane Harvey “
How would the Relief Fund be funded? public funds, tax proceeds generated from Harris County Department of Education countywide equalization tax
What else do we need to know about the Relief Fund?
- funds would support an HCDE public purpose
- Its an exception to Article III, §§ 52 and 53 ofthe Texas Constitution prohibiting gifts of public funds because Hurricane Harvey meets the exception for a public calamity
3 Revisions. New Texas Facilities Commission P3 Policy. Procurement Changes Afoot.
The Partnership Advisory Commission, The Texas Facilities Commission & P3 Guidelines walk into a bar, 4 revisions to P3 guidelines emerge, no joke.
Revised P3 guidelines at the Facilities Commission will require:
- project selection analysis before procurement
- “public purpose” requirement (hello, eminent domain terminilogy):
- a public need or benefit
- estimated cost is reasonable AND
- private entity participation will allow for timely development or operation
- evaluation criteria:
- monetary savings
- community impact
- past performance of the proposed bidder
BISNOW | Lawmakers Sign Off On P3 Guidelines For Capitol Complex
SCHOOL FINANCE. 2 Colorful Opposition Points against Education Savings Accounts from the Keystone State.
Opponents to education savings accounts in Pennsylvania say ESAs are:
- “vouchers on steroids”
- ““It’s like finding a man in a well and pulling out the only rope available to him to escape from his situation.”
Daily Item Harrisburg | Education supporters prepare to fight ‘vouchers on steroids’
SCHOOL FINANCE TREND. A partial funding option from the Blue Grass State. Read the Bill.
Kentucky’s gas tax proposal, House Bill 211 will:
- 3 cents additional gas tax
- re-brands the icrease from “gas tax” to “school transportation funding fee”
- the new funds will be specifically dedicated to school transportation
The revenue estimates from a 3 cent school transporation fee in Kentucky:
- $90 million in new revenue
- $30 million to be used for bonds for new buses
- the remaining $60 million will go to the state’s share of school transportation funding
News-Enterprise | Lexington official proposes gas tax to help school transportation costs
Prepare for 2019. Texas Special District indictments + transparency + tax dollars = legislative reform
The economic development board: Pasadena’s economic development board AKA the Pasadena Second Century Corp
The alleged violation of the opening meetings act: 6 board members. 2 private meetings with a contractor.
What did the baord think it was doing? It thought it was not triggering the open meetings act by subdividing into groups.
What did the board actually do? Violated the “walking quorum” provision of the Open Meetings Act.
Why does this matter: Special Districts accused of running amock + transparency + tax dollars = legislative reform
Houston Chronicle | Six current, ex-members of Pasadena economic board indicted for private meetings
US News & World Report | Members of Houston-Area Board Indicted for Private Meetings
Tax Legal TREND begetting Lege TREND. Collecting Hotel Taxes from Online Bookings.
To recap: The 5th Circuit said under current hotel tax statutes, cities, like San Antonio couldn’t collect taxes on amounts not included in the hotel occupancy tax base.
Where are we now? San Antonio has asked the 5th Ciruit to reconsider its ruling by considering San Antonio’s local hotel tax ordinance.
Which cities are involved in this suit?
- Houston opted out to pursue state court options
- 173 Texas cities remain in the class action lawsuit
How long has the lawsuit been trucking along? 10+ years
Southeast Texas Record | San Antonio asks federal appellate court to reconsider opinion in hotel occupancy tax verdict
Lege Trend. 5 Opposition Arguments against Fantasy Sports in the Great Plains. Read the Bill.
The Nebraska Legislature is considering LB 469 that regulates fantasy sports. Opponents stopped the bill procedurally.
The opponents to LB 469:
- the author is trying bamboozle the chamber
- not enough consumer protections
- takes advantage of citizens
- codifies online gaming
- gambling addiction causes emotional and financial devistation
Omaha World Herald | Opponents block vote on senator’s proposal to regulate fantasy sports contests
Lege TREND. Online Sales Tax Starts in Gulf State. 3 Impacts to Retailers
In 2016 Lousiana passed a sales tax for online sales from retailers with no physical presence in the state.
In 2018, the online sales tax begins and here’s what’s happening:
- consumers will receive notices of sales taxes owed from 2017 purchases
- retailers will send notices to consumers
- Retailers will also have to provide annual reports to LA’s Department of Revenue that detail what LA consumers spent in the previous year
- The goal isn’t to target mom-and-pop stores, the law targets out-of-state internet retailers with gross receipts of more than $50,000
LA’s law was modeled after CO’s law that has withstood court scrutiny
AP via Times-Picayune | Louisiana starts collecting unpaid internet sales taxes
Pension Trend + Campaign TREND. Divestment from Oil & Gas. Add a Pension System to the List.
First came, CALPERS, then New York City joined in to divest its pension system from oil and gas, and now calls are coming for the Illinois to divest.
Pension divestment from oil and gas interests is entering the Illinois Governor race.
The campaign messaging: “Illinois should divest its pension funds from investments in dirty energy.”
News-Gazette | Biss calls for state pension funds to divest ‘dirty energy’ investments
Open Records Trend. Elected Official Surveys Not Open Records in Texas. SB 4 meets Open Records.
Texas Attorney General letter ruling found that a survey from a city council member is not disclosable because no city resources went into conducting the survey.
What’s the big deal about a councilmember surveying his or her constiuents? The question in the survey was an issue before the city council for a vote.
What was the survey question? SHOULD THE CITY OF FORT WORTH JOIN OTHER CITIES IN THE SUIT AGAINST SB4?
Legal Trend. 3 Points. TX Supreme Court and Local Bag Ban Laws. The Focus of Bill Drafting.
Who is suing whom? Retailers are suing Laredo over Laredo’s plastic bag ban, Laredo Merchants Association v. The City of Laredo,
Who won most recently in the lower courts? The Merchants Association
What did the lower courts say? Court #1 sided with the city, upholding the plastic bag ban. Court #2, the appellate court sided with the merchants
Can this effect Austin, Port Aransas or Fort Stockton’s bag ban? yes
What’s 2019 legislation going to focus on regardless of who wins: Texas Health and Safety Code, section 361.0961: local governments may not “prohibit or restrict, for solid waste management purposes, the sale or use of a container or package in a manner not authorized by state law.” Did this or does this mean plastic bags?
City supporters say: “Extreme uniformity and regulation fails to address diverse local concerns”
Merchant supporters say: that “inconsistent local laws like the plastic bag bans seen in cities across Texas cause unnecessary strain on small businesses.”
Was there a 2017 bill? Yes, it created a new Business and Commerce Code section affirming the right to use any bag packing. Texas SB 103 (2017)
Laredo Merchants Association v. The City of Laredo, 16-0748
KUT | State Supreme Court Case Could Bring An End To Plastic Bag Bans In Texas
Pension TREND. Divestment from Fossil Fuel Round 2.
Add New York City to the list of pensions that are tasked with divesting from fossil fuel investments.
What other pensions have been charged with divesting from oil? CALPERS and Norways’ sovereign fund
The $189 Billion pension is charged with divestment within: 5 years
Why? NYC is especially atune to rising sea levels which result from climate change
CNN Money New York City to Exxon: Pay up for climate change costs
Anatomy of Daily Fantasy Sports Revenue in the Empire State. 3 Points about Revenue & its limits.
Annual revenue NY receives from daily fantasy sports: More than $3 million
How many companies contributed to the $3 million in revenue? 15
Is there a cap limiting expansion of the 15 companies? Yes, the companies cannot expand until the Gaming Commission adopts rules.
AP | Online fantasy sports raise more than $3M for New York state
How 1 State Increase a revenue source by 800%
Wyoming increased its revenue from leasing land to oil and gas companies by mor than 800%.
Why did leasing get a sharp uptick: Most say its due to the use of a new online lease auction system
US News & World Report | Wyoming’s Lease Revenue Climbs by 800 Percent This Year
Lege Trend. Pension Investment Fee Disclosure Codification.
New Jersey Governor Chris Christie signed a pension bill that codifies pension practices of stress tests and disclosure of investment fees.
Local TREND. TN City Requires more Economic Development Disclosures.
Nashville City Council by voice vote passed an ordinance dubbed “Do Better” to require corporations to dislcose more information in economic development deals.
Corporations will now have to disclose the following in economic devleopment deal making:
- how many county residents they plan to hire
- anticipated wages
- 7 years of health and safety violations
- any wage-related lawsuits against the company or contractors
The Tennesseean | Nashville council passes new transparency rules for future city incentives
SCHOOL FINANCE. 3 Opponent Arguments against ESAs in the Granite State.
New Hampshire Legislature is considering educational savings accounts in SB 193 (2017-2018).
Opponents make the following arguments against ESAs:
- ESAs will destablize slow growth districts
- ESAs will cause school districts to receive less state aid and will increase the burden of fixed costs on already cash strapped districts
- ESAs will “disproportionately harm property-poor municipalities” while adversely impacting the quality of education
- The loss of 5 students would exceed the cost of 1 teaching position
Lege TREND. Taxing Marijuana. 25% sales tax proposed. Revenue. Revenue. Revenue.
New Jersey Legislature is considering S3195 & A4872 to legalize and tax marijuana.
The bill will create a sliding sales tax of:
- 7% to 25% over 5 years to encourage early participation
Other regulatory and enforcmement provisions are:
- Permit those 21 and older to possess up to 1 ounce of marijuana, 16 ounces of marijuana-infused products in solids, 72 ounces in liquid form and 7 grams of concentrate
- Prohibit home cultivation
- Create the Division of Marijuana Enforcement to regulate the industry
Corresponding legislation dedicates the a portion of the revenue to medical treatment and research.
Local Revenue Trend. Taxis Subbing in for City Fleets. 3 Bits informed:intel
Where is this happening: D.C.
How does the program work? City employees contact a taxi participating in the city’s “Vehicles on Demand” pilot. 5 to 10 minutes later, a driver picks her up, checks her employee ID and takes her to her destination.
Benefit to the city: Cuts employee transit time in 1/2
Governing | How Public Employees Could Power the Struggling Taxi Industry
Tax Trend. Taxing Ride Share. Ensuring Cities Retain Revenue in the South.
In 2017, a statewide ride share bill failed in Alabama.
2018 brings another attempt at statewide ride share regulation, and local governments are talking ride share revenue:
- statewide regulation could mean the state getting its hands on local ride share tax revenue
- statewide regulation also shifts licensing fees from local revenue to state revenue
WBRC | Another statewide ride hailing regulation bill could be proposed in upcoming session
Are you a city looking for economic development, rehabilitating blighted areas & a new tax base? If so, enact this ordinance…
Follow in the footsteps of Adrian, Michigan and permit and tax medical marijuana facilities from growers to processors to provisioning centers to safety facilities to secure transporters.
Forget 3 taxing tier systems. That’s so 1999. Welcome 2017 and tax 6 tiers!
The 4 reasons Adrian, Michigan commisioners supported permitting and taxing marijuana facilities:
- Jobs that pay $15-20/hour
- Funds for blight elimination
- Economic development
- Compassion for medical marijuana patients
5 State Tax Trends for 2018 and Beyond. Economic Development. Business Taxes. Online Sales +more
The Tax Foundation lists these state tax policy issues trending:
- Gross Receipts Taxes- 5 States Have it; 8 States Considering it
- States Want to Tax online Sales
- States want to tax and legalize marijuana
- Reducing Taxes on Capital
- How to balance tax incentives with smaller tax bases
Campaign Trend. Texas Senate. Incumbents for Killing the Franchise Tax.
Add Texas State Senator Craig Estes to the list of Texas officials promoting the demise of the Texas Franchise Tax/Margins Tax.
Where will the $9 Billion per biennium in franchise tax revenue come from? Economic growth that occurs when the franchise tax/margins tax is gone.
Midland Record Times | State senator wants to eliminate business franchise tax
4 Problems with Texas Municipal Management Districts Explored
Texas Legislature’s 2017 creation of the University Hills Municipal Management District has given rise to the following concerns about this and similar special districts:
- A Dallas City Council member described the process as “comes across a bit shady.”
- Irving taxpayers had to bail out Las Colinas when its district’s debt ballooned
- Dallas has no representation on the district’s initial board
- Former Westlake Mayor calls special districts “undemocratic”- an extra layer of regulation & taxation
Anatomy of a Gas Tax Increase. 4 Steps to Move a 10 cent gas tax forward with City Support.
STEP 1: pass a bill to create a committee to study transportation funding. Like Missouri did with the 21st Century Missouri Transportation System Task Force, 23-member task force of state officials and private citizens
STEP 2: Have the Chair of the Senate Transportation Committee & vice-chair of the 21st Century Missouri Transportation System Task Force file a bill like Missouri’s SB 734 to raise the gas tax
STEP 3: Garner support from truckers and mayors for your bill.
STEP 4: Have your bill give voters final approval to increase the gas tax by 10cents
LandLine Mag | Missouri bill would increase fuel tax 10 cents
5 Tax Reform Lessons from the Tax Experts
The Tax Foundation highlights 5 lessons that legislators can learn from the tax reform process in North Carolina, Indiana, Kansas, and Oklahoma:
- It is a process. Be patient. Be methodical. Be thoughtful
- It is not just about cutting revenue. Must also identify tax or spending changes to offset the cuts
- Must contain spending controls. Tax reform and spending controls must by symbiotic.
- Design Tax triggers. When a certain revenue level is reached, a trigger can lower taxes, but it must be tied to starting point for the revenue level. A simple increase of revenue alone isn’t enough.
- It is worth it. Greater economic opportunity does come from tax reform
Tax Foundation | Arkansas Tax Reform: Lessons from Other Legislators
Legal Trend. Texas Hotel Tax and Online Providers. The $84M Tax Reversal.
The 5th Circuit ruled that the Texas Hotel tax does not include the fee an online service provider charges.
What is practical effect? lower courts valued the tax on the service fee at $84 Million for the class of Texas cities
What does this legislatively? A legislative fix to include taxing the service fee
Law 360 | 5th Circ. Wipes Out $84M Hotel-Tax Win For Texas Cities
Activism TREND. Tying Economic Development and Sales Tax Exemptions. Supporters. Who. What. Where.
Supporters of retaining sales tax exemptions to whether the exemption supports economic development: Wyoming Association of Municipalities
Why does the WY Assoc. of Municipalities want to reign in sales tax exemptions?More reliable and greater local taxing authority
What is the concern WY cities have with the state tax structure? Relying on energy taxes and state revenue for local government funding has proven to be unreliable
What 4 tax reforms are being proposed?
- increase the severance tax cap from $155 to $214 million
- cap for federal mineral royalties be raised from $200 to $275 million
- increasing the state-wide sales tax from 4 to 5%
- cutting any of the state’s 39 tax exemptions that are not found to support economic development
New Hire Pension Changes in Gulf Coast City. 3 Key Points for Other Cities.
New Orleans has changed its pension rules for new hires by:
- COLA limitations. New hires would receive cost of living adjustments only if the pension is nearly fully funded.
- Salary CAP for pension calculations. Caps salaries at $100,000 for the purpose of pension calculations only
- Slow pension benefits. Pension benefits asccrue at a slower rate.
No pension changes were made to current employees.
New Orleans Advocate | New Orleans City Council approves pension changes for new city hires
$58M in state agency swag + $100 M state deficit = Procurement Cessation in a Central State
No more swag for state agencies in Oklahoma.
According to Oklahoma Governor MAry Fallin state afencies spend $58 million per year on swag. Because everyone needs a Coproration Commission Stress Ball or key chain.
Governor Fallin signed an executive order prohibiting state agency promotional items.
Governing | Amid Budget Crisis, Oklahoma Governor Bans ‘Swag’ Spending
What are the proposed sales tax rates in the Texas Public Policy Foundation Texas Prosperity Promise?
TPPF newly launched Texas Prosperity Promise has 1 principles, including eliminating the property tax for an expanded sales tax.
The expanded sales tax would be:
- 15.7% is the sales tax base remained the same, including the sale of propert-y OR-
- 11% if services, taxed in 1 other state, were also included + a sales tax on the sale of property
TPPF | Texas Propserity Promise linking to the 2017-2018 Guide to the Issues
Lege Trend. Swing State Legislature Passes Fantasy Sports Bill. Is there a tax?
State: Ohio
The fantasy sports regulations that passed:
- licensing
- investigation
- regulation
- enforcement by the same state agency with oversight over the casino industry
The tax fail: A 6%t tax to help the state cover the costs of addiction and other social problems failed to pass
What tax would fantasy sports businesses face in ohio? the existing gross receipts tax of 0.26 %
The Toledo Blade | Lawmakers vote to expressly legalize fantasy sports games
Economic Development Trend. Business Flock to Desert. 3 Takeaways for your Economic Development Plan
The Tahoe-Reno Industrial Center, touted as the largest industrial complex in the world is on an economic development winning streak because:
- The businesses are at the forefront:
- Tesla’s Gigafactory
- Switch
- Jet.com and Walmart
- eBay and Zulily
- An exceptional absence of local regulation
- The county has 845 residents and the businesses employ 3 times as many people
- Land puchase agreements for the industrial park prohibis the county from imposing any new fees or regulations
- A unique head of economic development who formerly worked for Capitol Records in Hollywood & then created small businesses
Governing | Deep in the Desert, an Experiment in Economic Development
3 Keys to Lonestar Economic Success from Economist Ray Perryman
Ray Perryman highlighted 3 keys to Texas economic success in his testimony before the House Select Committee on Economic Competitiveness:
- Ensuring quality education adapts to all demographic growth and shifts
- Avoiding discriminatory social legislation like the “bathroom bill”
- Maintaining economic development programs
Rio Grande Guardian | Perryman: Keys to Texas’ Economic Success
3 Points. New Report. State Pensions Meet Their Obligations. + 4 Recommendations
The report is by: National Conference on Public Employee Retirement Systems
3 Conclusions from the state and local pension obligation report:
- state and local pension plans have been able to meet their obligations consistently over the past 25 years
- contributions and investment earnings by 6,000 public pension plans between 1993 and 2016 exceeded benefit obligations in all but four years of the national recession
- during the recession, the pensions were able to meet their obligations because they had built up reserves during normal times
4 recommendations
- Stop dismantling plans on grounds that they are not fully funded.
- Improve funding by determining the appropriate levels of required employer contributions.
- Establish a pension stabilization fund that can set aside money from a certain revenue stream to be used in special circumstances, such as a recession.
- Implement a mechanism to ensure that full employer contributions are made on a timely basis, for example, by making employer contributions a nondiscretionary part of the budget.
Chief Investment Officer | Report: Public Pension Plans Consistently Meet Obligations
SCHOOL FINANCE. A Plains State Constitutional Fix. The proposed language:
Kansas Courts have declared its school financ esystem unconstitutional.
A proposal to amend the Kansas Constitution would:
- keep school finance budgeting issues out of the courts
- limit school finance to the Legislature by including the language:
- “As determined exclusively by the Legislature, the Legislature shall make suitable provision”
+1 Texas City Looking to Add Freeport Tax Exemption
Athens is considering adding a freeport tax exemption.
What is a freeport tax exemption? An inventory-based property-tax exemption on inventory that is in Texas for a period of 175 days or less, and which will be taken outside of Texas
Is it common? 21% of Texas cities offer it
Is it complicated? Municipal utility districts also must =grant the exemption, if a businesses apply
How often must businesses apply? Every year
Athens Daily Review | Athens city officials consider offering freeport tax exemption
Pensions. AR Public Employee Retirement System. Ups Employer Contribution Rate.
Arkansas Public Employees Retirement System’s trustees increases the employer contribution rate from 14.75% of payroll to 15.32% of payroll.
What caused the increase in the employer contribution rate? The projected annual investment return was reduced from 7.5% to 7.15%
Arkansas Online | State pension panel increases rate charged to governments
Economic Developement Trend. New Requirements for Film Incentives.
Sweden is requiring sexual conduct education before awarding film incentives.
School Finance. TX.A.G. Opinion Forthcoming. Term Limits for School Board Trustees?
Attorney General Opinion Request RQ-0191-KP asks whether school boards can adopt term limits as part of the local school district’s governance policies.
From Chair Jody Laubenberg’s opinion request letter:
“In reviewing the Texas Education Code, Chapter 11, School Districts, it seems reasonable and acceptable for a local school board to enact term limits. “
Local Economic Benefit. State High School Basketball Tournament by the Numbers.
The state high school basketball tournament: McDonald’s Texas Invitational Basketball Tournament (high school basketball)
The local economic benefit over 3 days: $2.7 Million
Visitors that travel for the tournament: 50,0000
Houston Chronicle | Pasadena, Deer Park prep for massive Texas Invitational tourney
120 Local Bond Elections in Texas in 2017. 91% Passage Rate
11 of the 120 local bond elections on November 7, 2017 were defeated. What did the defeated bonds have in common?
- not in the state’s largest cities or counties
- more than 1/2 were for schools or athletic fields
- the largest bond package defeated was $291 by Ector ISD
Texas Comptroller | Bond Election Results
Refreshing our recollection:
The $500 Million + bond ballot items:
- Austin ISD $1,050,984,000 for New Schools, School Improvements, Technology, Transportation
- City of Dallas $533,981,000 for streets and transportation
- Eagle Mountain Saginaw ISD (Tarrant Co.) $524,700,000 for New Schools, Growth, Athletic Fields and Security
- Ft. Worth ISD $750,000,000 for New Schools, Renovations and Additions
- Katy ISD $609,204,553 for New Schools, Renovations, Expansions, Technology and Security
The little guys:
- Coahoma ISD $4,000,000 for Atheltic fields
- Dekalb ISD $2,500,000 for Gymnasium
- Farmers Branch $4,000,000 for Street and Station Improvement
- Farmers Branch $4,000,000 for Neighborhood Improvements
- Grapevine $3,900,000 for Animal Shelter
- Grapevine $4,800,000 for Golf course
- Highland Village $2,860,000 for Reconstruction of Streets
- Highland Village $4,290,000 for Park and Recreation
- Laneville ISD $3,794,000 for School Additions and Renovations
- Laneville ISD $2,949,000 for New Gym and Auditorium
- Little Elm ISD $4,500,000 for Refunding
- Mineral Wells $3,960,000 for Installing Water Line
- Murphy $1,735,000 for Public Safety Facilities
- Murphy $1,315,000 for Improvements to Municipal Building
- Murphy $4,400,000 for Parks and Recreation
- Plainview $3,800,000 for Firestation
- Plainview $3,800,000 for Pool Project
- Plainview $1,480,000 for Street Scape Plan
- Plainview $1,500,000 for Athletic Fields
- Waller $1,315,000 for Civic Center
The local governmental entity breakdown:
- 49 Cities
- 56 ISDs
- 1 Community College District
- 11 Counties
- 2 Water District
- 1 Navigation District
Local Trend Update. The D.A., the annexation, and the election.
The annexation plan of Ranger College that included anop-ed from the Erath D.A. refuting allegations that opponents would be prosecuted, has failed to pass.
Those touting victory include Empower Texas | WEST TEXANS DEFEAT BIG GOVERNMENT BY INCREDIBLE MARGIN
The measure was defeated 97% to 3%.
Refreshing our recollection:
Where on earth is this happening? Erath County Texas
What tax increase is involved? An election concerning Ranger College annexation and taxation involving a potential 43 cent property tax.
How did the District Attorney Get Thrown Into This?
- In several Erath Co. publications, supporters of Ranger College threatened that the D.A. would bring felony bribery & coersion charges against the opposition. Seriously.
- The Erath Co. District Attorney published an Op-Ed to dismiss the claims completely.
Lege Trend. 5 Recommendations to Reduce Pension Liability. Land of the Ducks.
The state: Oregon
Goal of the Pension Task Force: How to reduce the unfunded liability in Oregon’s pension systems
The recommendations:
- harvesting some of the state’s timberland
- selling state-owned real estate
- privatizing state universities
- creating a new investment fund for the excess cash held on the balance sheets of cities, counties and school districts
- transfer surplus capital held by Oregon’s hybrid workers’ compensation system
Thank you for subscribing to our newsletter.
Great things are just around the corner!