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Finance & Revenue
Finance & Revenue
LOCAL TREND. Enforcing & Requiring Job Creation. TX Local Economic Development Agreements.
Activist groups in Houston want the city to include enforceable job creation in its economic development agreements.
Texas Organizing Project purports that 56% of Houston’s economic development agreements had no enforceable job creation requirements.
Houston Public Media | Coalition Wants Tax Abatements To Require Help For Houston Economy
NEW STUDY. Pensions. Alternative Investments. Lower Returns. 2 reasons why.
The Center for Retirement Research at Boston College has a new report that says for every 10% increase in alternative investments by a pension system, the pension’s rate of returns decrease.
2 Conclusions from the Center for Retirement Research:
- Hedge funds were the major drag on pension overall returns
- Alternative investments do not protect against stock market volatility
1st of its kind tax. An Adult Bike Tax.
Oregon became the first state to tax adult bikes of $200 or more. Each bike will be taxed $15.
Oregon does not levy a regular sales tax. The $15 tax is dedicted to Connect Oregon program, that funds projects serving multiple modes of transportation.
The rational for the tax: because bikes who use roads should contribute too.
State Puts Cost on Pension Double Dipping. $23 Million Per Year via enabling statute.
Nevada estimates that double dipping pensioners cost taxpayers $23 million per year.
Where does the $23 million annual price tag hit?
- strains the pension systems. in 2016, the largest retirement system paid out $300 million more than contributions
- Nevada’s law is more generous than average. Nevada allows elected officials to double dip and any person who holds a job that is “critical and hard to fill”
- Only 10 states are confirmed to have the “critical and hard to fill” exception for double dipping
Las Vegas Review Journal | Pension system perks cost taxpayers $23 million a year
By the Numbers. State and Local tax Rates. Who is high. Who is low.
Combined state and local sales tax rates for the U.S. look like this:
- #1 Louisiana (10.02 %)
- #2 Tennessee (9.45 %)
- #3 Arkansas (9.34 %)
- #4 Washington (9.20 %)
- #5 Alabama (9.03%)
- #10 California (8.48%)
- #12 Texas (8.17%)
- #28 Florida (6.80%)
- # 33 Pennsylvania (6.34%)
- The lowest combined rate: Alaska 1.76%
Tax Foundation | State and Local Sales Tax Rates, Midyear 2017
Proposed Dark Store Legislation Triggers More Dark Store Claims Up North.
Michigan Legislature is considering reigning in dark store tax challenges. In the mean time, more towns are preparing for a rash of “dark store” tax challenges.
In Somers, MI city council engaged outside counsel to fight a new dark store tax challenge from WalMart and Sams Club. The property appraisals had been flat since 2012 with no challenges. This marks the first challenge to the appraisal.
Kenosha News | Somers anticipating “dark store” tax challenge from Wal-Mart
Bipartisan End to Stadium Building Bonds? 3 supporting arguments
Economic Arguments for ending the tax benefit of stadium bonds:
- stop financing big business of professional sports on the backs of taxpayers
- stadium bonds are costing taxpayers $3.2 billion since 2000
- there is $20 trillion in federal debt, stadium bond subsidies are waste that needs to be eliminated
ESPN | Senators aim to stop use of municipal funds to finance stadiums
3 Reasons Houston Chronicle Editorial Calls for Special Session Commercial Appraisal Reform.
Houston Chronicle Editorial, Dark stores: Big box retailers’ strategy to cut property appraisals will harm local communities, supports adding commercial property appraisal refrom to the special session:
- Texas should learn from Michigan where dark store property tax reductions harmed revenues
- the current Comptroller estimate of local government revenue loss is $2.9 billion
- Its not only Big Box retailers using dark store arguments to reduce property taxes, it is other businesses too
Lege Trend. Fantasy Sports Bills Drafted to Include Legalized Sports Gaming.
Mississippi’s fantasy sports bill includes 2 ways for sports betting to be legal in Mississippi if the US Supreme Court overturns the nationwide prohibition:
- Mississippi removed this provision from its fantasy sports bill:
- (a) No wagering shall be allowed on the outcome of any athletic event, nor on any matter to be determined during an athletic event, nor on the outcome of any event which does not take place on the premises.
- Mississippi provided for legal sports betting should it become legal
Mississippi’s H 967 (2017)
Biloxi Sun Herald | Supreme Court decision could make it ‘another 1990s’ for Coast economy
Legal. 10th Amendment + US Supreme Court + Sports Gambling = Taxable State Revenue?
The U.S. Supreme Court will hear Christie v. NCAA.
What is New Jersey arguing in Christie v. NCAA? New Jersey is arguing that the 10th amendment prohibits the federal government from banning sports betting. (There’s a carve out for Nevada).
What would a US Supreme Court ruling for New Jersey mean to states? The ability to tax spots gambling revenue.
Sports Illustrated | All bets are off: Supreme Court to review sports betting ban
SCHOOL FINANCE. Case Study on ESAs in North Carolina. No Accountability.
The North Carolina Capitol Broadcasting Company says the implemented educational savings accounts were created with noi accoutnability that allowed for:
- recipients to be private schools that have no standards nor accrediation
- recipients can be entities that are not lawfully created businesses
- recipients do not have to be schools
- the state’s top recipient of ESA funds is being investigated for the embezzlement of nearly $400,000 in employee tax withholdings
LOCAL TREND. Utility Tax Repeal or Repeal Sanctuary City Policies. Right Pushes Hard.
Initiative & Referendum in small cities in California wants to stop sanctuary city policies by repealing the city’s utility user tax.
The initiative and referendum is being pushed until the targeted cities repeal their sanctuary city policies.
Rulemaking Leads to Lawsuit. Retroactive tax for Taxable Nudity. Clothing Included.
In January 2017, the Texas Comptroller re-defined what constitutes a strip club, a sexually oriented business, that should be assessed the strip club tax.
The new definition of strip club includes individuals that are fully covered in “paint, latex, wax, gel, foam, film, coatings, and other substances applied to the body in a liquid or semi-liquid state.”
In 2015, the Comptroller began applying the stip club tax to latex clothed performances. The $5 surcharge was retoractive to 2008. Resulting tax bills were in the millions for these otherwise non-strip club businesses.
The legislative issue is that the statutory definition of strip club for the $5 tax would not be triggered by latex or scantily clad performers. The Comptroller rules & the statute don’t align, welcome to litigation and legislative fix territory.
Roped into the new tax are establishments that ” sponsor sporting events with scantily clad cheerleaders, restaurants having scantily clad waitresses and businesses hosting musical guests.”
Courthouse News Service | Strip Clubs Fight Texas’ Definition of Taxable Nudity
Lege Trend. Land of Lincoln. Fantasy Sports Legislation in a Special Session.
Illinois Legislature is in a special session on its budget. During the regular session, the budget included revenue from a gaming bill that included legalization of fantasy sports.
SCHOOL FINANCE. Lege TREND. How the Tarheel State Adopted Education Savings Accounts with Procurement Opportunity.
North Carolina Legislature adopted educational savings accounts by:
- Including $450,000 of funding in the state budget
- $9,000 a year deposited into a taxpayer’s education savings account
- Requirements placed on the taxpayer using an educational savings account:
- Use limited to public or private school tuition, transportation to school, educational materials and therapies with required quarterly expense reports
- Procurement Opportunity for financial institutions: A debit card linked to the ESA account
North Carolina Public Radio | Three Big Changes In Education Policy That Made The Budget Deal
State Taxes Weed. Court Says 3 Tier Distribution for Alcohol Applies. Drafting Error or new Liquor Distribution?
A court in Nevada ruled that the 3 tier liquor distribution applies to marijuana. That means for the weed to be sold and taxed in dispensaries, a liquor distributor must deliver it.
The requirement of liquor disgtributors to be involved began because voters approved an initiative that said marijuana would be regulated in a manner similar to alcohol
Courthouse News Service | Booze Dealers Retain Exclusive Rights to Pot Distribution in Nevada
Op-Ed. Texas State Rep. Burrows. Special Session Priorities.
Texas State representative Dustin Burrows is prioritizing the following issues for the upcoming special session:
- Property Tax Reform
- Greater Transparency
- Details on which taxing jurisdiction sought more funds
- Reign in the rollback rate which is effectively at 8%
- Fix ASATR
- extend ASATR
- eliminate the small-school adjustment
- Pro-Life Initiatives
Lubbock Avalanche Journal | Dustin Burrows: Key issues that need to be addressed in special session
4 Veto Highlights. Local Tax Bill.
HB 2182 By Reynolds | Zerwas | Miller relating to the authority of a county assistance district to impose a sales and use tax was vetoed to:
- prevent a possibility
- the interpretation could have allowed a local sales tax rate above the legal limit
- “The two percent cap on local sales tax must never be exceeded. “
- The veto statement goes on to blame the drafting. Bad draft. The next bill draft needs more clarity.
Governor Abbott Vetoes HB 2182
Lege Trend. Taxing Marijuana. Tax Rates & Revenue Dedication in the Silver State.
Nevada Governor Sandoval (R) signed 3 pieces of legislation taxing marijuana at the following rates:
- As low as $50 for Medical marijuana cards
- 10% excise tax on sales of recreational marijuana
- Potential annual revenue: $70 million
- Revenue dedicated to Rainy Day Fund
- 15% wholesale tax on both medical and recreational marijuana
Senate Bill 487, Senate Bill 344 & Assembly Bill 422 Nevada 2017
Governing | 3 Marijuana Regulations Signed, 1 Vetoed in Nevada
Wine Taxes. High. Low. Texas is #44.
How the excise tax for a gallon of wine compares across the states:
- #44 Texas & California at $0.20
- #1 Kentucky $3.17
- #2 Alaska $2.50
- #3 Florida $2.25
- #4 D.C. $1.79
- #4 Iowa $1.75
- #5 New Mexico & Alabama $1.70
- #7 Virginia & Georgia $1.51
- #9 Maryland & Rhode Island $1.40
+1 State. Hybrid Pension Plans. 3 Key Pieces of informed:intel from the Bill.
The state adopting new hybid pension plans: Pennsylvania
What limitations were put around the new hyrbid pension plans in PA’s SB 1 (2017)?
- Future, non-high risk employees will be placed in a plan that allows them to receive 1/2 of their benefits from the current taxpayer-funded plan & 1/2 from a 401(a) defined contribution plan
- Current employees have an option to opt-into a defined contribution plan
- New employees are hired into the defined contribution plan
Chief Investment Officer | Pennsylvania Pension Reform Bill Becomes Law
Wall Street Journal | Pennsylvania Lawmakers Compromise on Pension-Overhaul Bill
Americans for Tax Reform | Pennsylvania Pension Reform Aims to Help Taxpayers & Beneficiaries
State #12 Legalizes Daily Fantasy Sports. 6 Bits informed:intel from the Bill
Vermont becomes the 12th state to legalize daily fantasy sports.
S 136 in Vermont sets up a regulatory framework that:
- Delegates to the State Attorney General and Excutive Branch power to establish a registration fee and tax for daily fantasy sports
- Defines fantasy sports to concern knowledge and skill of the player
- Requires daily fantasy sports companies to establish commercially reasonable policies to prevent employees and professional athletes from participating
- Requires players to be over 18
- Data security measures for fantasy sports data
- Require 3rd party indpendent audits
The other states with daily fantasy sports regulations:
- New York
- Massachusetts
- Tennessee
- Mississippi
- Colorado
- Missouri
- Indiana
- Virginia
- Kansas
- Maryland
- Arkansas
- + Nevada which requires a gaming license
National Law Review | Vermont Becomes Second State to Legalize Daily Fantasy Sports in 2017
SCHOOL FINANCE. 5 Points from Lt. Gov. "Truth about Education Funding in Texas"
- It is misinformation that the Legislature cut education funding
- Texas state budegt funds $60 million for public education + $28-$30 million in local property taxes for public education
- Education is 52% of state general revenue
- SB 1 fully funds education + funds it for 80,000 projected new students
- The Texas House killed ASATR Funding by not agreeing to the Senate’s version of House Bill 21
Statesman | Two Views: The truth about education spending in Texas, by Dan Patrick
+1 City. New Beverage tax on sodas and coffee.
City: Seattle
The tax would impact which beverages: soda, fruit juice, energy drinks, sweet tea, and sugared coffees
The tax: 21cents per can of soda in the city limits
How does the sugar tax compare to the state’s beer tax? It is 8 times higher
The opposition included an unlikely alliance of business community & labor unions.
SCHOOL FINANCE TREND. A Plains State. Unconstitutional School Finance System. 38 Points in Legislative Solution.
The Kansas Association of School Boards summarizes the pending school finance fix in Kansas with these 38 points:
- Overall funding and base state aid: House base of $4,006 in FY 2018 and $4,128 million; three-year rolling average of consumer price index (Midwest) beginning in 2020, no earmarking of appropriations for weightings.
- Kindergarten and preschool at-risk: count kindergarten as 1 FTE regardless of attendance in FY 2017-19 or whichever year district begins to offer all-day kindergarten.
- Three-year average enrollment option: permitted for districts receiving federal impact aid.
- Military students: adjust enrollment by the gross increase in military students from Feb. 20 count.
- Out-of-state students: next two years, count as 1 FTE; 2019-20 and 20-21, count as 0.75 FTE; 2021-22 and beyond, count as 0.5; exemption for students whose parents are enrolled in the district or were enrolled previous year.
- 20 mill levy: reauthorized for two years.
- Local Option Budget: up to 33 percent of foundation aid; subject to protest petition over 30 percent but not election.
- Artificial LOB base: indexed to three-year rolling average of CPI beginning in FY 2020.
- Supplemental (LOB) state aid: equalized 81.2 percent as under prior law; use three-year rolling average in assessed valuation per student beginning in FY 2019.
- Transportation aid: use Legislative Post Audit formula with 2.8 factor; four-year grandfather for districts that would receive less than in current year.
- Low and high enrollment weighting: as previous law.
- Bilingual weighting: greater of contact hours enrollment at previous weighting (0.395) or headcount bilingual enrollment weighting (0.185).
- At-risk weighting: 0.484 with 10 percent minimum; up from 0.456 under previous law.
- High density at-risk: same as previous law, except also applies to individual school buildings in districts that do not qualify.
- At-risk education funds: must be used for best practices identified by State Board, beginning in FY 2019.
- CTE weighting: Same as previous law in FY 2018 and 2019; then expires.
- Career and postsecondary education fund: authorizes expenditures for CTE programs, postsecondary courses, and distance learning courses.
- CTE cost study: requires KSDE to do a cost study of CTE programs and make recommendations in 2018.
- New facilities weighting: same a previous law but only for bonds approved prior to July 1 2015.
- Special education weighting: special education aid divided by base aid per pupil.
- New special education funding: $12 million added each year; goes through current formula, not regular FTE enrollment.
- Ancillary weighting: same as previous law.
- Cost-of-living weighting: same as previous law.
- Declining enrollment weighting: authorized at 50 percent of amount provided for FY 2018 under previous law; expires after next year (2018).
- Virtual school aid: same as current law ($5,000 for full time students; $1,700 for part-time students; $709 per course for adult students).
- Extraordinary declining state aid: districts may apply to State Board for grant funding if having extraordinary enrollment decline since 2014-15.
- Accreditation system: must equal or exceed goal of each student meeting the Rose capacities; State Board report on system each January.
- USD financial report: KSDE makes financial report each January showing funding and expenditures, with demographic information.
- Legislative reviews: revise base aid by July 1, 2021; review virtual aid in 2020; review successful schools model in 2022 and 2026.
- Legislative Post Audit Reviews: 2018 – virtual schools; 2019, 2022 and 2025 – cost to achieve performance outcomes; 2020 – at-risk student funding; 2021 and 2026 – successful schools comparison; 2023 – bilingual weighting; 2024 – transportation costs.
- Capital outlay authorized uses: expanding to include utilities, property and casualty insurance and maintenance of existing fixtures.
- Capital outlay state aid: equalized as under current law.
- Bond and interest aid: districts with less than 260 students must obtain State Board approval for aid for new facilities; state aid is prohibited for extracurricular facilities as defined by the State Board unless for safety or disability access; the State Board may not authorize new bonds statewide in excess of the amount of bonds retired in the previous year; exemptions are districts which have not had a bond issue in the previous 25 years or have not reached the 14 percent cap requiring State Board approval.
- Property tax abatements: allowed for 20 mill statewide levy; not allowed for capital outlay levies.
- Increment tax financing: excludes capital outlay levies.
- Tax credit scholarship act: requires participating private schools to be accredited by the State Board or an accrediting agency approved by State Board by July 1, 2020; total cap on contributions is not increased but individuals and LLCs may make contributions (currently limited to corporations).
- Public policy goal for instruction: no change from current law.
- Sunset of school finance formula: July 30, 2027.
Lege Trend. Tax Weed to Fund Rainy Days.
Which state implemented a new 10% tax on recreational marijuana? Nevada
What will Nevada fund with the weed tax? Nevada’s Rainy Day Fund
What was the initial funding source for the weed tax? Educational Savings Accounts.
Las Vegas Sun | ESAs’ loss of earmarked money from pot tax is rainy day fund’s gain
3 Bits informed:intel to know now. More Legislative & Legal Action on County Energy Transportation Reinvestment Zones
What are County Energy Transportation Reinvestment Zones? In 2013, the zones were created to allow for a funding mechanism for counties whose roads required repeair as a result of the shale boom.
In 2017, the legislature repealed County Energy Transportation Reinvestment Zones, why does this still matter? There is a pending lawsuit invoilving the family of formner Texas Governor Dolph Briscoe and Dimmit County.
What legislative issues will emerge if the pending lawsuit moves forward?
- Whether the 113 counties that created these reinvestment zones did so without constitutional authority and thereby the property taxes levied by the zones are unconstitutional.
- Would the unauthorized property taxes have to be returned to tax payers?
- How far would the repayment of the property taxes reach and to how many reinvestment zones?
- What does it mean for the future of special districts?
San Antonio Express News | Legendary Briscoe family sues Dimmit County
SCHOOL FINANCE + Business Trend. How to pay for busing students to schools out of area?
Who is promoting ride share for public education? U.S. Education Secretary DeVos
Are there local governmental entities embracing ride share for public education? Yes, Denver’s school district is providing transportation to underserved students attending both traditional public and charter schools
How do libertarian types want ride share for education to be funded? Educational Savings Accounts
+1 State Fantasy Sports & Online Gambling. Read the Bill.
Which state legislature is moving online gaming and fantasy sports? Illinois
What is considered key to legalizing and regulating daily fantasy sports in Illinois? Casino approval of daily fantasy sports
What entities will be permitted to operate in Illinois? Casinos with a physical location in Illinois
Forbes | Illinois Could Be The Next State To Offer Online Gambling
new Revenue Trend. State Uses Novel Approach to Capture Online Sales Tax.
State: Massachusetts
How Massachusetts is capturing new sources of online sales tax revenue: re-defining how a retilaer has a presence in the state
What is the new definition of presence in Massachusetts to trigger sales tax: It’s black and white- an app is a presence, a cookie left on a mobile device is a presence.
What’s the response from NetChoice, an association of ecommerce sites: “your business is subject to the taxation [and] regulation in any state where a user simply enters their website address. That can’t hold up to legal scrutiny, because it certainly doesn’t hold up to common sense.”
Texas Public Radio | Massachusetts Tries Something New To Claim Taxes From Online Sales
Tax Proposal. Tax Restaurants to Pay for Nursing. 3 Key Points.
Originators of the tax plan: California Nurses Association
The tax: new taxes on consumer purchases like new cars and dining out at restaurants, and business revenue
The revenue would fund: A “Canadian” style healthcare system with no premiums, no deductibles and no out of pocket costs for prescriptions
How would California pay for this?
- new taxes, see above
- savings realized from cost savings from reductions in executive salaries and administrative costs for health care billing
- health care efficiency, reducing unnecessary or inefficient medical services
-
federal funds
Taxing Festivals. States that Tax Admission and States that Exempt Certain Festivals.
3 Ways Festival Admission Tickets are treated under state tax laws:
- Wisconsin & Illinois impose a sales tax on the cost of admission tickets to festivals.
- Texas does not impose a sales tax on an admission ticket for fesitvals operated by a 501c3.
- Massachusetts imposes NO tax on admission tickets.
What about promotional items given away at festivals?
- Colorado specifically imposes a use tax on the entity giving away products
- California, Washington & Rhode Island also impose a use tax on swag.
Bloomberg BNA | SALES TAX SLICE: PRIDE FESTIVITIES COULD BE A MAJOR SOURCE OF REVENUE FOR STATES
7 Examples of Taxing Marijuana
- Colorado.
- 15 % excise tax
- 10 %state tax on retail marijuana sales (falling to 8 percent as of July 1, 2018)
- 2.9 % state sales tax
- local sales taxes (the average rate in Colorado is 4.6%)
- local excise taxes on marijuana, such as the 3.5% tax in Denver
- Alaska
- flat tax of $50 per ounce
- California
- 15% sales tax
- $2.75 tax per ounce on leaves
- Nevada
- 15% excise tax
- Oregon
- 17% sales tax
- Washington
- 37% sales tax
- Maine
- 10% sales tax
3 Bits informed:intel. The Conservative Talking Points. Texas' State Budget.
A conservative cadre made the following statements about SB 1:
- “SB 1 comes within several millions of dollars of the 2018-19 Conservative Texas Budget target of $218.5 billion—after accounting for the delay of $1.8 billion in transportation appropriations.”
- “The 86thTexas Legislature will have approximately $2.7 billion to spend in its supplemental appropriations bill in 2019 in order to remain under the final CTB limit of $221.23 billion for the entire 2018-19 biennium.”
- “Though the budget increases public education spending without reforms such as school choice, Texans would benefit from the passage of what would be a second consecutive Conservative Texas Budget.”
The conservative organizations, http://www.conservativetexasbudget.com/:
TEXAS PUBLIC POLICY FOUNDATION
AMERICANS FOR PROSPERITY, TEXAS
SCHOOL FINANCE TREND. 3 ESA lessons from the Silver Mine State.
Backgound: Nevada passed Educational Savings Accounts a couple years ago. The Nevada Supreme Court found the funding mechanism, rooted in education funding, unconstitutional under the Nevada Constitution. In 2017, the Nevada Legislature is trying to fix it.
The 3 Deals to Fix ESAs floated in Nevada Legislature:
- A sliding scale for ESAs, less household income, more ESA
- Reduced funding down from the requested $60 Million to $20-$30 million
- Approval of ESA opponent initiatives
Las Vegas Review Journal | Dealings continue at Nevada Legislature in battle to fund ESAs
+1 Red State Moving Fantasy Sports Regulation. 3 Bits intel. No DFS Kiosks.
State: Ohio
The fantasy sports regulation:
- fantasy sports are explicitly prohibited at kiosks or at machines
- state licensing of Daily Fantasy Sports by the Ohio Casino Control Commission
- The Ohio Casino Control Commission will set the licensing fee by rule
- defines fantasy sports as knowledge and skill
WKSU | Ohio House Passes A Bill to Further Regulate “Fantasy Sports”
Lege Trend. Sales Tax Holidays for Doomsdayers and Boy Scouts?
State: Florida
The Sales tax holiday created: A sales tax holiday for hurricane supplies (and school supplies)
What does the hurricane preparedness sales tax holiday look like?
- Its a June 2-4, a three-day emergency preparedness sales tax holiday
- that excepts from sales tax:ice, batteries, first-aid kits, gas tanks, coolers and generators
Sun Sentinal | Gov. Rick Scott signs tax holidays for hurricane and school supplies
State Goes into Economic Development Special Session
State: Missouri
The economic development goal:
- return jobs
- help a region of the state that’s suffered economically since a major aluminum smelter closed last year
What lure do the companies need to move into the economically repressed area of Missouri?
- a cheaper electric rate with a longer contract than is allowed under current law
What’s the opposition say? Doing this would allow electric companies to raise rates on residential customers
AP | Missouri Lawmakers Power up for Electric Special Session
What does TPPF Polling Say is What Texans Want from the TX Legislature?
- 20% want lower property taxes
- 17% school finance reform
- 16% no new spending, no new taxes
- 15% don’t know
- 13% more funding for CPS
- 12% more funding for border security
- 4%lower business taxes
- 4% school vouchers
Can a City Save Revenue By Privatizing an Airport? Anatomy of a Privately Run Airport.
The City: St. Louis
What problem is Lambert International facing? The airport handles 1/2 the traffic it did 10 years ago when St. Louis was no longer a hub for a major airline
Whose genius idea is it to privatize the airport? A limited government think tank, Grow Missouri
How does an aiport privatize? Requires FAA permission,
What beenfits can a private airport operator bring?
- strategic approach to running the airport
- improve the facilities to attract new vendors
- negotiate better flight schedules with airlines
- lure more cargo business
Has this worked elsewhere? Yes, its common in Europe and airports in Memphis, Indianapolis and Louisville have improved their fortunes by expanding cargo operations.
Governing | Should Struggling Airports Be Turned Over to Companies?
Lege Trend. Bill to Allow Fantasy Sports Operations in Casinos. 5 Pieces of Informed Intel.
State: New Jersey
The Bill: Assembly Bill 3532
What would it allow? Allows racetrqcks and casinos to apply for fantasy sports licenses
The licensing agency in New Jersey: the state Division of Consumer Affairs
The tax/fee on fantasy sports operators in NJ: quarterly fee of 10.5% of gross revenues on companies that receive permits
NJ.com | N.J. could soon allow casinos to run daily fantasy sports
Courier Post | New Jersey Assembly votes to regulate daily fantasy sports
Legal Trend. Fantasy Sports + Horse Racing= Hold Your Horses. 5 Points to Know from the Court Ruling.
The State: California
The Court: U.S. District Court for the Central District of California
The big deal in the ruling: This form of fantasy sports is gambling.
The California court’s ruling could be persuasive to pending suits in these states: Illinois, Massachusetts, Texas and New York
The Recorder | Fantasy Sports Operators Eye Calif. Ruling on Horse Racing
Pension Debt Funding Ratios. By State. By the Numbers.
Lowest 25 funding ratio states (below 80% funded):
- Includes Texas with stated unfunded liablity of $69,352Million & a market value of unfunded liabilities at $243,718 Million
- Also includes:
- Georgia at $22,150 Million in stated unfunded liability & $92,310 million in market value of unfunded liabilities
- Colorado with $29,583 million in stated unfunded liabilities and $66,388 million in market value of unfunded liabilities
- New Jersey with $135,701 million in stated unfunded liabilities & $161,856
Top 25 funding ratio states (above 80% funded):
- California, Florida, New York
2 Highest Funding Ratios:
- South Dakota
- Wisconsin
Hoover Institution | Monday, May 15, 2017 | Hidden Debt, Hidden Deficits: 2017 Edition
SCHOOL FINANCE. 2 Economic Benefits of Federal Private School Voucher Credit
A report by: Institute on Taxation and Economic Policy & School Superintendents Association
Lays out 2 arguments supporting federal private school vouchers:
- profitable tax shelters by high-income taxpayers
- Economic boon for corproations and investors
How does the federal tax credit work? Offers “supersized” incentives to donate to organizations that distribute private school vouchers
Do residents of every state enjoy the tax benefits? No, only 17 states with private school voucher tax credit
Tax Justice | Investors and Corporations Would Profit from a Federal Private School Voucher Tax Credit
Lege Trend. Lowering State Borrowing Costs by Adopting New Bonding Mechanism
State: Connecticut
The new bonding mechanism sought to reduce CT’s cost of borrowing: investors revenue bonds
How are investors revenue bonds financed? A tax-secured revenue bond that is paid back directly from the state’s income tax revenues
Governing | Fresh Off Another Downgrade, Connecticut Has a Plan to Lower Borrowing Costs
TREND. Setbacks for Fantasy Sports Regulation. East, Northeast and South. 4 Setbacks.
States that have not passed fantasy sports regulations: Texas, Florida & North Carolina
State that is increasing penalties on fantasy sports operations: Massachusetts is considering hefty fines on operators as a mechanism to replace the 2016 temporary fantasy sports regulations.
Salem News | Fantasy sports sites could face hefty fees
Legal Sports Report | Daily Fantasy Sports Industry Gains Victory After Setbacks In Texas, Florida
WRAL | Fantasy sports bill fails in committee
TREND. Paying Down Pension Liabilities. 3 Points from the Garden State Proposal to Use Lottery Funds to Pay Pension Debt
State: New Jersey
3 points from Gov. Chris Chritie’s proposal to use lottery proceeds to pay down pension debt:
- ease the burden on future budget writers, by reducing the amount of pension liabilities
- Automatic injection of inject a $13.5 billion
- Dedicated funding source for 30 years
How does this work? New Jersey’s lottery will become an asset of the pension system
NJ.com | What you need to know about Christie plan to slash N.J. pension debt with lottery cash
3 Ways TPPF says Cities Are Part of the Property Tax Problem. Committee Testimony Snapshot.
Relying on information from the Comptroller’s website, TPPF says
- Cities impose a property tax burden of $305 per capita or $1,220 for a family of four
- The tax burden has grown 137% since 2000 while population & inflation is 82%, based on TPPF analysis
- City propety taxes have grown by 5.82% every year between 1996 and 2015
The looming threat to municipal bonds.
Smoke signals are being sent that Congress could act to cap or limit the tax benefits of tax-exemopt municipal bonds.
What would happen to cities if the benefits of tax exempt municipal bonds is removed?cities would find it far more expensive to finance capital improvements and other infrastructure
What has been financed by tax-exempt municipal bonds?
- 4million miles of roads
- 500,000 bridges
- 16,000 airports
- 900,000 miles of water pipes
- municipal bonds support more than 1.5 million civic projects
+1 Red State Extending Tax Credits for Economic Development.
Arizona approved last minute tax incentive extension for spurring business development.
Arizona Senate Bill 1416 (2017)
Arizona Republic | Arizona Legislature ends session with tax, welfare bills on final day
Tax Incentives Gone Awry. County Offers Tax Breaks for Noah's Ark Theme Park. No one came 2 by 2.
The County: Grant County, Ky.
Grant County’s solution to its financial woes was to offer tax incentives to: the Ark Encounter, a religious theme park that includes a “life-sized reconstruction” of Noah’s ship, along with a creation museum
The additional county revenue with the Ark Encounter? $0, the tax incentives were too steep
What seems to be the economic development flaw in Grant County’s plan?
- few other attractions nearby to entice visitors
- not enough hotel rooms to accommodate tourists
- not enough restaurants to draw tourists into local business districts
Sunshine State. Bids Adieu to Economic Development.
The Florida Legislature passed a budget that funds the agency that directs economic devleopment but does not fund:
- business incentives that Governor Scott relies on to lure businesses to expand or relocate in Florida
Governor Scott’s commented that Florida is out of the economic development game when the Legislature rejected his funding request.
News Service of Florida | Rick Scott: Florida’s Out of the Economic Development Game
Lege Trend. Making it a Crime to Interfere with a State Auditor Investigation.
The interference with an state auditor investigation: The University of California President, Janet Napolitano, intercepted and reviewed surveys sent independently to 10 campuses before they were submitted to the state auditor
The Legislative reaction: making it a crime to “intentionally interfere” with a state auditor’s investigation
State Increases Rural Hospital Tax Credit
Georgia’s SB 180 was signed by its governor to increase the rural hospital tax credit from 70% to 90%.
The goal of the tax credit: encourage more investment in rural hospitals as too few invested with the 70% tax credit
Atlanta Journal Constitution | Georgia governor signs into law 50-plus pieces of legislation
3 Points. Report Says Special Districts Lack Transparency.
Report by: U.S. PIRG, a public interest research group
Did they review Texas Special Disgtricts? Yes, and the 3 special districts from Texas have “received at least one Transparency Star from the Comptroller.”
The recommendation: “Districts should make available the most recently approved budget document on their website.”
Special Districts by the numbers in this report:
- As of 2012, more than 38,000 special districts nationwide
- 38% publish their most recent budget online
- 30% posted comprehensive annual financial reports
- 11 of the 79 sampled post NO budget information online
Governing | Most Special Districts Lag in the Transparency Department
Lege Trend. Dark Store Bills in theLand of Cheeseheads. . 4 Point Bill Package.
State: Wisconsin
The dark store bill package will:
- Overturn a 2008 court ruling that “property be assessed at its highest and best use,”
- Clarify that, for property tax purposes, real property includes any leases, rights and privileges pertaining to the property
- Require assessors to value property based on comparable properties “within the same market segment and similar to the property being assessed with regard to age, condition, use, type of construction, location, design, and economic characteristics,”
- Exclude vacant stores as comparable properties for valuing open stores
Lege Trend. Spending Bills with Data Security Requirements.
The federal spedning bill passed with the following language to increase funding across the baord for cybersecurity:
“strengthen our technical collection and analysis capabilities in cyberspace.”
Lege Trend. Gas Tax Increase Begets Initiative to Repeal Last tax Increase.
The gas tax: 12 cent increase on the gas tax added into the state budget
State: California
How long after the bill signing by the Governor did the initiative begin? a week
Sacramento Bee | Initiative filed to repeal California gas tax increase
Regulatory Trend. Expanding Business Taxes to Space Travel Income.
The state: California
The proposed rules to tax space income:
“gross receipts shall be attributed to this state based upon a mileage factor, weighted at 80 percent, and a departure factor, weighted at 20 percent ” California’s Porposed Space Travel Tax
Bloomberg | New Tax Frontier: California Offers Space Flight Rules
Opponents to Split Roll Property Tax Blame Pensions. 3 Key Pieces of Intel from out West.
The California legislative proposal: a split role property tax to increase business property tax
Supports say the split roll tax will fund: schools, libraries & police
Opponents say the split roll tax will fund:
- Pension liabilities.
- Local pension and health benefits consume local revenues and at CalPers and CalStrs.
- When pensions consumer revenues, or when CalPers or CalStars ask for larger contributions from local governmental entities, local entieis cut services like schools, libraries and police.
Editorial. 2 Reasons Senate Budget Trick is Legal but Wrong.
The Texas Attorney General issued an opinion that the Senate Budegt manuever to delay a transportation funding payment is likely legal.
In response, the Dallas Morning News offers an editorial, Texas Senate’s accounting trick may be technically legal, but it’s wrong, raising these points:
- the responsible thing for budget writers to do is to use the Rainy Day Fund
- There is a gaping funding hole in the state Child Protective Services and foster care system
TREND. Suburban County Economic Development Roadmap
The County: Parker County has a new EDC, the aptly named, Economic Development Council of Parker County.
Parker County’s inspiration: Katy Texas
The goals of the suburban EDC:
- “Not a good ol boys club”
- Will pursue, enhance, maintain and promote economic development and commerce in Parker County
- Utilizing a planned, non-political approach to seeking long-term economic growth
- Focusing on quality growth with sustainable employment
- County and City economic development groups will work together
- Create cohesive plan to take development to a new level
- Goal of bringing high paying jobs to the area & bringing the communities together
2 States Tie Fantasy Sports to Gambling Legislation. Ball and Chain.
Pennsylvania
- Fantasy Sports & Online Gambling being tied to each other’s fate
- Proposal is to tax online slot revenue at 54%
- A proposal calls for a 25% revenue tax on daily fantasy sports revenue & a $2.5 million up-front licensing fee
Florida
- Seminole gaming compact, a gaming expansion and fantasy sports are being tied to each other’s fate
SCHOOL FINANCE. Speaker Straus Statements on HB 21. 6 Points.
- More Money. HB 21 provides “more than $1.8 billion in additional funding for public education”
- More money across the board. “more than 95% of school districts and almost every charter school would receive more dollars per-student”
- Modern Calculations. “modernize the formulas”
- Local dollars stay local. allows “more taxpayer dollars to stay in their local schools”
- Less reliance on property taxes. “begin to reduce our over-reliance on local property taxes.”
- Less Robinhood. Reduces Robinhood payments by almost $400 million over 2 years
TEXPERS: Pension Rates of Returns by the Numbers.
36%: 19 of 52 Texas pension fund systems reporting an assumed rate of return of 8% or lower in 2011
78%: 61 of 78 Texas pension fund systems, reporting assumed rate of rteturn of 8% or lower in 2016
The impact: better pension health
Chief Investment Officer | TEXPERS: Texas Pension Systems in Better Health with Lower Target Rates
AG Opinion. 85R SB 1. 3 Reasons why the AG Chose the Senate Side.
In KP-0143, Attorney General Paxton sets up 3 reasons why the Senate’s funding mechanism of timing transfers to the State Highway Fund is a-ok in his book:
- The Constitution requires a transfer of net revenues, and the Comptroller says you can’t calucate “net” until after the fiscal year closes
- “Net revenue” isn’t defined, and if we look to precdent, other statutes and the dictionary, we agree “net” has to occur after a fiscal year ends
- The issue is simply- is it more important that the constitutional requirements focus on the money that is deposited or when it is deposited? The AG says money is more important than time.
Statesman | In budget fight, Attorney General Ken Paxton sides with Texas Senate
Houston Chronicle | Paxton rules $2.5 billion Senate budget plan legal
Local tax Trend. Berkeley passes Soda Tax. What happened after 1 year?
- 10% drop in sales of sugary drinks
- 16% increase in sales of bottled water
Kaiser Health News | As California Weighs Soda Warning Labels, Tax In Berkeley Shown To Dilute Sales
Lege Trend. 2 Reasons to tap Rainy Day Fund from the Dakotas
State: North Dakota
Supporters of tapping the ND Rainy Day Fund: 8 North Dakota State distinguished professors
The professors rational for tapping the Rainy Day Fund:
- cuts to higher education create long term economic impact to a state
- higher education quality will falter
Lege Trend: Pay Pension Costs with State Savings Fund. Keystone State Edition.
Pennsylvania wants to use which state funds to pay pension costs? The State’s Surplus Revenue Fund
What triggered this idea? PA’s Legislative Audit Advisory Committee voted to accept the audit report
Why does this sound familiar? Texas Comptroller Hegar proposed a similar idea in recent weeks.
PennLive | Let’s drain the Legislature’s slush fund and use it to pay for pensions: Dan Truitt
Statesman | Comptroller Glenn Hegar: Reform rainy day fund to tackle pension issue
informed:intel on March 23, 2017:
Comptroller Glenn Hegar proposes investing to meet Texas long term obligations.
The Comptroller’s proposed idea:
- set aside some state Treasury balances to address long-term obligation by either:
- reserving a portion of the existing Economic Stabilization Fund
- -or-
- capping the ESF and dedicating a portion above the cap to the permanent fund for long term obligations
- 7 states use long term investing on their severence taxes; including:
- Alaska, Montana, New Mexico, North Dakota, Utah, West Virginia and Wyoming
Comptroller | Investing to Address Long-Term Obligations
SCHOOL FINANCE: Western State. Revitalize ESAs. Legislative Trading. What you need to know:
State: Nevada
When did NV pass ESAs? 2015
What happened after NV passed ESAs? The Nevada Supreme Court declared the funding mechanism unconstitutional in 2016
The 2017 fix: Nevada Senate Bill 506 (2017)
The ESA buy-in for opponents: ESA amendments to gain favor for Majority Party proposals.
Is this opposite day?
- Each Chamber of the NV Legislature is controlled by Democrats
- The Democratic control is not strong enough to pass legislation without Republican support
Las Vegas Review Journal | The good, bad and ugly still alive in the Nevada Legislature
5 States with no Daily Fantasy Sports
None of these states have permitted fantasy sports, nor enacted legislation to study daily fantasy sports:
- Iowa
- Washington
- Montana
- Louisiana
- Arizona
Legal Sports Report | No Joy In Iowa For Daily Fantasy Sports, As Bill Is Not Likely To Pass
The TIRZ. The $2.5 tax increment. The $72M annual budget. The Allegations. The Bill to Fix it.
The TIRZ: Memorial City TIRZ
The tax increment of this TIRZ: $2.5 Billion
The annual budget of Memorial City TIRZ? $72 million
The allegations:
- TIRZ board members are “developer-friendly appointees whose vote in lockstep with the developers’ interests”
- The TIRZ serves to benefit developers
The bill to fix it: HB 4046 requiring TIRZ board memebrs to live within 2 miles of the TIRZ
Lege Trend. Tax Incentives for Manufacturers. Via the Free State.
State: Maryland
The manufacturing tax incentive bill signed by the Governor will:
- Apply to “distressed counties” + 3 counties chosen by the state Commerce Department
- Help new manufacturers creating jobs over the next 10 years by offering:
- sales tax refunds
- state property tax credits
- relief from filing fees
- 5.75% credit against income tax for the wages they pay
- allows for accelerated depreciation to write off the cost of capital purchases in one year
- capped at $10 million a year statewide
-
In exchange for the incentives, companies must:
-
offer programs that allow their employees to improve their job skills
-
Governing | Maryland Hopes to Lure Manufacturers With Tax Breaks
Tax Foundation. Property Tax Reliance. By the Numbers.
The states most hevily reliant on state and local property taxes are:
- #1 NewHampshire 66.1% of state and local tax collections
- #5 Texas 40.4%
- #2 New Jersey 47.5%
- #3 Rhode Island 44.6%
- #4 Vermont 42.2%
- #6 Maine 39.9%
- #7 Connecticut 38.3%
- #8 Montana 38.2%
- #9 Illinois 36.5%
- #10 Massachusetts 36.3%
- #38 California. 25.4%
- #13 Florida 35.7%
- #30 Ohio. 28.6%
- #27 Pennsylvania 29.8%
Tax Foundation | To What Extent Does Your State Rely on Property Taxes?
Business Trend. No to Film Incentives. #1 reason why.
Company: Netflix
Netflix’s position on film incentives: Invest in infrastructure over incentives
Netflix’s rational for not chaing film tax incentives:
- chasing tax incentives in other states produces diminishing returns on screen
- tough on workers
- grinds on talent
Southern State Passes Fantasy Sports. No Consumer Protections. No Regulations. Just Tax. Read the Bill.
State: Arkansas
What does Arkansas’ bill to legalize fantasy sports look like?
- 8% tax on gross fantasy sports revenue
- no consumer protections
- no registration or license requirements
- a finding that fantasy sports is not gambling
11 States Legalize Fantasy Sports.
- New York
- Massachusetts
- Tennessee
- Mississippi
- Colorado
- Missouri
- Indiana
- Virginia
- Kansas
- Maryland
- Arkansas
3 Points. New Report. States moves from defined benefit to defined contribution
The report: “Why Pensions Matter“
The group behind the report: National Public Pension Coalition
In the 1990s Viriginia & Michigan ceased defined benefit plans & this is what happened:
- MI & Va moved to 401K style plans
- State costs went up
- Retirement security for state employees, teachers and lawenforcment “plummeted”
- In 2003, VA found that a defined benefit plan cost the state 1/2 the cost to administer
- VA reopened the state pension & offered a voluntary 401K
- 78% opted for the pension
- In Michigan costs have increased and funding levels have decreased leaving thr average social worker with $37,000 in a 401K and a monthly retirement annuity of $400
The Hill | Public pensions matter — just ask Michigan and West Virginia
3 Pension Reforms from the Palmetto State.
The Palmetto State: South Carolina
The South Carolina Pension Reforms.
- More Contributions
- State contributions will increase to 13.56%, that’s up 2 points
- State conribution to law enforcement pensions will incrase to 16.24%, that’s up 2 points
- Annual increases of 1% from 2018-2023
- State employee contributions increase to 9% from 8.66%
- State law enforcement contributions increase to 9.75% from 9.24%
- Shorter Amoritization. Over next 10 years, 20 year amoritization.
- Lower assumed rate of return. 7.25% from 7.5%
- After 2012, the assumed rate of return will be set every 4 years by the board of the South Carolina Public Employee Benefit Authority
Pensions & Investments | South Carolina Legislature passes pension reform bill
TPPF touting a Pension Poll. The info to know:
Poll conducted by: Texans for Local Control a 501(c)(4)
Who was polled: registered voters in Houston
The result TPPF champions:
- 64% of Houstonians widely support transitioning new employees to a defined contribution plan; 20% oppose
- 70% support a vote on pension obligation bonds
Comptroller: Dark Store Commercial Appraisals = Corporate Welfare= Welfare Zombies!
The Comptroller lists the problems with dark store commercial appraisals in a supporter email as:
- the cost is carried by residential property owners
- homeowners cannot argue to ARBs that their proeprty is “too special” to value
- the appraisal playing field should be level
The cost of dark store appraisals:
- cost our local governments $2.6 billion annually within five years
- cost $1.2 billion in lost school property taxes
- cost of $703 million a year away from the Foundation School Program
Comptroller Glenn Hegar Op-Ed | Sinister-sounding dark store theory is corporate welfare
Texas #21 in Pension Funding
The Tax Foundation ranked states by how well funded each states’ pensions are funded.
What you need to know:
- Texas has the 21st | 79% funding ratio
- South Dakota is #1 | 107% funding ratio
- Oregon is #2 | 104% funding ratio
- California #24 | 76% funding ratio
- Florida #10 | 91% funding ratio
- Ohio #20 | 80% funding ratio
- New York #6 | 98% funding ratio
Tax Foundation | How Well Funded Are Pension Plans in Your State?
TX Editorial Against Fantasy Sports. 3 Points of Opposition.
- It is fantastical to think of fantasy sports as anything other than gambling.
- changing the definition of what is gambling would avail online gambling sites
- Fantasy sports should play by the rules.
Ft. Worth Star Telegram | We bet against fantasy football’s skill defense
Lobster & Fantasy Sports. The Legislation:
Maine is proposing fantasy sports regulation that would:
- require annual registrtation with the Maine Department of Public Safety
- annual fee of up to $5000
the legislators label fantasy sports: gambling
Maine Sun Journal | Maine may tax, regulate fantasy sports leagues
Netflix Tax. Supporters. Opposition. Statewide Preemption legislation.
State: California
The statewide preemption: California AB 252 (2017) creates a 5 year prohibition on cities and counties taxing streaming video services
Supporters of the preemption say: Streaming services provide content & are not table utilities
Which groups are in opposition?
- League of California Cities
- California State Association of Counties
- California Cable & Telecommunications Association
Which groups are in support?
- Internet Association
- AT&T
- Computer Technology Industry Association
The Recorder | ‘Netflix Tax’ Proposals Pit California Cities Against Tech
Kansas has a Budget Crisis. Legislators Fill it By Funding Cuts to State Pensions.How. Why. Impact to Taxes.
Kansas has a revenue shortfall.
To overcome the revenue shortfall, Kansas cuts state contributions to public employee pensions.
Why cut the pension amount? To lower the amount of new revenue Kansas needs from higher taxes.
Empower Texas Makes 2 Points on the Status of Pension Reform.
- Why won’t they listen? “chairman Dan Flynn was not open to receiving suggestions”
- Why aren’t local Republican precinct chair wishes being honored? the bills are ” in direct opposition to the resolution that Harris County Republican Party precinct chairs voted to support”
3 Points. Speaker Straus Statement on House School Finance Bill.
- reduces Robin Hood by almost $400 million
- makes needed structural changes
- puts more resources into the classroom
- reduces the pressure on local property taxes
Speaker Joe Straus | Straus Applauds Committee Vote on School Finance Reform
Online Sales tax. Texas SB 1713. 5 Key Points.
What points does Senator Uresti make about his SB 1713?
- SB 1713 requires ” large out-of-state online retailers to remit the same sales tax as everyone else”
- A 2015 US Supreme Court decision created an opening for state’s to challenge the pre-internet requirement for a physical nexus before a tax could be levied
- Texas needs this to fill budget cuts
- SB 1713 could bring revenue of $247.2 million to $1.8 billion
- SB 1713 is about closing a loophole
Sen. Uresti | Tribtalk | Outdated sales tax system thwarts Texas businesses
Pension Obligation Bond Legislation.Nutmeg State. Statewide or Local POB rules?
State: Connecticut
The pension triggering legislation: Bridgeport, CT wants to restructure its pension liabilities for its police nad fire fighter pension by ossuing pensino obligation bonds to lower its costs by $2.8M per year
The legislative quagmire:
- Connecticut’s Assembly prefers statewide legislation and not local legislation
- Supporters say other municipalities with similar unfunded liabilities might want to take advantage of the bond market and pay off their unfunded debt
- Several members of the substative committee are pushing for a Bridgeport POB specific bill in lieu of statewide legislation
TREND. How the Wolverines are legislating dark store property tax appraisals?
State: Michigan
The dark store property appraisal issue: Some Big Box stores seek to lower their property tax appraisals by having the big box store’s property be appraised as though the property was vacant
How the Michigan Legislature is addressing dark zombie store appraisals?
- limit comparable properties for big box stores
- consider supply, demand, and economic vitality of property
Which groups oppose this legislation in Michigan?
- Michigan Chamber of Commerce
- retailers
- grocers
- manufacturers
Crain’s Detroit Business | Fight over big-box store taxes back in Michigan Legislature
3 Ways Inaction will be costly to Houston Pensions. City Controller.
City Controller Chris B. Brown lays out the following arguments why inaction on the Houston pension crisis will be costly:
- Until a fix passes the legislature, the liability grows at a rate of $1 million per day
- It is not financially viable to move the pensions from defined benefit plans
- For the first time in its history, Houstonended its fiscal year with a negative statement of net position, largely due to the pension liability. This impacts Houston’s credit ratings.
TRIBTALK | For Houston pension crisis, cost of inaction is high
Transparency & Economic Development. Report Highlights Good. Bad. Ugly in Texas.
Good: Austin scores high in economic development transparancy as the country’s most transparent city
Bad:
- fails “to disclose even the names of companies that have received economic development tax breaks ”
- Harris County
- “do notprovide adequate online disclosure of any of their subsidy programs”
- Dallas
- Bexar County
- San Antonio
- Harris County
- Tarrant County
- “Texas’ reporting of local property tax abatements (Chapter 312) does it poorly. ”
- The Annual Comptroller report does not include business names
Governing | Show Us the Local Subsidies
Comptroller: Funding Long Term Obligations with New Fund
Comptroller Glenn Hegar proposes investing to meet Texas long term obligations.
The Comptroller’s proposed idea:
- set aside some state Treasury balances to address long-term obligation by either:
- reserving a portion of the existing Economic Stabilization Fund
- -or-
- capping the ESF and dedicating a portion above the cap to the permanent fund for long term obligations
- 7 states use long term investing on their severence taxes; including:
- Alaska, Montana, New Mexico, North Dakota, Utah, West Virginia and Wyoming
Comptroller Hegar: 4 Long Term Fiscal Obligations
Comptroller highlights 4 long term fiscal obligations facing the state:
- state employee pension funding;
- health care coverage for public school teachers and employees (TRS-Care);
- the Texas Guaranteed Tuition Fund, a state-sponsored tuition savings plan; and
- deferred maintenance for state buildings.
What warning flares has the Comptroller sent?
- In December he mentioned the 4 long term fiscal obligations in a letter to lawmakers
- In March he detailed the long term fiscal obligations in his Fiscal Notes publication
What specific Issues are facing ERS?
- unrealistic assumptions about investment returns
- inadequate contributions
- longer life expectacy
- fewer contributors to the system
- 30% of ERS is law enforcmeent, which tends to retire earlier
Policy options to fix ERS:
- raising member and/or state contributions
- one time lump sum payment to ERS- either GR or Economic Stabilization Fund
- Pension obligation bonds
- Reducing benefits to future or future and current members
- Switching to a Hybrid plan ro Defined Contribution
What issues are facing TRS?
- pharmacy costs
- emergency room costs
- chronic conditions
- Rising TRS Care population
TRS Policy Solutions, Look to the 2015-2016 TRS Joint Committee:
- Health Reimbursement Accounts
- High Deductible (HD) Plan
- Medicare Advantage Plan
Fiscal Notes | Long Term Obligations and Texas State Government
Local Gov Trend: City Squirrels Away Funds to Protect Pension. Credit Ratings Group Likes It.
City: Detroit
Pension Saving Action by Detroit: Established a fund to pay a balloon payment, due in 7 years
How does the pension’s savings fund work?
- funded by surplus tax revenue funds
- the fund is labeled “”retiree protection” trust fund”
Repsonse from Moody’s: “credit positive”
Crain’s Detroit Business | Detroit city pension catch-up plan wins plaudits from rating agency
Lege Trend. Rust Belt Fantasy Sports Bills.
State: Ohio
The bill: House Bill 132 (2017)
The regulatory framework:
- Defines fantasy sports as a game of skill
- Oversight agency: Ohio Casino Control Commission
- Licensing fee: $30,000
- consumer protections such as: age limits, prohibition of daily fantasy sports employees playing, and segregation of player funds
State: Pennsylvania
The bill: House Bill 865 (2017)
The regulatory framework:
- Oversight agency: PA Gaming Control Board
- Defines fantasy sports as a game of skill
- Registration fee is set by the Gaming Control Board with a cieling of 5% of the operators revenue
Legal Sports Report | Two Important States For Daily Fantasy Sports Industry Have New Bills
4 Issues from TPPF. Certificates of Obligation.
What label does TPPF put on certificates of obligation? Certificates of Obligation: Nonvoter Approved Debt
What issues does TPPF raise about certificates of obligation?
- Use of certificates of obligation has risen 63% from 2007 to 2016
- TPPF calls for longer notification periods
- TPPF wants a standard of “5% of the total number of voters that voted in the most recent gubernatorial election can compel a public vote”
- TPPF wants to limit the types of items that can be funded by certificates of obligation
2 Reasons why Dallas Police Fire Pension Stopped DROP Payments
On March 9th, Dallas Police and Fire Pension System stopped paying DROP payments.
Here’s why DROP stopped:
- The Fund was unable to renegotiate a debt agreement that could trigger a call on a $174 million loan
- City Council member trustees had threatened lawsuits if DROP payments were made while a deal was being negotiated
Dallas Morning News | Dallas Police and Fire Pension System won’t pay out DROP withdrawals after all
Lege Trend. Fantasy Sports Legislation in the middle of the bible belt. 3 Pieces of Intel to be Informed
State: Arkansas
How Arkansas seeks to regulate fantasy sports:
- legal recognition as a game of skill
- tax fantasy sports companies at 8% of profits
The author ties fantasy sports to church: “This is a thing that folks do on Sunday afternoon, you know, when they get home from church, and watching a game.”
THV 11 | Proposed bill would legalize fantasy sports betting in Arkansas
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