Doug Kellogg

Debt & Taxes Are Certain in New Jersey

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Posted by Doug Kellogg on Friday, July 31st, 2020, 5:25 PM PERMALINK

The Garden State has faced hardship because of coronavirus, that is unfortunate and has caused unexpected strain on the state’s finances, and those of its localities. But that is not an excuse for policies that will dig the state into a worse fiscal situation, which are apparently the only policies the Democrats running the place can come up with.

Let’s start with a tax on health insurance, that is supposed to help more people afford health insurance. You read that right, and no it does not make sense. The 2.5% tax on health insurance has passed both chambers.

Middle class New Jerseyans who were set to enjoy not paying the recently-dropped federal tax on health insurance plans will now get stuck with a state tax. Meanwhile the state still receives federal subsidies to drive down the costs of plans on its exchange.

This blatant tax hike on working people, that penalizes them for having health insurance, is just the latest mistake from Trenton.

New Jersey has also been adding massive new debt at the state and local level.

The state’s debt is $215 billion, “5 times the state’s total budget.”

Among U.S. states, New Jersey’s net tax-supported per-capita debt ranks fourth-highest, according to the latest assessments from Moody’s Investors Service, the credit rating agency.

Those numbers are about to get worse, as Governor Murphy’s $9.9 billion bonding scheme starts to go into effect. The bonds are supposed to be issued to counter coronavirus-related revenue loss.

The bonds do not require voter approval, but they will be backstopped by a statewide property tax surcharge if necessary. New Jerseyans already pay some of the highest property taxes in the nation. The state’s already overused credit card and the restraint of Democrat leaders are all that stands between them and even higher taxes.

That is, unless a lawsuit filed by Republican Gubernatorial candidate Jack Ciatarelli succeeds. The New Jersey Supreme Court has held previously that long-term debt can’t be used to balance the budget.

That’s not the end of the debt Murphy is working to add, and the state legislature has also moved legislation to allow localities to take on new debt, up to 30% of their budgets.

A lack of oversight is among the concerns with the local government debt plan:

“Sen. Declan O’Scanlon (R-Monmouth) said the bill allows local governments to borrow too much without direct state oversight, and doesn’t require local officials to exhaust all other options before turning to the bond market.

“A former sponsor of the bill, O’Scanlon said he dropped off after “the Assembly screwed it up.””

New Jersey is playing a dangerous game for its future. The state has already lost taxpayers who have fled to other states in recent years, and now it is putting both state and local budgets into greater debt. Meanwhile, absurd tax hikes like the new tax on health insurance continue to be piled on.

What taxpayer is going to stick around to pay off all this debt for New Jersey, just so families and businesses pay all the costs for coronavirus and government sacrifices little to nothing?

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New York, New Jersey Plans to Tax Wall St. Would Hurt Every Investor

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Posted by Doug Kellogg on Monday, July 27th, 2020, 5:46 PM PERMALINK

“If you can make it here, you can make it anywhere,” goes the line from Frank Sinatra’s famous song “New York, New York.”

For folks in New York and New Jersey, “anywhere” is starting to look pretty good as legislators push for misguided tax hikes, bonding schemes, and more, to keep big-spending budgets afloat.

One might recall that New York passed a budget back in early April, one that avoided the variety of significant tax increase proposals that were floating around Albany. Yet, after departing the capitol for a while, legislators returned for an emergency session focused on police reform. Much to the chagrin of beleaguered New York taxpayers, legislators have stuck around.

New York, with a currently projected $13 billion hole, is seeing left-wing interests push hard for “billionaire taxes” – to the point of having gangs of people with dummy pitchforks roam around nice Long Island neighborhoods demanding people pay their “fair share.”

The $5.5 billion tax proposed is an entirely new tax on New Yorkers and companies with $1 billion or more in assets. It’s a capital gains tax, but on unrealized gains. The state’s 8.8% tax rate on capital gains would be applied to any growth in value.

It is potentially also unconstitutional, as New York's Empire Center explains.

For some reason, Alexandria Ocasio-Cortez has become one of the faces of this effort, probably a bad sign that this is coming to Congress if Joe Biden is elected president.

CNBC explains: “If Bloomberg LP,  the financial-information giant owned by Mike Bloomberg, gained $5 billion in value in 2020, he would pay about $440 million in taxes. If assets lose value, the billionaires can use the loss — or “carry it forward” — indefinitely to reduce taxes in future years.”

One of the groups peddling this tax, Americans for Tax Fairness, is behind the viral social media claim that ‘America’s billionaires got $434 billion richer during the pandemic’.

This happens to be completely false. A MarketWatch examination found, “Cumulatively, the top 50 billionaires lost $232 billion between the market’s peak and this Tuesday. If the remaining billionaires on the Forbes list lost wealth at the same roughly 12.5% rate that the top 50 experienced, that’s another $200 billion–plus wiped out.”

But why let facts get in the way of fantasy?

Assemblyman Phil Steck certainly isn’t. He’s sponsoring another tax hike, proposing to restore and expand the stock transfer tax at an estimated cost of $13 billion annually to taxpayers. The tax will work against this aim of course, as higher costs will disincentivize trading, reducing revenue.

The fake out here is a pretense this is also about hunting fat cats. When the reality is this would hit every individual investor, anyone with a 401(k), day traders, and on. The value of everyone’s portfolio would go down.

Steck’s bill calls for a tax of 1.25 cents on a sale of stock worth $5 or less a share to as much as 5 cents for stocks worth more than $20 per share.” (Incredibly, some of this money would eventually go to the Metropolitan Transit Authority, essentially throwing the money into an endless pit never to be seen again.)

With the tax being based on the per-share value of the stock, it is quite regressive. Any working stiff who has some shares of Apple or Microsoft who trades them will pay a high transfer tax for that sale.

This doesn’t concern Steck, who seems to not realize many investors do not pay fees on trades anymore, and the growth of passive investing means many do not pay high management fees that would dwarf any transfer tax concern.

Further, Steck wants his tax to hit new transactions that the old model would not have included. Finally, he eerily cites the Wayfair internet sales tax decision as allowing this tax to apply even though New Jersey hosts the computers that process trades.

The danger of course is that the exchanges will leave. The original stock transfer tax was neutralized in the 1980s because the exchanges threatened to leave, and now it would be easier than ever to do so.

Back to New Jersey, they are also doing their level best to drive out any remaining wealthy individuals, families, and businesses - including proposing a financial transactions tax like New York's. New Jersey's bill (A4402), sponsored by Assemblyman McKeon, would institute a 0.25 cent per transaction tax.

If both of these states added similar taxes on financial transactions, one based on hosting the exchanges, the other, infrastructure to process trades, what then? We’d see the downsides steepen. For New York, where the state comptroller reports 17% of state revenues come from Wall Street, the downside risk is huge.

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Georgia Sports Betting Proposal Tilts Field Against Taxpayers, Caps State’s Competitiveness

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Posted by Doug Kellogg on Thursday, June 25th, 2020, 11:07 AM PERMALINK

A proposal, attached to House Bill 903, to legalize sports betting in Georgia came alive late last week. With baseball, basketball, and hockey slowly moving towards playing again, the timing seems great.

Unfortunately, the current language would blindside taxpayers with one of the highest tax rates in the nation, at 20% of adjusted gross income. Not only that, it would give sports leagues power over what data sports books could use.

If they remain, these provisions promise to handicap Georgia sports betting business. Tax rates on bets approaching 20% and up are so high that they drive down betting activity, and actually reduce tax revenue.

They defeat the entire goal of the politicians seeking the high rates. And that analysis focuses on European countries. With sports betting in the U.S., many states have yet to legalize, and others have come in with very low tax rates, like Iowa’s 6.75% rate. The competitive situation could turn out even worse for states like Illinois and Tennessee, who have adopted high rates (and Georgia if the state follows their misguided lead).

In fact, Illinois has been getting crushed by neighboring Indiana. The Hoosier State has a 9.5% tax rate, and digital sports betting. Illinois’ own governor seems to not realize his state does not have live digital betting yet.

High tax rates also keep people betting with illegal offshore sports books. This is bad for consumer protection, and general security, as we don't know where all that money goes. There is an estimated $150 billion sports betting black market.

Georgia’s legislation includes language on data that would allow sports leagues to determine at a whim that independent sports book operators would have to use their “official” stream.

This is damaging because the government is giving away regulatory power to private, protected sports leagues. Then the leagues get to use that power to tell people who they can do business with. It’s bizarre some state legislators think this is a good idea.

There is some recourse, as operators can argue terms for league data use are not "commercially reasonable." That may be better than government stating what is "commercially reasonable", but risks creating endless legal disputes that cost money, which only makes it more difficult to run a sports betting business in the state.

Meanwhile, there is a functioning competitive market for sports statistics data that would determine what is "commercially reasonable" for free.

It has been well established that sports statistical information is public. In National Basketball Ass’n v. Motorola,Inc. a court of appeals held that sports statistics are not copyrightable, and that compiling and distributing statistics was legal.

It is also completely unnecessary for the leagues’ success, as they have been signing agreements for using their official data all over the place. The major sports leagues have deals with Genius Sports or Sportradar – companies that compile and distribute statistical data, for example, the NBA’s deal for overseas statistics distribution is worth $250 million.

Hopefully Georgia lawmakers take steps to address these issues, and better prepare their state to compete in the growing sports betting marketplace. Otherwise, when Alabama and Florida join the fray, Georgia could blow whatever lead they gain by acting first.

Photo Credit: Wikimedia Commons

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You Better (Universally) Recognize

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Posted by Doug Kellogg on Thursday, May 28th, 2020, 6:09 PM PERMALINK

The coronavirus crisis has led to a lot of changes for occupational licensing.

Suddenly, states have recognized out-of-state licenses for health care workers like nurses and doctors, in order to bring in needed help for the frontlines. For similar reasons, a number of states have relaxed requirements for people trained in health care fields to get their initial license.

The pandemic shined a spotlight on licensing hurdles that were getting in the way of workers fighting coronavirus.

Of course, in normal times, that is the point of occupational licensing. Often driven by political favoritism, these rules restrict work by placing barriers between people and jobs. Barriers that can be very arbitrary, and costly – which has a pernicious effect on low-income workers and people starting off a career.  

Now that it has been made clear how damaging licensing rules are for workers and movement between states, it is the perfect time for lawmakers to remove these burdens.

One great way to do that is universal recognition, meaning if someone has earned and maintained license in good standing in “state A”, that license is recognized in “state B”, and they can work in their new state without starting from scratch to earn a new license for the same profession.

If doctors and nurses who require extensive training can go from one state to another, cosmetologists, barbers, landscapers, and alike surely can as well.

Arizona and Missouri have passed universal recognition already, and North Carolina and Ohio currently have similar bills pending.

These states are great examples of the negative impact of licensing, and how to act to address that problem.

According to an Institute for Justice study, the cost of licensing to Ohio amounts to 67,000 jobs and over $209 million lost. Meanwhile over $6 billion in resources have been misallocated.

On North Carolina, IJ reports, “It takes just 39 days of training to earn a license as an emergency medical technician in North Carolina, but substantially more to become a licensed manicurist (70 days), massage therapist (117), skin care specialist (140), cosmetologist (350) or barber (722). Occupations like these, where training required does not line up with public safety concerns, make possible targets for reform.”

Ohio embarked on a path of reform in 2018, passing a landmark sunset review process for licenses that requires licensing boards to recommend which licenses should be eliminated, and which should be retained. The burden of proof is on the boards, as they must prove a license is critical to public safety to keep it. Licenses that the legislature does not vote to keep eventually sunset.

The Buckeye State also passed licensing reciprocity for military spouses, Senate Bill 7, signed into law by Gov. DeWine this year.

Now, House Bill 432 sponsored by Rep. Jena Powell, and its Senate companion sponsored by Sen. Kristina Roegner and Sen. Rob McColley, offer the chance for full universal recognition.

North Carolina’s universal recognition legislation is Senate Bill 773, sponsored by Sen. Chuck Edwards, Sen. Andy Wells, and Sen. Norman Sanderson.

The state’s think tank, the John Locke Foundation, writes, “Let’s not forget that occupational licensing reform has long been a bipartisan issue. In recent years “red” and “blue” states alike have made significant licensing reforms. In fact, one of the strongest cases for reforming occupational licensing was made in a 2016 white paper by the Obama/Biden administration.”

Both the Trump and Obama administration have recommended licensing reform to the states.

North Carolina is not stopping there, more licensing reform proposals are also on the table, including a sunset review process similar to Ohio’s.

This is the kind of comprehensive approach that will make Ohio and North Carolina more friendly to workers, especially people starting out new careers, and moving in from other states.

It shouldn’t take a pandemic to show how restrictive occupational licensing is, but since it has, taxpayers should urgently support reform that gets these arbitrary government barriers to work out of the way.

Photo Credit: Flickr - Joshua Rothaas

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Oklahoma Gets it Right On Citizen Privacy Protections

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Posted by Doug Kellogg on Monday, May 18th, 2020, 6:25 PM PERMALINK

Last week, the Oklahoma legislature overwhelmingly passed protections for free speech and citizen privacy, as the Personal Privacy Protection Act sailed through the Senate, having passed the House earlier in the year. UPDATE: Governor Stitt signed the bill this week.

This is a critical step to protect Oklahomans who contribute to causes they believe in. We continue to see efforts to undermine the right to free speech with aggressive state laws that expose private citizens’ personal information, with the effect of chilling speech.

These aggressive laws go far beyond the usual political campaign regulation, undermining the ability of citizens to effectively engage with their legislators and even give to educational groups.

Whether it is the rise of Antifa, Democrat Presidential candidate Joaquin Castro publishing the personal and business information of contributors to the Trump campaign, or story after story of union intimidation, it is clear that if people’s personal information is revealed, hyper-political interests will abuse that information.

Oklahomans who contribute to non-profit educational groups, advocacy organizations, and alike, should have their privacy protected. They should applaud their legislators for getting protections over the finish line during a difficult time, especially the bill's sponsors, Rep. Terry O'Donnell, Sen. Kim David, Rep. Lewis Moore, Rep. Mark Lepak, Rep. Jay Steagall, Sen. Micheal Bergstrom.

Oklahoma joins West Virginia, Mississippi, Arizona, and most recently Utah, as states who have enacted these vital measures. Tennessee has a chance to join Oklahoma by passing HB 2665/SB 2886 if and when they return to session, as does Louisiana with HB 303.

Photo Credit: Flickr - jim hutchison

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NY Budget Must Avoid Tax Hikes, Attacks on Jobs, as State Fights Off Coronavirus

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Posted by Doug Kellogg on Tuesday, March 31st, 2020, 4:33 PM PERMALINK

New York State is in the middle of an unprecedented crisis – the coronavirus pandemic. New York City is one of the epicenters of the outbreak in the U.S.

Government is not immune, as multiple state legislators have tested positive for COVID-19, adding Senator James Seward to the list on Monday. Despite all this, state lawmakers still have a budget deadline of April 1 (though rules to allow remote voting could add flexibility to that).

New York’s standard budget process is not exactly transparent, with closed-door negotiations and dysfunctional committees. This year, it has become more mysterious as the capitol building has been cleared out to stop the spread of coronavirus.

On top of that, what was already a massive $6 billion budget gap, is now estimated to be $15 billion due to coronavirus’ impact on the state economy.

Major threats at the start of session included an “ultra” millionaire’s tax, destruction of the independent contractor system (following the lead of California’s AB 5), and a digital services tax (similar to Maryland’s ill-advised policy).

While the last thing government should be doing is taking more of people’s hard-earned money when they need it in a crisis, that does not mean the temptation is not there. Many legislators remain interested in adding new tiers to the millionaire’s tax.

Left-leaning groups like Vocal-NY, the Working Families Party, Indivisible, and Citizen Action, are pushing for any millionaire’s tax hike proposal to pass. A long list of these organizations and others just sent a letter to Gov. Cuomo and leadership urging adoption of two bills from Sen. Robert Jackson which would enact ultra-millionaire’s taxes. One of which is a $4.5 billion tax hike that creates new high-tax rate brackets for people earning over $1 million, $5 million, $10 million, and $100 million annually.

Even this massive tax hike does not come close to closing a $15 billion gap, or even close the initial $6 billion gap – and that’s assuming everyone it targets would stay put and pay, an unlikely scenario.

A proposal to create a digital services tax (S6102/A9112) has not gained momentum. This awful concept would impose extra costs on businesses that would hammer consumers too, while triggering legal challenges as it violates the Internet Tax Freedom Act.

As Empire Center’s E.J. McMahon outlines, New York’s heavy reliance on capital gains taxes leaves the state vulnerable to significant revenue loss. Post-coronavirus, “the decrease in capital gains income is likely to be more on the order of 40 to 50 percent”, McMahon writes.

New York cannot make the tax environment worse. It is already too burdensome, ranking first for state and local tax burden and collections, according to the Tax Foundation. The state’s affordability crisis has driven a massive exodus, and population loss in recent years.

Gov. Cuomo has not expressed interest in increasing taxes, and his budget proposal maintains middle class income tax cuts that passed a few years ago with a multi-year phase-in plan.

Legislators must hold the line on tax increases to avoid driving more people to leave the state. The federal emergency coronavirus bill will send around $40 billion to New York State. U.S. taxpayers are already sacrificing. Though this money is aimed at coronavirus related costs, it does also include $1 billion for education.

Coronavirus has also highlighted how often government gets in the way of jobs and innovation. Americans for Tax Reform continues to track rules and regulations that have been relaxed to make it easier for services to reach people.

Unfortunately, one set of regulations that has not been relaxed is California’s misguided attack on independent contractors, AB5, a model that Governor Cuomo sought to emulate in New York.

There is no excuse to pursue this policy after its disastrous consequences have been made clear by California Untold numbers of jobs have been lost, some through layoffs at outlets like Vox and SB Nation, others as California freelancers lose work and clients, potentially forcing them to leave the state. California has also been sued over AB5 by the American Society for Journalists and Authors (ASJA).

With many industries having exemptions to the law, trucking companies getting a restraining order on complying, and now a successful effort to place an initiative on the ballot that would reform the law, it is clearly a failure.

Legislation to recreate this disaster in New York, S6699A, has not moved, and legislators should keep this job-killing proposal stalled.

Also on the labor front, Gov. Cuomo proposed a reckless expansion of the state’s prevailing wage law into private construction. This is a direct attack on non-union options that will cut them out of projects, and drive up costs for taxpayers in the process. Firms will be driven out of business, and jobs will be lost at a time when New York desperately needs more of both.

This would be triggered if only 30% of funding comes from government incentives – not even direct spending. Worse, a board appointed by the Governor could change the rules.

Unshackle Upstate is leading opposition efforts, and highlighted a Weitzman Group analysis that found “an expanded prevailing wage mandate will increase private construction costs by an average of 30%.”

Medicaid was a major factor driving the $6 billion gap, and remains in need of reform. The Governor charged a task force with finding savings in Medicaid, their sensible recommendations still only amount to a $1.9 billion reduction in spending growth, Bill Hammond with Empire Center explains.

To deal with the gap, Medicaid will have to be cut further, as will education spending.

New York consistently increases education aid in its annual budget, and despite spending among the most per-pupil gets middling outcomes. The education establishment demanded billions of dollars in aid increases this year, while Governor Cuomo proposed spending over $800 million.

Some trimming will be needed, but again, the federal response allots over $1 billion for education.

Also keep an eye out for Governor Cuomo’s effort to use a “climate emergency” to take away localities’ ability to determine taxes and approvals for wind and solar projects.

The deck is already stacked in favor of these projects being imposed on localities in New York. But under the changes highlighted in a recent New York Post op-ed by Jonathan Lesser with the Manhattan Institute, taxes would be determined by the state and local government could impose no rules or restrictions on where wind turbines or solar facilities could be built.

There is much at stake as New York’s final budget comes together in the most difficult of circumstances. Protecting taxpayers will best prepare the state to recover economically as coronavirus subsides.

Photo Credit: Albany.org

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Kentucky Sports Betting Could Be Great, But Faces Threat of High Taxes, Bad Regs

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Posted by Doug Kellogg on Friday, February 28th, 2020, 11:01 AM PERMALINK

The Kentucky legislature is taking its second swing at legalizing sports betting after striking out last session.  

Last year’s bill was perfectly good, with very competitive tax rates. That carries over to this year’s effort. The current bill, House Bill 137, would legalize sports wagering with a tax rate on in-person bets of 10.25%, and 14.25% for online.

These rates could certainly be lower, Nevada and Iowa have tax rates of just 6.25%. Still, they are solid, as tax rates on bets over 15% start to reduce betting activity. For legislators interested in using revenues to cover pension fund shortfalls, this should be of particular concern.

Kentucky should be looking to be as competitive as possible on taxes and regulation now. Sure, some of their neighbors might be pushovers. Tennessee passed one of the least competitive sports betting bills in the nation – with high tax rates, and unnecessary, costly giveaways to leagues. And Illinois’ 15% tax rate on bets remains one of the highest in the country (still behind Tennessee’s 20% though).

Yet, Indiana has very consumer and market-friendly sports betting laws, with a 9.5% tax rate on gross gaming revenues. It’s why they’ve been trouncing another neighbor, Illinois, on sports betting numbers. West Virginia also maintains a competitive 10% tax rate on revenues.  Also, Ohio continues to inch toward action on sports betting, which would bring more competition to the table.

As is, Kentucky’s legislation can compete on taxes, but amendments proposed by Representative Petrie would drive those rates to a sky-high 29.25% for in-person bets, and 42.25% for digital. Petrie also proposed an amendment allowing local governments to bar sports betting and fantasy sports.

Needless to say, these proposals would kill sports betting if they somehow were attached to the bill.

While legislators fight off bad policy on taxes, there is language already in HB 137 that deserves a look.

The bill includes a provision that would allow sports leagues to approve or disapprove in-game betting. Even if you think in-game betting deserve extra scrutiny, there is no reason to think sports leagues alone can or should provide it.

Another provision would force sports betting operators to share data and information on betting activity with sports leagues. There is already information sharing with government regulators, and the operators themselves have the most incentive to maintain betting integrity and root out bad actors. Adding the burden of sharing this information with leagues only drives up costs for businesses, and does not improve integrity.

While less ridiculous than some policies discussed in other states – like direct payments to leagues (a.k.a. “integrity fees”), or mandates that betting operators must use official league data – these policies seem designed to give sports leagues power over other businesses for no reason.

Like the Astros, some sports leagues seem very interested in rigging the game to benefit themselves. Legislators should not give in and make government a willing accomplice.

Kentucky has a solid starting point on sports betting taxes, legislators should reject the bad ideas still on the table, and craft a final product that will help Bluegrass State sports betting industry compete and win.

Photo Credit: Wikimedia Commons

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DeSantis-Led Occupational Licensing Reform Push Would Make Florida an Even Better Place to Work

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Posted by Doug Kellogg on Wednesday, February 26th, 2020, 11:27 AM PERMALINK

Despite its welcoming tax environment, and the “Florida Man” jokes that make it seem like anything goes in the Sunshine State, Florida is a bureaucratic nightmare when it comes to occupational licensing.

The state currently has the fifth most burdensome licensing laws in the U.S., according to the Institute for Justice.

Government should not place unnecessary barriers between people and jobs. It’s commonsense. Licenses, where they exist at all, should clearly be necessary to protect public safety – and the burden to prove this should be on licensing boards.

The reforms Governor DeSantis has proposed are likely the most sweeping set of reforms pitched in a state at one time. They would address the state’s licensing problem, and make it easier for Floridians, especially people just starting careers, to find work.

Governor DeSantis has said in discussing his reform package, “If you did nothing, it seemed like government would always get bigger. And that was the default. I think the default should be that if you do nothing, then government actually gets smaller because that means that we have more freedom and opportunity.”

The biggest proposed reform addresses this point. It is a sunset review process that would require the legislature to review the state’s occupational licenses (with some exceptions), and licensing boards would have to make the case as to why any licenses they wish to keep are required to protect to public safety.

Licenses that are not affirmatively approved during the process would automatically end, or “sunset.” Meaning anyone could then engage in that profession or trade without having to go through onerous testing and pay fees. Ohio was the first state to pass a version of this reform in late 2018, setting a great example for other states to follow.

The Governor’s reforms include immediately exempting some professions from existing licensing requirements, and changing interior design from a profession that requires a license to a voluntary certification.

Voluntary certifications make far more sense for professions where someone may want to demonstrate their ability to meet a set of standards, but where there is no need to outright bar people from practicing if they don't jump through hoops.

The Governor’s proposals also seek to allow Floridians licensed in one county to have that license recognized in another county. Yes, Florida licensing is currently so absurd that even counties within the state do not universally recognize other county licenses. Fixing this is a great step, which hopefully can soon be followed by interstate reciprocity, as we’ve seen in Arizona.

Another key change would be preventing the state licensing authority from barring people with student debt problems from getting a license. It’s counterproductive to punish someone with student loan debt by preventing them from earning money to pay back that debt. Even after covering all of these cutting edge reforms, there is more to the Governor’s proposal.

Governor DeSantis and Florida legislators deserve a lot of credit for leading on this issue, and getting government out of the way of Floridians who are looking for work, and starting businesses.

This approach is how you take a state that is already great on taxes, and make it even more friendly for workers and employers.  

Photo Credit: Flickr - Gage Skidmore


T-C-I is a Massive T-A-X that Would Crush Pennsylvania Families

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Posted by Doug Kellogg on Tuesday, January 28th, 2020, 1:28 PM PERMALINK

Until recently, few people had heard of the Transportation Climate Initiative (TCI), the compact of 12 states agreeing impose a cap and trade program on transportation fuels. Now, after the program released the first details on what it would do to accomplish its goals, the uber-expensive gas tax scheme is becoming controversial.

States are getting a good look at the high costs TCI promises to impose on residents, for little environmental benefit. Here are some of the big reasons why TCI is expensive, ineffective, and unpopular…

It is a costly new gas tax:

  • TCI could impose a $56 billion annual gas tax on participating states. According to TCI’s own numbers, the impact on gas prices could be as much as a 17-cents-per-gallon.
  • The hefty cost won’t come close to keeping enough cars off the road to reach its goals. Research shows it takes more extreme increases in gas prices to reduce demand for driving. That means the actual added costs on gas could be four times higher than the initial TCI estimates.  
  • The cost of carbon implied by TCI is $2,700 per ton, but the existing Regional Greenhouse Gas Initiative (RGGI) price is $6 per ton. Based on the program’s proposed $45 billion cost to cut 16.5 million tons of CO2 emissions, the TCI cost of carbon is $2,700 per metric ton – compare that to the Regional Greenhouse Gas Initiative’s $6 per ton cost for an emissions allowance.
  • Pennsylvania’s gas tax is already the 2nd-highest in the nation. Already-overburdened families would get hit with an additional yearly cost of $210 per household under TCI.
  • Everyone will pay more for goods. Every Pennsylvanian, even the few non-drivers, would get hit with higher costs as goods shipped to the state by truck, will cost more to absorb the artificially inflated gas price.

It won’t do much for the environment:

  • TCI will have a minimal impact on emissions, as low as a 1% reduction. TCI documents claim a small 1-6% reduction in emissions from the program, meanwhile emissions will already be reduced by 19% due to existing policy.
  • TCI’s impact on temperatures would be too small to measure. Using the same modeling system as the U.N., Dr. Brent Bennett with Life:Powered found TCI’s impact on temperatures would be less than one thousandth of a degree.
  • TCI overstates health benefits. Even the EPA’s most rosy scenario for its similar “Affordable Clean Energy Rule” is only one fifth the value claimed by TCI.
  • Helps rich electric vehicle drivers. TCI might do more for well-off electric vehicle drivers than it does for the environment. They would pay lower fuel costs, and get to drive in HOV lanes in even more heavily-subsidized EVs. Meanwhile those who can least afford to pay more for a necessity, get hit with more expensive gas.
  • Pennsylvania is already slashing CO2 emissions. The state’s emissions fell by 23 percent between 2005 and 2017.

It’s unpopular:

  • Only 34% of respondents favor TCI when they know the cost. A poll conducted in Virginia found few residents favored TCI when they knew what it was and what it would cost.
  • Governor Sununu of New Hampshire announced the state would withdraw from TCI. He said, “This program is a financial boondoggle and the people of New Hampshire will never support it."
  • VT Governor Scott, and ME Governor Mills, have both voiced opposition to increasing gas prices.
  • The AFL-CIO President for Vermont slammed TCI, saying it would “do nothing more than take dollars out of the pockets of working people…”

 

Photo Credit: Flickr - Benson Kua

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Michigan Task Force Recommendations Offer Promise for Overcrowded, Costly Jails

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Posted by Doug Kellogg on Monday, January 20th, 2020, 3:44 PM PERMALINK

The Michigan Joint Task Force on Jail and Pretrial Incarceration released long-awaited recommendations last week to reform the state’s overcrowded jails. Michigan’s jail populations have rapidly gone up, a sign of a system that is not delivering the public safety, justice, and efficiency that people deserve.

In 2017, taxpayers spent an estimated $478 million on county jails. It’s not just that high costs are unaffordable for taxpayers, but they are a warning sign that too many people are being jailed, often for bad reasons, and reform is needed.

The data-driven recommendations from the Joint Task Force on Jail and Pretrial Incarceration offer an extensive set of reforms needed to create the more efficient, effective, and affordable jails that Michigan communities deserve.

The reforms include:

Ending the practice of suspending driver’s licenses for offenses that aren’t related to safe driving, like owed court debt. Driving without a valid license was the third most common reason for admissions to a correctional facility. Reform in this area would mean people can get to work to pay their fines, and don’t rack up criminal charges and lose the ability to hold a job because of a lack of means.

Decriminalizing low-level traffic misdemeanors. Low level offenses that currently entangle people in the criminal system that pose no risk to the community can be better handled by traffic courts.  

Taking into account one’s ability to pay when imposing fines. Fines are meant to be a punishment first, not a revenue raising tool. It makes sense to limit the amount of fines to something an offender can reasonably be expected to pay. Imposing an exorbitant fine that an offender can never reasonably pay ties them to the criminal justice system in perpetuity.

Diversion for behavioral, mental health issues. With addiction driving so many people into jails, diversion that gets people with mental health and addiction issues into programs that can help is a needed reform.

More alternatives to arrest for police officers. Allowing officers to use appearance tickets when arrest and jail are not warranted for the suspected crime is a smart step that empowers police, and avoids pulling people into the jail system unnecessarily.  

Caps on jail time for technical parole violations. The possibility of being jailed is important to incentivize people who are on parole to keep up with their obligations. However, that should be weighed against the unintended consequences (losing a job for instance) for otherwise well-behaved parolees.

Defendants must be tried within 18 months of arrest. Ensuring the justice system delivers speedy trials and people are not left in jail for extended periods of time is a win for liberty and safety. Extended jail time can make people more likely to commit future crimes.

Improved data collection. It is vital taxpayers know what is happening in the criminal justice system. Better data collection accomplishes this, and it is also critical to tracking the impact of reforms. If something is not working as anticipated, citizens and legislators should know quickly, and be able to act with confidence.

There are a couple areas that are left to counties that will be important for the counties to implement in the right way. The task force recommends bail reform, with release unless the court determines that a defendant poses a risk to the community, themselves, a flight risk, or has committed certain crimes (violent or against children). Counties will have to ensure effective risk assessment fills in where reliance on cash bail is reduced to ensure public safety is not put at risk.

Michigan residents have every reason to be excited about the task force recommendations. Now, the road to reform turns toward hammering out legislation. ATR looks forward to working with the legislature to ensure the best version of these proposals becomes law.

Photo Credit: Livingston County, MI

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