Doug Kellogg

Massachusetts Sports Betting Proposals Look to Fleece, Not Foster, the Emerging Industry

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Posted by Doug Kellogg on Thursday, July 22nd, 2021, 3:38 PM PERMALINK

Massachusetts going into sports betting with high tax rates is like the Patriots playing without Tom Brady. They’ll be in the game, but performing worse.

High tax rates are a big threat with Senate Bill 269, which includes rates of 20% for in-person bets and 25% for mobile bets. These rates would be among the highest in the nation, behind only Pennsylvania’s absurd 36% effective tax rate. The 25% tax rate on mobile would beat out Tennessee’s 20% rate. These are extremely high tax rates that will make it tough for sports books to succeed, and grow.

Low tax rates are best, they make the legal market more competitive with other states, make it easier for sports books to make ends meet, and help the industry grow and create jobs. Low taxes also make legal betting more attractive to bettors, so they are not betting in the black market.  

For comparison, 6.75% is the lowest rate among U.S. states. While Massachusetts’ neighbors are awful on taxes, Connecticut’s 13.75% rate would be notably lower than the proposed rates.

It is not just taxes that cause concern, both Senate and House have proposed significant recurring licensing costs (on top of the initial, one-time fee), from a $200,000 annualized cost, to $1 million. Pennsylvania hits operators with a whopping $10 million initial licensing fee, but even the Keystone State’s recurring fee amounts to a much lower $50,000 annualized.

Fees are supposed to cover the cost to government to run a program, or service. If they are generating revenue, they amount to taxes. These flat costs also are more burdensome to smaller operators.

The hits don’t stop coming, as the Senate version does not allow for betting on college sports. This kind of blanket restriction would keep all betting on collegiate sports in the black market, or the state’s neighbors.

The House version looks better in comparison on tax rates. Its 12.5% rate on in-person betting revenue, 15% on online, are clearly preferable. Yet, tax rates around 15% and up have been shown to reduce betting activity, keeping bettors in the black market.

Further, the House version allows sports leagues to require betting operators use “official league data.” This is a giveaway to sports leagues that is not necessary for protecting gaming integrity. Nevada has operated for decades, and now New Jersey has operated for years without such mandates.

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 makes sense, the number of touchdowns Tom Brady throws is a fact, it can’t be copyrighted. State lawmakers should not step on this legal precedent, especially when the market is working, and the leagues are cashing in on data agreements without government interference.

There are many companies that collect sports data, and sports betting operators can decide which they would like to use. There is no need for government to force one private company to use another’s services.  

If Massachusetts legislators want to foster a competitive market for sports betting and follow the lead of a northeastern state, they should copy New Jersey. The Garden State’s tax rate on in-person betting is 8.5%, and the state avoiding any significant regulatory pitfalls – like the completely unnecessary data mandate.

The State Senate saw a much better proposal put forward earlier in session.

These current proposals are too focused on maximizing paydays for government, and their pals, rather than doing what is best for consumers and an emerging industry. In the process, they could fail on all counts.  

Photo Credit: Wikimedia

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Ohio Passes Largest Personal Income Tax Cut in State’s History

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Posted by Doug Kellogg on Tuesday, June 29th, 2021, 6:26 PM PERMALINK

The final biennial budget in Ohio includes a $1.6 billion reduction in the state income tax – the biggest income tax cut in a two-year budget in state history.

Ohio Republicans crafted a budget that eliminates two income tax brackets over 4%, and makes the top rate 3.99%. The state has eliminated multiple tax brackets over the past two budget cycles, heading towards a flat tax.

The budget also raises the minimum income that is subject to income tax to $25,000 per year. Moving forward, anyone making less than $25,000 will owe no income taxes in Ohio, and all taxpayers will pay zero tax on their first $24,999 in earnings.

All Ohio taxpayers will benefit from a 3% across-the-board reduction in income taxes.  

“Ohio Republicans have earned thanks from all taxpayers for passing this significant tax relief. Families and businesses will keep more of their hard-earned money, have a simpler tax code, and get needed protections from cities taxing them when they don’t live or work in the city. On top of that, parents will enjoy more school choice," said Americans for Tax Reform President Grover Norquist.

On top of the income tax savings, the Senate “repealed sales taxes on hiring and recruiting companies that work to fill job openings around the state.”

The Senate and House compromised on a 3% income tax cut, the initial Senate proposal was 5%, and House 2%.

These tax reforms are a massive win for Ohio, and will make the state much more competitive in attracting new workers, new investment, and new jobs. In particular, Senate Republicans under Senate President Matt Huffman, and previous Senate President Larry Obhof, have led on tax reforms, and pro-worker occupational licensing reform, and regulatory reforms, that also boost the state’s economy. Representatives Bill Roemer, Derek Merrin, and more have championed tax relief to make the state more competitive and friendly toward job-creation.

Given Ohio’s many local taxing jurisdictions, the state legislature’s strong example is doubly important for driving growth in the Buckeye State.

The budget includes protections for Ohioans who are working from home, so they don’t end up paying taxes to cities where they no longer work. Taxpayers can get a refund, at least on 2021 taxes that have been withheld. Addressing the issue of remote taxation is vital at the state and local level, to keep governments from reaching outside their jurisdictions to tax workers.

The new budget does include changes to the education aid formula which taxpayers will need to watch closely to ensure excessive spending levels do not result.

Back on the positive side, the budget expands school choice options, adding ESAs, and offers a small tax credit for private school tuition, further empowering Ohio families, not teachers’ unions, to guide their child’s education.

A measure to block local governments from running broadband networks was removed, one of the few negatives in this budget. Instead, following Governor DeWine’s push for more spending on broadband expansion, $250 million will be unnecessarily spent by the state on broadband. The reality is, the private sector is spending trillions of dollars to expand broadband access, and government interference is simply not required.

Republican legislators who have championed relief for Ohio taxpayers deserve immense credit for this successful budget. The state continues to advance reforms that make it ready to compete with its neighbors, create jobs, retain talent, a grow.  

“With the Governor’s signature, the Buckeye State will become a better place to raise a family, and a more attractive place for businesses and workers," added Norquist.

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Ohio Budgets Offer Big Wins on Tax Cuts, Work-from-Home Tax, Stopping Wasteful Govt Broadband

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Posted by Doug Kellogg on Thursday, June 24th, 2021, 5:22 PM PERMALINK

Ohio legislators are hard at work combining the House and Senate versions of the biennial state budget. Both include some great provisions, including income tax cuts that should be prioritized.

The Senate budget features a 5% income tax cut, and the House offers a 2% income tax cut. These reductions offer needed relief for Ohio families and businesses – particularly as they recover from the pandemic.

The state legislature’s continued focus on tax relief for Ohioans is extremely important as the state features some of the highest and most numerous local taxes. These local jurisdictions add complexity on top of the cost of the taxes themselves, making it more difficult for businesses to make ends meet.

While commercial lease tax reform remains a white whale in the Buckeye State, further income tax relief would be a big help for taxpayers.

On top of the tax cuts, legislators in both chambers want to address the issue of cities trying to tax people who are working from home outside of the city where their office is based.

During the pandemic, many workers have not set foot in their offices. But the cities that are home these offices, who locked down, still want to collect income tax from these workers. While this issue has resulted in legal challenges, legislators want to allow work-from-home folks to get tax refunds from the city where their office is based.

A Senate proposal would address the wasteful, ineffective practice of local government using taxpayer dollars to try and operate broadband networks. Senators want to bar localities from starting these often ill-fated enterprises.

Legislators also may still vote on sports betting legislation before June 30th. The bill includes very competitive tax (10% tax rate on bets) and regulatory policies that will enable Ohio to compete with their neighbors in Indiana, Pennsylvania, and Kentucky, all of which have legalized sports wagering.

As the House and Senate work out a final budget, they should maximize income tax relief, and protecting Ohio taxpayers from wasteful government broadband.

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Task Force Releases Blueprint to Fix Pennsylvania’s Costly Juvenile Justice Mess

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Posted by Doug Kellogg on Wednesday, June 23rd, 2021, 5:43 PM PERMALINK

Pennsylvania’s Juvenile Justice Task Force just released its report and recommendations after a thorough, pandemic-disrupted process. The proposals promise to address a juvenile justice system that has been plagued by scandal, failure to deliver the public safety results communities deserve, and out-of-control costs.

The state’s $192,000 per year cost to house just one juvenile offender is one of the most outrageous signs of a system that is not working.

The task force offered 35 recommendations for addressing this failing system. Some of the most critical for Pennsylvania taxpayers to ensure due process, give those who have served their time a chance to clear their record, and eliminate excessive fines that put juveniles in debt.

At Tuesday’s press conference covering the report’s release, Rep. Tara Toohill highlighted that a lack of diversion options in some counties causes a minor offense to result in a juvenile going into the system, and being held. This disrupts their family life, and their education.

In Pennsylvania, 60% of the juveniles who are held in state facilities are there for a misdemeanor offense – and just 39% of those are offenses against another person. This means higher costs for taxpayers. Worse, for low-level offenders extended incarceration does not reduce recidivism, and research shows it can increase it.

The Juvenile Justice Task Force recommends expanding alternative options to arresting and detaining youth accused of low-level offenses. For those that pose no risk to the community, supervision and programming options make sense to address what is clearly a problem without creating worse outcomes for everyone.

Recommendations to ensure families and juveniles know their rights and receive appropriate representation in proceedings are commonsense, needed reforms to ensure due process.   

Expungement clears, or seals the records of a conviction from public view. These records can still be seen, and used by the court system for any future criminal proceedings.

Once someone has served their time, there should be some limit to the collateral consequences they face, otherwise they can struggle to work, find housing, and progress in life. For youth, this means they often cannot begin their lives on solid footing. Since having a decent job is a key factor in reducing recidivism, this is a win for public safety.

One of the most important recommendations the task force makes, is to streamline, and make the expungement process standard statewide.

For cases that do not result in a conviction, the task force sensibly recommends immediately beginning the expungement process. After a youth offender that was not incarcerated completes their programming, the expungement process will automatically begin. And for offenders who were held in a juvenile facility or placed on probation, two years after completing their sentence expungement will begin (if they have not committed another offense).

These policies follow the lead of Pennsylvania’s first-in-the-nation Clean Slate law, which automatically seals records of cases that did not result in a conviction and misdemeanors after a period of time.

Fines and fees are another area where government has failed. High fines and fees often follow juvenile offenders long after their sentence, despite the obvious fact many of them are too young to have jobs. In Pennsylvania, some counties have an average fee burden of nearly $700.

The task force suggests focusing on offenders paying restitution and any fee required to administer it. Where there is a victim involved, they are owed recompense. Court system fines and fees would be eliminated.

Another core recommendation is that counties track and report data on their juvenile justice systems. It is incredibly important that officials and the public can see whether changes are working as planned. The public deserves to be confident that anything that goes wrong will be addressed, and that reforms achieve their positive goals.

As recommendations are implemented through legislation, it is important that savings from reforms are reinvested into new programs, and that Pennsylvania taxpayers do not have to take on new, costly burdens. The current system is already too expensive and inefficient.

The above recommendations we’ve highlighted enjoyed consensus or unanimous support among the task force members. Meanwhile, some proposals were less popular. There are points to be made for all recommendations, but many enjoy stronger support, and often these are the most significant measures.

Speaker Brian Cutler said the task force finidings, “present us with the opportunity to ensure our juvenile justice system rehabilitates our youngest offenders to not only create a positive path for them, but also to strengthens families, protect communities and create long-term benefits for all Pennsylvanians.”

The report and recommendations offered by the task force offer a great, needed blueprint to address scandals and high costs while boosting public safety and giving young people an opportunity to earn a second chance. The legislature will now get to work on making the plan a reality.  

Photo Credit: Pennsylvania Senate Republicans

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Arizona Should Pass Crime-Reducing, Cost-Saving Criminal Justice Bill Before Session Ends

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Posted by Doug Kellogg on Wednesday, June 23rd, 2021, 2:07 PM PERMALINK

Arizona legislators and Governor Ducey are working hard to pass the largest tax cut in state history, a massive win for the state’s hardworking families and businesses.

As that legislation is approved, time remains to get a major plank of criminal justice reform passed: Senate Bill 1064, which expands the state's earned release credits program.

Earned release credits allow someone to complete programming that teaches them job skills, treats addiction, or mental health issues, and more. The goal is to address problems that are more likely to prevent someone from working and contributing to society, or even drive them to re-offend. This reduces crime and improves safety, while offering second chances to those who do the work and earn them.

The alternative has been doing next-to-nothing with offenders who are going to get out of prison one day no matter what.

These are commonsense, conservative policies that work to keep people out of trouble. This ultimately improves public safety and reduces costs to taxpayers at the same time. Just look at the results other states have had.

South Carolina expanded their earned release credits, along with other changes, seeing declines in reoffending (-5.6%), and prison population (-14.5%), from 2010-2017.

Kentucky saw its recidivism rate fall (-5.3%), and its prison population fall (-23%) since 2011 reforms.

In 2008 and 2013, Mississippi significantly curtailed truth-in-sentencing requirements that effectively limited the ability of offenders to earn credits off their sentence. The results have been falling rates of violent crime, a decrease in property crime, to go along with a smaller prison population.

In addition to these great examples of successful red state reforms, the federal government is still in the process of implementing the First STEP Act – earned release credit legislation passed under President Trump.  

These reforms are improvements to the criminal justice system that put public safety first. Credits incentivize people, largely non-violent drug offenders, to do the work necessary to get ready for their imminent release from prison so they can contribute to society.

It’s no surprise that this is a drastic improvement over the status quo. Since the vast majority of people in prison are going to get out one day, it is no-brainer level stuff to address the problems that can drive them to re-offend. Mainly these are addiction problems, and not having a decent job.

In the end, this also boosts public safety as millions of taxpayer dollars are saved which can then be reinvested in the system, with a focus on policies and programming that improve public safety. Arizona Senate Bill 1064 could save more than $600 million that would otherwise be spent in ways that do not optimally protect the public.

The bill is a conservative approach to this policy. As ATR President Grover Norquist wrote in the Arizona Capitol Times:

"These are smart on crime policies that will make better use of taxpayer dollars, they also remain tough on crime. Earned release credits will be expanded only for drug offenders, and low-level offenders, not traffickers. Bad behavior will take away any credits an offender has earned. For any crimes with victims, victims’ rights are maintained by the bill. Ultimately, reductions in crime and recidivism will mean there are fewer future victims."

Governor Ducey, and legislators in the House and Senate have already done great work enacting civil asset forfeiture reform, and ending driver’s license suspension for owed court debt. These are key improvements to Arizona’s criminal justice system. SB 1064 remains a major priority that can still get done before the buzzer sounds.

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Dem Supermajority's Attempts to Burn NY to the Ground Could Scorch Rest of the Nation

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Posted by Doug Kellogg on Wednesday, June 9th, 2021, 8:53 PM PERMALINK

Governor Cuomo and state legislators recently approved an expensive, tax-hiking, bloated mess of a state budget. Even after Cuomo begged for a federal bailout of the state to close a budget gap – which President Biden and Congressional Democrats granted – he signed a budget that raises taxes on high earners.

The state was already sending the message that these people and businesses were not welcome, New York lost population and Congressional seat in the Census. The budget just amplified that message.

For most states this would be more than enough damage to cause in one legislative session, but in Albany, New York state legislators continue to dig an even deeper hole.

The Democrat supermajority’s late session priorities include phony antitrust legislation, a government takeover of healthcare, and a second gas tax.

Twenty-First Century Anti-Trust Act (SB 933) pushed by New York City Senators Mike Gianaris, and Democratic-Socialist Julia Salazar, would use a new, European-style “dominance” rule to determine if a company should face jacked up fines and criminal penalties in response.

A company is presumed dominant if they have 40% of the market as a seller, or 30% as a buyer – so their competitors would control most of the market, yet that company would be considered “dominant.” 

In a giveaway to trial lawyers, the bill would make it so any successful business can be sued into oblivion through class action suits.

This disastrous policy would force companies to either stop doing business in New York, or cower in fear of regulators imposing huge fines. The problem for the rest of the country is that any company adapting to these rules in New York would effectively transfer them on other states. New York would get set a de facto standard for the rest of the country.

Gaining market position sounds like the entire point of starting a business. Obviously, New York is not open to business.   

Activists and avowed socialist politicians driving away Amazon’s HQ2 was not a blip, that was the new normal for New York, and now with this absurd anti-trust policy all business sectors would face heavy scrutiny.

For families who want some choice in their healthcare, Albany has the New York Health Act. The bill would have government control healthcare in the state, ending private insurance. This “free” healthcare system would cost $140 billion in new taxes.

If fewer jobs, and losing your healthcare doesn’t sound bad enough, how about paying more to live your everyday life?

The Climate and Community Investment Act would create a second gas tax, at 55 cents-per-gallon, more than doubling the states effective gas tax. This would give New York the highest combined gas tax in the nation.

Not only does this regressive tax hurt people driving to work, or to run daily errands, it will make good shipped into the state more expensive. New York’s completely unaffordable cost-of-living would go even higher with this tax.

This legislation takes aim at businesses, families, workers, and taxpayers, it would make the already-unaffordable state a complete nightmare. With Republicans relegated to watching the Democrat supermajority run the show, Governor Cuomo and legislative leaders will have to allow session to end without passage of these measures for New York to have a future.  

Photo Credit: WikiMedia Commons

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New Jersey Has a Chance to Cut Taxes for Once

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Posted by Doug Kellogg on Thursday, June 3rd, 2021, 6:19 PM PERMALINK

It may be hard to believe after three years of Gov. Murphy hiking taxes, increasing spending and taking on debt like there is no tomorrow, but there is a chance to cut taxes in New Jersey.

As the legislature wrangles with the state budget, there is a proposal to reduce the tax on beverages with less than 9.9% alcohol-by-volume, like seltzers, to match the rate on beer products. Really, this policy just taxes alcohol content the same for products that are very similar.

It likely makes sense to any consumer that these products would be taxed the same, but the current rates are wildly different. Non-beer products are taxed at a rate of $5.50 a gallon, compared to 12-cents a gallon for beer.

That is a more than 450% difference, a significant tax cut. It is necessary given the absurdly high tax burden on seltzers, ciders and similar drinks is making it difficult for producers to make ends meet.  

This is a win for businesses and New Jersey consumers. It’s a rare chance for Jersey residents to pay less for products thanks to the tax rate going down instead of the usual up. Adding to the very welcome surprise is that the bill has bipartisan support, and has been introduced by Senate President Steve Sweeney.

Republican Senator, and Taxpayer Protection Pledge-signer, Anthony Bucco said at a hearing, “It's not often, as a Republican, we see bills coming through to cut taxes… So, I understand your concerns, but whenever we get a chance to cut the taxes here in the state, we like to do that.”

New Jerseyans should spring at this opportunity, and urge their legislators to support cutting the tax on these low alcohol content beverages.

You can find your Senator and Assembly member contact info at the state legislature’s website, let them know you support cutting taxes on canned cocktails.

Photo Credit: wikipedia

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Sports Betting Proposal Back on the Table in Massachusetts

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Posted by Doug Kellogg on Tuesday, May 18th, 2021, 5:33 PM PERMALINK

Legislation to legalize sports betting in Massachusetts looked down for the count this session, but a late amendment to the budget has gotten it back in the game. Senator Tarr has introduced the amendment to the Senate’s state budget legislation, which would allow for in-person and digital sports betting in the commonwealth.

The proposal includes competitive tax rates of 10% of revenue for in-person betting, and 12.5% for online betting (and daily fantasy sports). While lower is always better –Iowa and Nevada have the lowest state tax rates at 6.25% – these rates are comparable to other states that have had success with sports betting, like New Jersey.

The problems with high tax rates are many, including making it more difficult for sports books to make ends meet, which threatens growth, job creation, and competition. A Copenhagen Economics study showed this effect in European countries, as tax rates over 15% reduce legal betting activity.

When betting activity is prevented from moving to the legal market, black market operators win. These activities can threaten integrity in sports, and drive funds toward shady, even criminal enterprises.

The Supreme Court ruling allowing states to legalize sports betting led to a 25% decrease in spending with illegal books in 2019. There is still a long way to go to limit what was estimated to be a $150 billon black market for sports betting.

Senator Tarr’s proposal in Massachusetts would be a win on multiple counts, creating a competitive market for online and in-person sports betting with modest tax rates, creating economic growth in the legal market and reducing illegal betting activity. It certainly seems overdo for a sports-hungry state.

There are still pitfalls that must be avoided by the state’s gaming commission, which will have regulatory authority. Licensing fees, which can amount to just another tax when jacked up to grab revenue, must be kept low into the future. Further, the state should steer clear of regulatory traps, like official league data mandates that require all sports books to use the preferred data of sports leagues (even though sports stats are public information and there are many providers).

These same guidelines should also be followed by Florida, as a new compact with the Seminole tribe moves forward that would allow sports betting in the state.

Photo Credit: wikipedia

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Free Market, Not Mandate, Offers Better Road Forward on EVs for Pennsylvania

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Posted by Doug Kellogg on Monday, May 17th, 2021, 1:23 PM PERMALINK

At the federal level, Joe Biden has proposed a costly $174 billion plan to expand electric vehicle infrastructure, meanwhile a number of states have used taxpayer dollars to subsidize building out electric vehicle stations. 

This top down approach is an expensive one for taxpayers, and unnecessary. In Pennsylvania, some legislators are aiming to have the Public Utilities Commission approve plans from electric utility providers for electric vehicle station expansion, with Senate Bill 435.

The process avoids the major expenses of some other state’s plans, but still takes a top-down approach, mandating a 50% increase in electrification by 2030. It also has just the utilities putting together plans, which the government approves, leaving out other relevant parties. 

Why is the government so involved at all? In Kansas, a major utility company built new electric vehicle stations on their own. The state legislature declined to install a fee or tell them how best to build out stations. The results have been many new charging stations, while taxpayers pay no additional cost. 

With governments at multiple levels already subsidizing EV’s, plenty of demand exists. 

Further, if emissions are the focus, much of the reduction in emissions from vehicles has not occurred because of electric vehicles, but because of improvements in gas-powered vehicles. If Pennsylvania wants lower emissions, mandating electric vehicles isn’t the solution. 

This is reminiscent of Pennsylvania’s leading natural gas industry driving down the state’s emissions as much as other northeastern states who took a top-down, cap-and-trade approach by joining the Regional Greenhouse Gas Initiative (RGGI). The state produces 20 percent of the natural gas in the United States, and Pennsylvania’s carbon emissions have gone down by 30 percent as natural gas use has grown in recent years.

Pennsylvania saw massive economic growth from natural gas by letting the market work, and environmental benefits. 

Instead of following California’s lead with heavy government involvement to expand electric vehicles, Pennsylvania should let the market work, like Kansas did.

Photo Credit: Pixabay

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More Effective Criminal Justice System Coming to Tennessee, As Bills to Focus on Work, Treatment Pass

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Posted by Doug Kellogg on Thursday, April 29th, 2021, 3:17 PM PERMALINK

The Tennessee Senate has approved legislation that will bring significant improvements to Tennessee’s criminal justice system by focusing on treating addiction, and getting people leaving the system back to work, among other provisions.

These conservative reforms are a huge win for public safety, and taxpayers. Addiction and not having a job are two major factors that drive people to reoffend. As long as they remain untreated, addicts are more likely to reoffend. Having a decent job is a key factor in reducing recidivism, and poverty is also a leading recidivism factor.

People who have committed low-level offenses are going to be released from incarceration one day. It only makes sense to address their individual issues and set them on a better path when they return to society.  

A task force assembled at Governor Bill Lee’s request tackled these issues and offered recommendations, leading to the legislation that just passed (HB 784/SB 767, and HB 785/SB 768).

The legislation removes unnecessary government licensing barriers to work for former offenders, updates community supervision practices to concentrate on risk, and offers alternatives to jail where appropriate, like drug treatment. More serious offenders who currently would be released without supervision, will have one year of supervision added, further protecting public safety.

Governor Lee deserves immense credit for leading the charge on these bills, along with legislative leaders, Speaker Sexton, Senate Majority Leader Johnson, and sponsors, including Rep. Curcio, Rep. Lamberth, Sen. Stevens, Sen. Bowling, and Sen. Yager, among many others who helped these needed reforms become reality.

Photo Credit: CSPAN

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