Doug Kellogg

Everything CT Governor Ned Lamont Wants to Increase Taxes On in Budget

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Posted by Doug Kellogg, Griffin Namin on Thursday, February 28th, 2019, 1:18 PM PERMALINK

New Connecticut Governor Ned Lamont has floated various tax hikes leading up to his formal biennial budget proposal, but now we have the full plan, and it’s not a cheap one for the state’s already-overburdened taxpayers.

His “A Path Forward” plan is filled with tax increases, broken promises, and high fees. The unambitious name is fitting, it’s a path alright, one terrible path to choose among other options – like finally containing Connecticut’s rising spending, and pension liabilities.

The total bill for Lamont’s revenue proposals exceeds $1.06 billion in 2020 and $1.486 billion in 2021.

The massive amount of tax hikes the Governor has proposed is led by sweeping new applications of the state’s 6.35 percent sales tax, and taking away sales tax exemptions that sensibly have been used to ease costs on necessities, like doing your taxes, or buying textbooks. The Governor’s assault on exemptions will also hurt Connecticut residents who belong to non-profit credit unions. Credit unions by their nature return benefits to members who live in the community, and often offer free educational services. And interestingly newspapers will be hit as well, maybe Lamont isn't happy with his media coverage. 

It is incredible how damaging and tone deaf these new sales tax are… Need to take your dog to the vet? That will cost more. Does your child need a bike helmet? That will cost more. Ready to drive your new baby to Mom and Dad’s house? Safety seats will cost more.

If Lamont wants more uniformity in the state sales tax, he should lower the rates for everyone, not discourage people from purchasing necessary products and services, and make it even more unaffordable to live in Connecticut.

Here’s the rundown of notable Lamont’s tax hikes (full list here):

  • 10-cent plastic shopping bag fee
  • Soda tax
  • Text book tax
  • Newspaper & magazine tax
  • Renew corporate tax surcharge
  • Boat sales tax hike
  • Bike helmet tax
  • Child car seat tax
  • Veterinary services tax
  • Credit union tax
  • Hair cut tax
  • Parking tax
  • Garbage tax
  • Camping tax
  • Nonprescription medicine tax
  • Vaping wholesale tax
  • Movie tax

This could get worse if the Democrats’ Senate Bill 475, which would increase the statewide sales tax to 6.85 percent also gains traction.

Senate Republican leaders have put forward a plan that offers no tax increases, no tolls, and lowers costs statewide.

Photo Credit: Flickr

Kentucky Sports Betting Bill with No “Integrity” Fees, Moderate Tax Rates, Heads to House

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Posted by Doug Kellogg on Monday, February 25th, 2019, 12:40 PM PERMALINK

Late last week a House bill to legalize sports betting in Kentucky was voted out of committee unanimously.

The legislation is already the center of attention, and will certainly earn more as debate heats up. It is estimated to bring in $48 million in revenue if Kentucky can beat out neighboring states in legalizing sports wagering - promising to devote that money to the state's struggling pension fund (though the only real fix for the pension fund is significant reform).

How will it get that money? That is the big question for taxpayers and consumers.

Kentucky’s legislation includes a tax rate on in-person bets of 9.75 percent, and a 14.25 percent tax rate on digital bets. These are relatively modest rates. They are higher than Nevada (6.25 percent), and New Jersey (8.5 percent in-person, 13 percent online). However, they are far lower than Pennsylvania’s absurd 36 percent effective rate.

The state’s proposed licensing fees are nothing to scoff at though, with a $500,000 initial fee and $50,000 to renew every year. Still, committee members halved an initial $1 million fee, and Kentucky is avoiding Pennsylvania’s disastrous $10 million price tag that caused a months long wait for an operator to even apply.  

There is room for improvement in their tax rates, but at least Kentucky does not have Dr. Evil throwing out demands like Pennsylvania apparently does.

Kentucky deserves credit for avoiding so-called integrity fees as well. These fees sometimes have different names, and rates, but amount to giveaways to sports leagues that serve no purpose. Government should not be using its taxing power to directly siphon off money for leagues. The leagues will already benefit if and when sports betting drives added interest in their sports. Nevada has done fine for decades without these fees, Kentucky is right to avoid them.

With Anti-Free Speech Push, NJ Pols Try to Tell New Jerseyans to Shut Up

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Posted by Doug Kellogg on Friday, January 25th, 2019, 6:20 PM PERMALINK

A politician gets heat in the media over a non-profit entity that helps promote his agenda. This politician could take responsibility, defend the situation, or disown it and urge it to be shut down.

Or… they could blame “the system”, point the finger, and push sweeping new laws to destroy free speech in the state for citizen groups and advocacy organizations.

Of course, New Jersey Governor Phil Murphy chose the latter option.

After facing critical stories about a non-profit run by Murphy allies, the governor’s efforts to make this about state law, rather than his personal situation, have led to legislation that would drastically limit free speech of New Jerseyans and citizen-groups.

The current front-running legislation is Assembly Bill 1524 (Senate Bill 1500), which sailed through committee unanimously (why the heck are any Republicans supporting this?). However, it is no sure thing that this is the legislation that leaders back for a vote.

The bill would demand donor disclosure by political action groups (even though 527 groups already have to report donors to the IRS), and non-profit advocacy organizations - of course, unions are exempt.

This would create a chilling effect on free speech, as contributors to organizations lose their right to privacy and become subject to political retribution, harassment, and more. In today’s climate of mobs showing up to people’s houses, the risk here should be more clear than ever. Further, these new restrictions would make it next-to-impossible for the average person to start an advocacy organization.

A-1524 would likely be unconstitutional as well since it goes after more than just speech intended to influence a vote within an election timeframe. Fighting a protracted court battle to silence speech would be a waste of state resources.

Further, Murphy’s non-profit may be new and tied to his agenda, but passing laws to stop or limit these non-profits would negatively impact elected officials who work for legitimate non-profit organizations with preexisting agendas.

The landmark Supreme Court case that upheld the right to privacy for donors to non-profits was Alabama v. NAACP, a case that shows how high the takes can be when states attack privacy rights.

It’s for good reason that there is a broad coalition from across the political spectrum, and covering a variety of issues that opposes the push for these anti-free speech policies.

New Jersey needs more debate and advocacy, not less. Trenton has been steering the state in the wrong direction of late, that may make it tempting to politicians to shut down people who speak out on their failures, but that doesn’t make it right.

Don’t Tell the Associated Press, But Sports Betting is Going Well In NJ

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Posted by Doug Kellogg on Thursday, January 3rd, 2019, 6:28 PM PERMALINK

A recent, widely circulated Associated Press (AP) article, entitled “Sports betting will be no home run for state budgets”, takes a negative tone in reviewing the results (so far) of sports betting in states that have recently legalized it, largely focusing on New Jersey.

It’s surprising because there is nothing negative about the results out of New Jersey since legal sports betting began there in June. Here’s a reality check…

1) The AP piece itself included numbers showing that New Jersey is on track to match or exceed the state’s revenue estimate of $25 million over one year. The state took in around $8 million through November from sports betting. Actually meeting a government revenue projection? That is a small miracle in itself.

2) To gloss over this reality, the article highlights that sports betting revenues make up a small percentage of total state budgets. Meanwhile, nobody in their right mind argued sports betting revenue would patch state budgets - especially not for big-spending states like New Jersey.

3) New Jersey sports betting is doing more than meeting projected revenue, but that perspective is missing from the AP piece. Moody’s projected that sports betting would account for 4 percent of gaming revenue, but so far it has already accounted for 8.5 percent.

4) Sports betting seems to be boosting New Jersey gaming industry revenues, which saw a 19.5 percent increase in September this year, compared to September 2017. Government took in $23 million on gaming in September alone.

5) Pennsylvania is referenced as potentially eating into New Jersey’s industry. But Pennsylvania’s tax rate on bets is a whopping 34 percent, plus the state imposes a big licensing fee. This has delayed the rollout of sports betting in Pennsylvania. Jersey’s tax rate could be better, but their Western neighbor is going to have trouble competing.

6) While legalizing sports betting the right way (with low tax rates and no fees) is good for a state economy, consumers, and yes, government coffers, these aren’t the only reasons to do it. Bringing the existing black market into the light, creating transparency for betting, and regulating a currently illegal market are also good reasons for legal sports betting.

7) New Jersey also legalized sports betting to help localities, specifically downtrodden Atlantic City - though the state has a long way to go to reduce the tax burdens, waste, and overregulation that also contribute to their economic woes.

With the right legal framework, no fees for giveaways to sports leagues, and low tax rates, the ceiling for sports betting in the digital age is sky-high. Don’t let straw man arguments distract from the reality.

Photo Credit: Flickr - Tom Lianzi

Wyoming Lawmakers Set Table for Criminal Justice Reform

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Posted by Doug Kellogg on Monday, December 10th, 2018, 5:06 PM PERMALINK

With a new year and new legislative session rapidly approaching, leaders in the Wyoming state legislature got a head start on criminal justice reform.

The state desperately needs additional reforms as the prison population has boomed, overloading the state system, and leading to added costs for holding prisoners in county jails and private facilities.

Without any adjustment, the state would be hit with an estimated $50 million in added costs. To set the table for reform to address the issue, the legislature’s Joint Judiciary Committee endorsed three draft bills to reduce the prison population in a way that prioritizes public safety.

Parole and probation reform are the center of the reforms. Ensuring supervision is used to protect the public and in a way that facilitates reentry to society, rather than tripping up former offenders, would go a long way toward curbing prison population.

One measure advanced by the committee would cap probation terms to avoid wasting limited state resources supervising people who have not broken their probation terms for years. Another would provide more options for judges in sentencing. They could sentence offenders to unsupervised probation, and reduce sentences based on assessments of their risk to public safety.

The high costs are a sign that something is wrong with the system, and an impetus for reform. But the end goals of public safety and stronger families and communities must remain the focus.

NJ Licensing Reform Bill Would Create Jobs, Reduce Crime

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Posted by Doug Kellogg on Monday, December 3rd, 2018, 10:15 AM PERMALINK

One major issue for former offenders who have served their time and are trying to reintegrate into society is finding a job. There is probably nothing more important for rebuilding their lives than being able to find work, contribute, and earn a living. Without that stepping stone, they are more likely to commit a crime again - which adds avoidable costs to our criminal justice system.

The last thing government should do is get between ex-prisoners and a job. Yet, that is exactly what is happening through occupational licensing regimes that are complicated and costly.

This is a problem in many states, including New Jersey. Now, a bill sponsored by Assemblywoman Lopez, and Senators Singleton and Gill (A3872/S1589) would do something about this issue in the Garden State.

Currently, New Jersey has a broad morality requirement that means anyone with a prior conviction can be denied an occupational license even if the crime was not related, happened a long time ago, the person has not committed a crime since, and they can show they are on the straight-and-narrow.

An ex-offender applying for a license can put in time, effort, and money, and be denied for a past unrelated offense with no chance to fix the situation.

To address these issues, A3872 would require that occupational licensing boards consider whether an offense was directly related to the profession an applicant is seeking, and would impact their ability to do the job. Boards would also have to give notice to applicants if their past conviction was going to be a problem. And sex crimes would still be considered relevant for disqualification from any license.

This would go a long way toward making sure people who've committed non-violent crimes, been punished, and applied themselves toward training and a career, are not needlessly barred from working.

People who were denied would be given clear reason, and could take steps to further rehabilitate, and reapply at a later date.

This kind of common sense reform earns broad bi-partisan support for good reason. The vast majority of prisoners will be released one day. The best way to make our criminal justice system more effective and efficient is to ensure they are ready to become productive members of society. That cannot happen without meaningful work.

A3872 would create jobs and reduce crime. It deserves consideration and support in the legislature.

NJ Bill Would End Tipped Wage, Killing Jobs & Restaurants for No Benefit Whatsoever

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Posted by Doug Kellogg on Friday, November 9th, 2018, 1:44 PM PERMALINK

Is there a more mindless far-left policy than ending the minimum wage tip credit? For people who are supposed to care about workers, Democrats that support this move aren’t showing it.

In New Jersey - now governed by sentient left-wing interest group Phil Murphy - legislation has been proposed to end the tipped wage credit.

Assemblywoman Shavonda Sumter is the main sponsor of Assembly Bill 1972, which increases the base wage for tipped workers and moves to eliminate the credit entirely. Lawmakers are negotiating an amendment that would affect the phase in timeline.

Governor Murphy was quick to laud the measure and wants action by the end of the year. Murphy is also spearheading efforts to increase the state minimum wage to $15-per-hour, even though New Jersey’s wage is already indexed to inflation.

The wildest thing about the push to eliminate the tipped wage is that it is entirely unnecessary. Servers who work under the tipped wage credit already must make minimum wage at the end of the day.

As Marilou Halvorsen, president of the New Jersey Restaurant & Hospitality Association, told NJBIZ: “Nobody is making $2.13, and if they are, that is a wage-theft problem that should be reported… Everybody has to make at least minimum wage.”

There is no possible positive outcome for this policy. There are plenty of negative outcomes though…

Ending the tip credit would destroy a system that has been working for decades, for both businesses and workers.

For each $1 increase in the base wage for tipped workers, a median-rated restaurant is at a 14 percent increased risk of closing, a Harvard Business School study found in studying San Francisco, as California does not have a wage tip credit.

You don’t have to look cross-country to see negative consequences. In New York, over 270 restaurants closed after the minimum wage for tipped workers was increased by 50 percent in 2015.

Maine, which recently made a similar change to the tip credit, saw their legislature restore it less than a year later because it was such an overwhelmingly unpopular move. The concerns servers voiced about their net pay decreasing without the tip credit proved to be very real in practice.

Minimum Wage Hike Ballot Measures Win, Workers & Taxpayers Lose

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Posted by Doug Kellogg on Thursday, November 8th, 2018, 3:29 PM PERMALINK

On Tuesday, notable ballot measures passed in Arkansas and Missouri that mandate increases in each state’s minimum wage.

Arkansas Issue 5 will increase the state minimum wage to $11.00-per-hour by 2021. The measure passed with 68% of the vote.

Missouri’s Proposition B increases the minimum wage to $12-per-hour by 2023. It received 62% support.

Clearly voters continue to think minimum wage increases sound nice. They should not.

The negative consequences may be slow cooking, but they are apparent, while the labor movement’s support for these efforts is not about the well-being of the workers they say they aim to help.

Missouri and Arkansas voters are just the latest to fall for these policies.

The pioneer city in the recent fights for higher minimum wage mandates, Seattle, continues to offer warning signs. A University of Washington study found that as the minimum wage increased, low-wage workers received a wage increase on average. However, their hours declined, and their likelihood of remaining employed declined.

Some businesses have also reacted by hiring more experienced workers. If they have to pay a higher cost, why not get the experience they’re paying for? This risks removing entry-level opportunities for low-skill workers.

Voters may not realize it, but they are making it illegal for a teenager to get a part-time starter job.

Automation has also exploded in popularity, fueled by radical minimum wage hikes. writes:

“The affordability of the technology and rising labor costs are undoubtedly contributing to the trend, too. In 2015, 14 cities and states approved $15 minimum wages—double the current federal minimum. According to U.S. Census Bureau data analyzed by Fortune magazine, 17 percent of Americans will live in a state or metro area with a $15 minimum wage in less than five years.”

Voters think they are getting a “living wage” for Joe, instead they’re boosting C-3PO.

And don’t forget taxpayers. New York State’s 2016 move to increase the minimum wage (going to $15 downstate, and $12.50 upstate) is estimated to cost the state $838 million in added Medicaid costs in 2020.

Big labor continues to offer big support for these proposals, but they are only looking out for themselves.

The AFL-CIO says it’s about social and economic justice. However, their New York State President let the truth slip at a rally with Hillary Clinton and Andrew Cuomo when he said, “brothers and sisters, those of you who are making 16, and 17 and 18 dollars an hour, the next time your union goes in to negotiate, they’re gonna ask for 19 and 20 and 21 dollars, and up! That’s what this is about.”

The movement pushing these radical wage increases is going as fast as it can, now Louisiana’s Governor is talking up Missouri and Arkansas wage hikes as reason for his state to do the same.

Before it’s too late, the reality that aggressive minimum wage hikes hurt the workers they’re supposed to help must be made clear to voters.

Photo Credit: Flickr

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7 Reasons Cuomo’s “Opioid Stewardship” Scheme Is a Disaster

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Posted by Doug Kellogg on Thursday, October 25th, 2018, 4:03 PM PERMALINK

After failing to get a direct tax on opioid medication passed that would have made it more costly for patients, and driven up insurance costs for everyone in the state, New York Governor Andrew Cuomo turned to the Opioid Stewardship Fund concept during this year’s budget negotiations.

The fund is built on a $100 million annual fee, over six years, imposed on any companies that provide opioid medication in the state.

This rushed plan may have been more politically acceptable to legislators, but it is as bad, if not worse than a direct tax. Now that it is being implemented (poorly), its problems are becoming more clear. It’s no wonder the state has been sued.

Recently, the state attorney general requested a lawsuit be dismissed under the logic that the Stewardship system is just a tax. This totally misses the point of the lawsuit, and the problems with the fund.

Here are 7 reasons the Opioid Stewardship Fund is a disaster:

  1. The fee is arbitrary and unconstitutional. The Governor provided no reason why these companies owe $100 million to the state other than rhetoric. The state now is figuring out which companies owe what, but that is entirely based on volume of sales and activity in the state, not any due process to back the Governor’s blame claims. That is why the state has been sued by pharmaceutical distributors.
  2. It could cause a collapse of the market. The total amount owed never changes, it is a flat $100 million. So if one company that is being slammed with the fee determines it is not worth doing business in the state, then the remaining companies all pay more, causing a domino effect.
  3. Burden will impact commerce across state borders. The law says costs from the fee cannot be passed on to consumers. This is politically-convenient thinking that ends up interfering with interstate commerce. The costs have to go someplace, and the way the law is written sticks distributors with the tax bill because they are the ones physically operating in the state. If distributors hold shipments because it’s not worth sending them into New York, pricing and supply in other states will be impacted.
  4. The dream of the 1890s is alive in New York. Because some older drugs, like morphine, are exempted from the Stewardship scheme, these older opioids may continue to be sold in the state without issue. Oddly, it is more advanced, modern painkillers that could stall at the border. This would turn back the clock in a dangerous way.
  5. New Yorkers can pay now, or they will pay later. Many of the effects the state was warned about with a direct tax would still be on the table. A report from two Union College economists showed insurance premiums would go up for everyone in the state. Also, hospitals would see higher costs, and taxpayers would as well well since public hospitals are impacted by availability and cost issues for drugs and the state pays more for Medicaid.
  6. It was just a money grab, not a solution for a public health crisis. The Stewardship Fund does fund programs that are supposed to address the opioid crisis. However, it only replaces existing money, which could then be shifted to a different part of the state budget. The fund offers no new approach to fixing the opioid crisis. It seems to be more about Governor Cuomo finding more cash for spending increases that are higher than he admits.
  7. Patients will be pushed to the black market. Sadly, disrupting the supply of legitimate medicine could drive more New Yorkers to seek far riskier drugs. If patients in need of medicine can’t get it they may turn to options on the black market. Deaths from illicit fentanyl, largely from China and Mexican cartels, spiked to 5,000 in 2014 and rocketed to over 26,000 in 2017, according to Bloomberg News.


Photo Credit: Wikipedia

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Florida: Gillum Platform Could Kill $12B In Economic Growth with $2.6B Tax-and-Spend Spree

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Posted by Doug Kellogg on Monday, October 22nd, 2018, 12:35 PM PERMALINK

Maybe Florida is tired of winning. The state is seeing a competitive election between leftist Democrat, Bernie Sanders’ acolyte Andrew Gillum and Republican Congressman Ron DeSantis. 

This, despite the fact Florida has been an overwhelming success story. After two-terms of Governor Rick Scott and a Republican legislature, the state’s low, and no tax environment has sparked a boom that is the envy of other states. People and businesses have flocked to Florida, and the economy has grown. 

Just this week, Florida recorded a record jobs gain for the past year, adding over 407,000 jobs between September 2017 and September 2018. 

 The highly populated, diverse state, is the shining example of how right-of-center, conservative governance works. 

But Andrew Gillum’s agenda would change all that, as a new analysis from James Madison Institute (JMI), Florida’s free market think tank, shows.

Gillum is calling for a 40 percent hike in the corporate income tax rate, which will immediately move Florida from leading the region in competitiveness to last. 

The story only starts there. The candidate estimates this is a $1 billion tax hike, but (as JMI notes) this is a static estimate. Surely some businesses will change behavior, and move out, reducing the actual revenue haul. 

Even the rosy $1 billion estimate does not come near paying for Gillum’s $2.6 billion wish list. 

If he actually wants to cover his proposed new spending, the corporate rate would have to go to 11 percent, or 49th in the nation. That drops Florida behind Germany internationally as well. 

Let’s be clear, that means Gillum’s policies would cost the Florida economy a massive $12 billion, while driving up costs for consumers. 

Why would Floridians, who have enjoyed a booming state economy, want this? Maybe it should be no surprise Gillum has so many fans outside Florida, like New York City Mayor Bill de Blasio, George Soros, and Bernie Sanders. 

It could be far worse. These figures do not cover Gillum’s rhetoric in support of “Medicare-for-All”. 

If he pursued that at the state level, it would cost $163 billion. That is quintuple the size of Florida’s $32 billion budget. If funded through sales tax, that would require an inconceivable 39 percent sales tax rate. 

That’s a talking point that Gillum can’t cash, not without massive tax increases that will make Florida unaffordable. 

Gillum of course pitches more spending on education as the reason for his tax hikes. Yet, a quick look at Florida’s performance in education shows the state has already increased education spending 37 percent during Gov. Scott’s tenure. 

Education reforms have helped boost the state’s performance, currently Florida outperforms the nation in 8th grade reading and math (according to NAEP data). 

New York State, for example, trails Florida despite New York routinely ranking at-or-near the top in spending-per-pupil. 

Gillum’s “education” spending does not seem motivated by what’s best for student progress, but grabbing more tax money to hand to his pals at the American Federation of Teachers who have boosted his campaign. 

Meanwhile, Ron DeSantis has pledged to protect taxpayers from any and all tax hikes in order to keep Florida’s welcoming tax climate, and maintain the state’s success over the past decade. 

 DeSantis would also phase out the bizarre business rent tax, and trim Florida’s corporate income tax rate to compete with the lowest tax states, and focus on school choice and continuing the state’s successful policies on education. 

The numbers don’t lie. The choice for Florida is between Andrew Gillum’s massive tax hikes that will make the state more unaffordable for families and businesses, and Ron DeSantis’ policies that will protect taxpayers and keep the state growing and prospering.  

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