Drew Carlson

North Carolina Senate Votes on Final Budget Bill

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Posted by Drew Carlson on Tuesday, November 16th, 2021, 4:31 PM PERMALINK

Today, the North Carolina Senate passed the new compromise state budget with a bipartisan 41-7 vote. The North Carolina House will soon follow suit and send the new budget to the desk of Governor Roy Cooper (D). Governor Cooper will reportedly sign it, thereby enacting another round of significant tax relief. 

The compromise budget lowers North Carolina’s personal income tax rate from 5.25% to 3.99% over six years. The standard deduction and child tax credit would be increased, while military pensions would be exempt from state income tax. The corporate tax rate, which is now at 2.5%, would be phased out over six years, starting in 2025 and continuing until it is completely eliminated in 2031.  

The new North Carolina budget also gives state employees a 5% pay raise over the next two years along with a $1000 bonus. Public school teachers could receive a bonus of up to $2800 while a salary supplement will be given to teachers in low wealth counties to help them retain employees. The minimum wage for other public school employees will increase to $13 this fiscal year and $15 the next and education funding will increase overall.  

The new budget does not include Obamacare’s Medicaid expansion, but does expand the entitlement program to cover 12 months of postpartum care. $6 billion will be added to the State Capital and Infrastructure Fund (SCIF) to be used to build, renovate, or repair buildings for various state agencies. There will also be new to the governor’s emergency powers starting in 2023. The full budget will cost $25.9 billion this fiscal year, and $27 billion the next one. 

Governor Phil Cooper and Republican Legislative leaders negotiated for months to find common ground. While no deal was made, compromises such as employee pay raises and increased education spending have given both sides hope, even if neither got everything they wanted. The governor expressed openness to signing the budget but made no commitments. His spokesperson Jordan Monaghan responding to questions saying, “The Governor and his staff are reviewing the budget.” 

Senate Leader Phil Berger is optimistic, “We have made significant progress over nearly two months of good-faith negotiations with the governor, and I’m optimistic that the budget will have a strong bipartisan vote and that Gov. Cooper will sign it into law."  

If the bill is passed by the Senate today, it will be voted on by the House tomorrow. If passed by the House, the budget will go to the governor’s desk. There, Governor Murphy will have the choice to veto the bill, sign it, or allow the budget to pass into law without his signature. If he does veto, Republicans will only need three House Democrats and two Senate Democrats to vote “yes” to override.  

Only eight years ago North Carolina had a progressive personal income tax system with a top rate of 7.75%, the highest income tax rate in the southeast. With the enactment of this new budget, North Carolina will soon have a flat income tax of 3.99%. North Carolina had the highest corporate tax rate in the southeast only eight years ago. Today North Carolina’s corporate rate is the lowest in the nation and will be on the path to elimination with the enactment of this new budget. North Carolina is a testament to how, no matter how uncompetitive a state tax code gets, lawmakers can take steps to rectify it in fairly short order.  

Photo Credit: “North Carolina State Legislature Building” by Dave Crosby is licensed under CC BY-SA 2.0.

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Election Shockers in New Jersey

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Posted by Drew Carlson on Wednesday, November 10th, 2021, 3:30 PM PERMALINK

This has been quite the week for New Jersey Republicans. They picked up at least 4 - and possibly as many as 8 - Assembly seats, elected a new Minority Leader for the General Assembly, and saw the Democratic Senate president ousted by a truck driver. 

In Tuesday’s elections, Republicans flipped at least four seats in the General Assembly and seem on track to flip four more. This would bring the Republicans’ total number of seats up from 28 to 36, the largest Republican caucus in New Jersey since 2001. It also reduces the Democratic majority’s margin from 44 to 36 seats.  

Of the Republicans who won in the Assembly, ten signed the Taxpayer Protection Pledge, vowing not to raise any taxes if elected. In the Senate, 12 of the victorious Republicans signed the pledge. 

Assembly Republicans also held a leadership election on Thursday to appoint a new Minority Leader. John DiMaio won the election 25-19. Nancy Muñoz had been on track to win the position, but her campaign faltered after conservative activists objected to some of her views on abortion, guns, and vaccinations. Republican Ned Thompson will be Republican Conference Leader while Antwan McClellan was picked as minority whip.  

Even with a much-closer-than-expected race for governor, the shocker of the election cycle was in the State Senate, where Republicans netted one seat as Democratic Senate President Steve Sweeney, one of the most powerful politicians in New Jersey, was defeated by a truck driver.  

Edward Durr has become a media staple for pulling off one of the greatest political upsets in recent memory. In true David and Goliath fashion, Durr defeated Sweeney to represent the third legislative district, despite possessing a miniscule budget and Sweeney holding the position for nearly a decade. In 2017, Republican challenger Fran Grenier spent millions in a failed attempt to unseat Sweeney. Durr succeeded while spending less than $10,000 (erroneously reported by some as under $200). 

The 58-year-old father of three and grandfather of six worked as a truck driver for the last 25 years, running deliveries for the furniture store Raymour & Flanigan. After a local Sherriff told him not to bother applying for a concealed carry permit, Durr decided to enter politics, ultimately leading to his stunning victory over Sweeney.  

Durr says he isn't much of a politician, saying “I’m very blue collar. My father was a carpenter, I did carpentry, and then I gravitated into truck driving — that’s what I do for a living, I’m a truck driver.” When asked what he will do upon taking office, Durr said, “I really don’t know. That’s the key factor. I don’t know what I don’t know. So, I will learn what I need to know.”  

Photo Credit: “Vote!” by kgroovy is licensed under CC BY-SA 2.0.

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Michigan Supports Parents, But Does Gretchen Whitmer?

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Posted by Drew Carlson on Tuesday, October 26th, 2021, 3:50 PM PERMALINK

Earlier this week, lawmakers in Michigan passed legislation to give low-income families flexibility over their children's schooling. Now Gretchen Whitmer will have to decide who she values more, students or the teachers unions. 

This began with the recent introduction of four bills to the Michigan Legislature and voted on today, SB 687, SB 688, HB 5404, and HB 5405. These bills allow students across the state to access Opportunity Scholarships.  Michigan would have given taxpayer dollars back to low-income parents to pay tuition for non-public  opportunities. These options would provide families with more flexibility in their children's education, letting them choose the place they think gives the best education. 

Opportunity scholarships are a type of Educational Savings Account, a form of school choice that eight states have already enacted. According to EdChoice, "Education savings accounts (ESAs) allow parents to withdraw their children from public district or charter schools and receive a deposit of public funds into government-authorized savings accounts with restricted, but multiple uses."  

One of the most recent states to pass ESAs was West Virginia. Their New Hope Scholarship program, which launches in 2022, provides students up to $4,600 to use in various approved services, including ones from out-of-state providers. Other states have experimented with ESAs, but "these scholarship programs have generally been limited by geographical area or to particular populations of students or families (such as children with disabilities or those from a military background)." 

Michigan's is available to students across the state, giving parents more power in their children's education. "Because of government policies, many parents can only afford to send their children to government schools, thus limiting those parents' ability to direct their children's education," said Michelle Lupanoff , a Michigan parent with two High School-aged children, "The ability to use the funds in our education accounts will reduce our financial burden to pay for private school." 

"Being able to use funds from our education account would help provide more financial security for our family and our children's future," said Jill Hill, mother of a first grader in Kalamazoo. "From this current situation, we know the future is unpredictable, so if we can use that savings now it would provide even more security down the road." 

The head of education policy at the Mackinac Center, Ben Degrow also supports the new bills, saying, "The Student Opportunity Scholarship plan deserves full support. Enacting the program would offer more than a million Michigan students the sort of broad access to education options that's already available in many other states."  

For too long, the government has limited school choice to only those with the money to escape the public school system. Those without funds were stuck with their district, regardless of quality. Giving low-income parents the power to choose is a great way to orient schooling toward the needs of the children, not the unions. 

Unfortunately, not everyone sees it that way. A spokesperson for Governor Gretchen Whitmer said the "legislation is a non-starter,” claiming that “these bills are voucher schemes that have been shamelessly introduced during a pandemic, that would send Michigan taxpayer dollars mainly to private and religious schools.” 

The bills were passed on Thursday, October 20, and will soon arrive at the desk of Governor Gretchen Whitmer, who can either choose to sign them or to veto them. The teachers' unions are one of Whitmer's biggest donors, and "this year alone, Whitmer has vetoed two proposals to fund students rather than systems with federal COVID-19 relief money,” according to the Hill.  

Michigan's push for school choice is the most recent step in a movement gaining momentum across the country as more parents recognize that the public school system isn't serving their students’ needs. Letting parents choose where their children can go to school is a no-brainer to give the power to people, not the government.  

When the bills reach her desk, Gretchen Whitmer will have to make a choice between the needs of students and the needs of her donors.  

Photo Credit: "Family Walking” by Nick Amoscato is licensed under CC BY 2.0.

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Some States Demonstrate the Best Way to Replenish Unemployment Insurance Funds, Others Show What Not to Do

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Posted by Drew Carlson on Tuesday, October 19th, 2021, 11:02 AM PERMALINK

Across the country, states have depleted their unemployment insurance funds responding to the massive job losses precipitated by last year’s lockdown-driven economic downturn. Some states have since replenished these trust funds, but lawmakers in most states still need to take action to do so, otherwise businesses will be hit with payroll tax hikes that make it even more expensive to hire new workers.  

The Tax Foundation notes that “states have paid out $175 billion in unemployment benefits since the start of the pandemic, with the federal government providing an additional $660 billion.” Because of this, “taking debt into account, state trust funds now have a negative aggregate balance of -$11 billion and are $115 billion shy of minimum adequate solvency levels.” 

Fortunately for governors and lawmakers in these states, they have approximately $95 billion in federal cash from the American Rescue Plan Act (ARPA) available to them that can be used to refill unemployment insurance (UI) trust funds and repay UI related federal debt. However, instead of using federal aid to replenish these funds, governors in several states would rather foot the bill through payroll tax hikes. 

As the Illinois Policy Institute note, "the two ways states can fund their trusts are by either increasing employer payroll taxes or cutting benefits for the unemployed.” 

Unfortunately for Illinois taxpayers, their governor seems set on paying the state’s UI debt through the former, even though there are billions in federal funds available that could be tapped as an alternative to higher taxes on employers. Illinois took out a $4.2 billion federal loan last year to refill its unemployment fund. Illinois last month missed the deadline to repay this debt, “which leaves Illinois taxpayers on the hook to pay $60 million in annual interest on that loan,” notes IPI. notes IPI.  

Similarly in New Jersey, it was recently reported that “Gov. Phil Murphy remains noncommittal about using federal COVID relief money to offset millions of dollars that New Jersey small businesses must pay to replenish the state’s Unemployment Insurance (UI) fund.”.  

New Jersey has $6.2 billion in federal aid available, more than enough to cover the $885 million needed to replenish the fund. With the economic hardships brought on by the lockdowns and record unemployment levels, higher taxes are the last thing businesses need. To raise taxes instead of using readily available ARPA funds is inexcusable.  

In contrast to Illinois and New Jersey, where Democratic governors are declining to use readily available federal funds to replenish UI funds instead of resorting to state tax hikes, lawmakers in Texas are refilling their UI trust fund and pay off day with the federal funds that ARPA made available to the state. Before the Texas Legislature’s special session ended early this morning, the lawmakers approved Senate Bill 8, which applies more than $7 billion in federal funds toward the state’s UI trust fund. Unlike in Illinois and New Jersey, Texas lawmakers are using ARPA funds for their designed purpose and avoid employer tax hikes in the process.  

Raising taxes to refill the unemployment funds is inexcusable when state lawmakers and governors have billions in federal funds that can and should be used for that purpose. Congress sent states hundreds of billions of dollars to help them pay for pandemic-related expenses. For state officials not to use those funds to refill their UI funds, and to raise taxes instead, is a betrayal of taxpayers. As the aforementioned states are demonstrating, some states, like Texas, will take the optimal approach, while states like Illinois and New Jersey will serve as examples of what not to do, just as they do with so many other policy matters.  

Unfortunately for Illinois taxpayers, their governor seems set on paying the state’s UI debt through the former, even though there are billions in federal funds available that could be tapped as an alternative to higher taxes on employers. Illinois took out a $4.2 billion federal loan last year to refill its unemployment fund. Illinois last month missed the deadline to repay this debt, “which leaves Illinois taxpayers on the hook to pay $60 million in annual interest on that loan,” notes IPI. notes IPI.  

Similarly in New Jersey, it was recently reported that “Gov. Phil Murphy remains noncommittal about using federal COVID relief money to offset millions of dollars that New Jersey small businesses must pay to replenish the state’s Unemployment Insurance (UI) fund.”.  

New Jersey has $6.2 billion in federal aid available, more than enough to cover the $885 million needed to replenish the fund. With the economic hardships brought on by the lockdowns and record unemployment levels, higher taxes are the last thing businesses need. To raise taxes instead of using readily available ARPA funds is inexcusable.  

In contrast to Illinois and New Jersey, where Democratic governors are declining to use readily available federal funds to replenish UI funds instead of resorting to state tax hikes, lawmakers in Texas are poised to refill their UI trust fund and pay off day with the federal funds that ARPA made available to the state.  

The Texas legislature is advancing Senate Bill 8, which applies more than $7 billion in federal funds toward the state’s UI trust fund. Unlike in Illinois and New Jersey, Texas lawmakers are preparing to use ARPA funds for their designed purpose and avoid employer tax hikes in the process.  

Raising taxes to refill the unemployment funds is inexcusable when state lawmakers and governors have billions in federal funds that can and should be used for that purpose. Congress sent states hundreds of billions of dollars to help them pay for pandemic-related expenses. For state officials not to use those funds to refill their UI funds, and to raise taxes instead, is a betrayal of taxpayers. As the aforementioned states are demonstrating, some states, like Texas, will take the optimal approach, while states like Illinois and New Jersey will serve as examples of what not to do, just as they do with so many other policy matters.  

Photo Credit: “Hearne TX - storefront.jpg” by Matthew Rutledge is licensed under CC BY 2.0.

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Property Tax Relief at Last for the People of Texas

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Posted by Drew Carlson on Tuesday, October 5th, 2021, 11:45 AM PERMALINK

On Thursday, September 30, the Ways and Means Committee of the Texas House of Representatives held a hearing during which people testified for and against two bills meant to provide property tax relief, Senate Bill 1 and House Bill 90. 

What do these bills do? SB 1 would allocate at least $2 billion of the current state budget surplus to pay for that amount of property tax reduction. Giving taxpayers immediate property tax relief, which benefits both owners and renters, is a great way to utilize surplus cash. HB 90 is another property tax relief measure, but designed to be more permanent. It would allocate 90% of surplus revenue above Texas’ spending cap, which was strengthened this year with the passage of SB 1336, and use it to pay down property tax relief. Both bills use surplus money to fund schools and give relief to homeowners paying local property taxes.  

“What I have heard repeatedly from my constituents since the day I started block walking is, ‘please help us with our property taxes, they’re too high,” said Rep. Tom Olliverson, author of HB 90, adding it is “always the number one, number two, or number three thing on [their] mind”. 

Vance Ginn, chief economist of the Texas Public Policy Foundation, spoke in favor of both bills: 

“I think this would help the economy. It would help to...reduce some of the up and downs that families face from their overall budgets from saying ‘how much my property taxes are going to go up’,” Ginn said in testimony.  

“Really what these measures are doing, whether it be SB 1, House Bill 90, is its basically saying look the state is going to fund schools, which is part of what is in the founding documents of our constitution,” Ginn said, pointing out that, per Article Seven of the Texas Constitution, the Texas Legislature is supposed to fund schools, not local property taxes.  

These property tax relief measures have detractors. Several witnesses came forward and expressed concern that the bills may hurt schools’ ability to generate funding, since both forbid public schools from levying a property tax hike for the 2022-23 school year.  

Eva DeLuna Castro, a budget analyst for Every Texan, a leftwing think tank, said that HB 90 moves Texas “further and further away from a stable way to pay for schools.” Chandra Villanueva, also from Every Texan, opposed both bills, saying that they “[put] tax cuts ahead of kids,” and that bills compressing property tax rates without a plan to pay for them “are a direct attack on the stability of our public education system.” 

“You’ll still be able to fund education,” Ginn notes in response to these dire warnings about property tax relief. “This is not about defunding or anything education. This is still about funding education based on the laws Texas has.”  

Both bills were left pending after the hearing, but are expected to be passed out of committee soon and schedule for a floor vote in the House. The current special session of the Texas Legislature ends on October 19. If Texas property owners are to receive the relief they have long desired, one or both of the aforementioned bills will need to be voted out of both chambers by that date.  

Photo Credit: "Hawkes House in Cedar Hill, Texas.jpg” by Renelibrary is licensed under CC BY-SA 3.0.

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New York State Is Hunting Down Fleeing Taxpayers

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Posted by Drew Carlson on Tuesday, September 21st, 2021, 11:30 AM PERMALINK

They can’t be bargained with, they can’t be reasoned with, they don’t feel pity or remorse or fear, and they will not stop ever until they have your tax dollars… No, we’re not talking about the Terminator, but the New York Tax and Finance Department.  

This year up to 149,000 former New York residents have received notices from the New York Tax and Finance Department asking them to provide proof of residence and personal income allocation, to see if they owe the state more than they paid. “The state is being very aggressive in going after people who are claiming to have moved out of New York,” said Alan Goldenberg, a state and local tax principal at Anchin, Block & Anchin LLP.” 

This course of action isn’t just unusual for the sheer volume of letters, it is also unusual for the income bracket being targeted. “Normally, it would take $1 million a year in income to trigger heightened scrutiny, but many people who are earning far less are receiving letters.” Many of those receiving letters make only $100,000-$300,000 a year, much less than the usual recipient of these letters.  

The reason for this is that many people left New York during the pandemic lockdowns, trying to take their tax dollars with them. To recoup these losses, New York needs to force these people to continue paying taxes, hence the deluge of audits. 

Now, you may be wondering, how can this be legal? Doesn’t moving to another state mean you no longer owe taxes to your old one? The answer lies in the “convenience rule” for telecommuting, in which “New York state taxes the money that nonresident workers draw from in-state sources, including the income that commuters make when they choose to work from home.”  

The only ways for workers in the other states to avoid this rule is to either to prove they worked remotely out of necessity (which seems feasible during the COVID-19 pandemic), rather than convenience, or prove that their employer established an office in that state.” Recently New Hampshire sued Massachusetts over that state’s collection of tax dollars from remote workers who were no longer commuting into the Boston area, but the Supreme Court rejected it, while “federal courts have ruled that states can tax nonresidents’ income when employees have a substantial link to the state doing the taxing.” 

As if that wasn’t bad enough, to even prove they are nonresidents, former New Yorkers must prove five things: "The amount of time spent, the size and value of their homes, the location of valuable items like heirlooms or wedding photographs, the location of an active business, and lastly, where your family lives.” In the meantime, “The burden of proving where you were falls on you,” Chernick said. “If you can’t prove a date where you were, then the state is going to allocate that data to New York.” If they can’t prove these things, they will be taxed as if they were still living in New York. 

The state’s tax agents are some of the most aggressive in the nation. They will check refrigerator contents, which doctors you go to, and where your pets are located. 

New York was overtaxed and overregulated before the pandemic, but the lockdowns turned conditions from annoying to unbearable for many people. They can leave, but they can’t check out without a fight. 

Photo Credit: "Queensboro Bridge New York October 2016 003.jpg" by King of Hearts is licensed under CC BY-SA 4.0

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More States Are Reducing Barriers To Employment

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Posted by Drew Carlson on Wednesday, September 15th, 2021, 12:31 PM PERMALINK

Over the past two years, lawmakers in various state capitals have enacted a new reform that will make occupational licensing requirements less of a barrier to employment. This new reform is known as universal license recognition (ULR). Arizona began this reform movement when it passed its ULR law in 2019. As of now, at least sixteen states have enacted it, the most recent being Mississippi in March (while four of these 16 laws had been on the books prior to 2019, this reform movement took off in earnest after the passage of the Arizona bill in 2019).  

What are ULR laws?  They are laws by which states recognize occupational licenses granted by other states. This means that if a worker in a licensed occupation moves to a new state that has passed universal recognition legislation, they can get to work right away. This gives workers greater flexibility and makes states with a ULR law more attractive to new residents.   

ULR laws in various states tend to be similar, but not identical. According to Iris Hentze at the National Conference of State Legislatures, two of the most common requirements for recognition are “being licensed and in good standing with your home licensing board” and that the applicants “pay applicable fees and...undergo background checks.” While workers will need to eventually get a new license for the state they’ve moved to, in the 16 states with ULR laws “the process is shorter for licensed workers than it is for those seeking a license for the first time.” 

One of the most significant differences between different ULR laws is whether they require “substantial equivalence” or “scope of practice” for recognition. According to Hentze at NCSL, states using “substantial equivalence” require that “that the license an applicant holds in his or her home jurisdiction be substantially equivalent to or exceed its own requirements” to have their license recognized in their new state of residence.  

States using “scope of practice” on the other hand require the applicant to be “currently licensed or certified by another state to work in an occupation with a similar scope of practice”. According to the America Legislative Exchange Council (ALEC), scope of practice is “a more direct comparison of whether a license is to perform the same day-to-day duties of the job itself.” 

According to the Goldwater Institute, since “Arizona became the first state to enact universal recognition,” it has so far helped 3,000 professionals get to work in Arizona.  

The push for universal license recognition was further spurred on when the COVID-19 pandemic showed how licensing requirements stifle worker mobility, particularly when additional healthcare workers were needed in some states more than others. According to ALEC, to meet demand “states like New York...issued temporary executive orders recognizing licenses for out-of-state healthcare workers.”  

Since then, several more states have passed Universal Recognition laws, bringing the total to sixteen. Lawmakers in other states have introduced ULR that did not pass in 2021, but can be considered in future legislative session. According to the Goldwater Institute’s Heather Curry, “this session, more than 15 states have introduced legislation to extend out-of-state license recognition to skilled professionals.” 

In a few short years, we’ve gone from zero to 16 states with ULR laws, four of them enacted in 2021 alone, with still more debating similar measures. This idea is catching on, as more and more states realize that letting workers do their jobs with minimal hindrance brings plenty of benefits and few, if any, costs. 

Photo Credit: "Utility Worker" by Dori is licensed under CC BY-SA 3.0.

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State of State Governments: How they compare in size, which are growing, and which are shrinking

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Posted by Drew Carlson on Thursday, September 2nd, 2021, 1:50 PM PERMALINK

Today Americans for Tax Reform released an updated list of the 50 states ranked by the size of their state government, using state spending as a percentage of state GDP as the metric for comparison. The state spending data comes from the National Association of State Budget Officers’ annual state spending surveys and the state GDP figures come from the U.S. Bureau of Economic Analysis.  

In addition to looking at the size of all 50 state governments today, ATR examined how the sizes of all 50 state governments have changed over the past decade. 

 

Size of State Governments Today (2019) 

  1. West Virginia (24.81%) 
  2. Arkansas (21.83%) 
  3. Alaska (20.93%) 
  4. New Mexico (19.89%) 
  5. Vermont (19.58%) 
  6. Hawaii (18.94%) 
  7. Oregon (18.93%) 
  8. Mississippi (18.67%) 
  9. Kentucky (18.26%) 
  10. Rhode Island (18.14%) 
  11. Delaware (17.61%) 
  12. Wisconsin (16.31%) 
  13. Maine (14.99%) 
  14. Montana (14.97%) 
  15. Alabama (14.36%) 
  16. Connecticut (13.7%) 
  17. Iowa (13.51%) 
  18. Louisiana (13.44%) 
  19. Michigan (12.64%) 
  20. Pennsylvania (12.25%) 
  21. South Carolina (12.13%) 
  22. Maryland (12.06%) 
  23. Oklahoma (12.04%) 
  24. Colorado (12.01%) 
  25. Wyoming (12.01%) 
  26. Minnesota (11.98%) 
  27. Arizona (11.96%) 
  28. North Dakota (11.85%) 
  29. Ohio (11.54%) 
  30. New Jersey (11.53%) 
  31. Massachusetts (11.5%) 
  32. New York (11.46%) 
  33. Virginia (11.3%) 
  34. Idaho (11.24%) 
  35. California (10.73%) 
  36. Kansas (10.58%) 
  37. Nevada (10.46%) 
  38. Nebraska (10.31%) 
  39. Tennessee (10.3%) 
  40. Indiana (10.1%) 
  41. Georgia (9.85%) 
  42. Utah (9.84%) 
  43. North Carolina (9.61%) 
  44. South Dakota (9.44%) 
  45. Illinois (9.29%) 
  46. Washington (9.21%) 
  47. Missouri (9.18%) 
  48. Florida (8.57%) 
  49. New Hampshire (8.1%) 
  50. Texas (6.86%) 

 

Fastest Growing State Governments of the Last 5 years: 

  1. Nevada (43.7%) 
  2. Pennsylvania (19.81%) 
  3. Kentucky (18%) 
  4. Delaware (17.51%) 
  5. Indiana (16.23%) 
  6. Connecticut (15.68%) 
  7. California (15.37%) 
  8. Louisiana (14.73%) 
  9. Iowa (14.57%) 
  10. New Jersey (13.71%) 

 

Fastest Shrinking State Governments of the Last 5 years: 

  1. Wyoming (-38.41%) 
  2. Arizona (-8.73%) 
  3. Massachusetts (-7.3%) 
  4. Texas (-7.19%) 
  5. Tennessee (-2.15%) 
  6. Alaska (-1.8%) 
  7. Maine (-0.95%) 
  8. Mississippi (0.57%) 
  9. Oklahoma (0.61%) 
  10. Idaho (0.95%) 

 

Fastest Growing State Governments of the Last 10 Years: 

  1. Connecticut (76.44%) 
  2. Nevada (40.01%) 
  3. Virginia (30.26%) 
  4. Alabama (30.13%) 
  5. Oregon (28.54%) 
  6. Kentucky (25.43%) 
  7. New Jersey (24.51%) 
  8. Rhode Island (23.88%) 
  9. Arkansas (23%) 
  10. Delaware (22.57%) 

 

Fastest Shrinking State Governments of the Last 10 years: 

  1. Wyoming (-25.09%) 
  2. West Virginia (-17.93%) 
  3. North Carolina (-13.17%) 
  4. Oklahoma (-11.29%) 
  5. Alaska (-6.98%) 
  6. Tennessee (-6.88%) 
  7. Texas (-5.53%) 
  8. Massachusetts (-3.49%) 
  9. South Carolina (-2.48%) 
  10. Maine (-1.68%) 

Photo Credit: Martin Falbisoner

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A New Vision for Virginia

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Posted by Drew Carlson on Tuesday, August 24th, 2021, 3:07 PM PERMALINK

Republican gubernatorial candidate and Taxpayer Protection Pledge signer Glenn Youngkin recently outlined his plan to provide relief to Virginia taxpayers. His plan includes lowering taxes, investing in students, and funding the police. 

Virginia’s taxes and fees have increased at twice the rate of GDP growth. Youngkin’s plan will reverse this unfortunate trend.  

First, Youngkin calls for Virginia to refund $1.5 billion tax dollars to taxpayers, or $300 per individual, and to suspend the recent gas tax increase for one year. Youngkin also supports small businesses and wants to protect them from over-taxation. To achieve this end, Youngkin calls for “fully funding the Virginia Unemployment Insurance Fund to prevent payroll taxes from increasing in 2022, providing a one-year tax holiday for small businesses on the first $250 thousand of income.”  

He also wants to invest $700 million toward bringing universal broadband to rural Virginia to bridge the digital divide and allow them access to the benefits broadband brings with it. 

Youngkin’s proposal would also work to fix Virginia's schools and help its students. To do this, Youngkin operates on a simple principle: Parents should have power over how their children get educated.  

 Youngkin would have Virginia “provide $500 per public school student in refunds to parents to invest in student educational recovery” after many students’ education suffered from the lockdowns last year. In addition, to give parents more choice, Youngkin would pilot 20 new charter schools. 

Youngkin believes supporting police and law enforcement is the answer to support public health and safety, not defunding them. “The Youngkin proposal would commit...$500 million to public safety and mental health.” In addition, to stop the wave of resignations and early retirement of police officers, Youngkin would offer a $5000 retention bonus for police officers over the next three years. He also calls for investing in better pay and better equipment for police and first responders.  

In contrast, Youngkin’s opponent Terry McAuliffe believes that the higher taxes should stay. He called Youngkin’s gas tax plan “ a "gimmick" that would "literally destroy Virginia.". In fact, as Governor,  McAuliffe proposed several new taxes including taxes on products like “real estate sales, hotel stays and wholesale gasoline”.  

Glenn Youngkin has a different vision of Virginia than his opponents. While free-spending candidates like Terry McAuliffe “live by the philosophy that government should decide all things” Youngkin believes the exact opposite, that government should take a step back and let the people choose for themselves how their money should be spent. As governor, he would be a strong ally to Virginian taxpayers. 

Photo Credit: Glenn Youngkin

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Washington State Rebels Against Income Taxes

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Posted by Drew Carlson on Thursday, August 19th, 2021, 12:54 PM PERMALINK

Washington State taxpayers have rejected income taxes whenever given the opportunity, yet the free-spending liberals at the State House keep trying. The state’s new capital gains income tax has come under new scrutiny for violating the Washington State Constitution. 

The most recent push for an income tax began 2019, when the Court of Appeals struck down the law forbidding local income taxes. This year the state legislature passed a 7% tax on capital gains income greater than $250,000.  Two lawsuits have been filed, one by the Freedom Foundation and the other by former state Attorney General Rob McKenna on behalf of the Washington Farm Bureau, demanding that the courts strike down this unconstitutional income tax . Douglas County Judge Brian Huber combined the two suits and heard preliminary arguments on them yesterday.  

Professor Scott Schumacher, a professor of Tax Law at UW, agrees with the assessment on the capital gains income tax, saying, “A capital gains tax is just a tax on certain type of income . . . To the extent this is an income tax, and I think it is, it’s going to be found unconstitutional.”   

The state Constitution bans graduated income taxes. This means that if the state were to pass an income tax, it would need to be leveled equally to all people, regardless of income. This is because “Washington’s state Supreme Court has consistently ruled that income is property (meaning you own it). This is why a graduated income tax has been prohibited without a constitutional amendment and a tax on income must conform with the constitutional restrictions on property taxes.” 

Regardless of the outcome of this lawsuit. Municipalities have already started to fight back. Last week, Union Gap joined the cities of Battle Ground, Granger, Spokane, and Spokane Valley in voting to ban a local income tax. Both Union Gap and Battle Ground’s city councils were unanimous in their decision. In addition, Yakima City approved sending its voters a charter amendment to ban an income tax. “Both Yakima’s and Spokane’s City Charters also already include a supermajority requirement for the councils to impose or increase any taxes.”  

One of Washington State’s most competitive traits is that it has no income tax. This “has long been advertised by the State Department of Commerce as being a “competitive advantage” for Washington. State voters have also made it consistently clear they don’t want an income tax.” 

Six different ballot measures to change this by amending the state constitution have failed, in 1934, 1936, 1938, 1942, 1970 and 1973. Four ballot measures to introduce a state income tax also failed, in 1944, 1975, 1982 and 2010. Additionally, in 1984 Washington passed a law forbidding local income taxes.  

The Olympia establishment has made their intentions clear. They want an income tax in Washington. Voters and municipalities have repeatedly sent their reply: No.  

Washingtonians hate the income tax. Olympia would do well to listen to their people and end this pointless quest for higher taxes. If they don’t, they may find their own constituents turning against them. 

Photo Credit: Jimmy Emerson, DVM

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