State legislatures across the country are either in session or will be convening sessions in the coming weeks and months – some of them special sessions and others the resumption of those suspended earlier this year. As governors and legislators return to work facing new challenges in the aftermath of the pandemic, Americans for Tax Reform is offering a list of policy recommendations for elected officials to consider.  

ATR’s recommendations fall into two main categories: 

1) Balancing budgets without raising taxes & reforms that stimulate economic growth.  

2) The codification of deregulatory reforms enacted by executive order in response to the pandemic that should be continued in perpetuity. 

Step 1: First Do No Harm, Balance Budgets Without Tax Hikes

It is certain that some governors, lawmakers, and interest groups, in both blue and red states, will call for various tax hikes in response to the pandemic-driven drop in state and local tax collections. A number of such proposals have already been put forth and are being debated, such as the progressive income tax hike that will be on the Illinois ballot this fall, the $12 billion property tax hike in California that Joe Biden has endorsed, the income tax hike the Colorado progressives are pushing on the November ballot, and the additional $4 billion in annual tax hikes on businesses proposed by Golden State Governor Gavin Newsom (D) as part of his revised budget plan, just to name a few examples. 

More than 20 million Americans are now unemployed amid the pandemic-driven recession. Thousands of businesses have closed down entirely. The last thing individuals, families, and employers can afford right now is a mid-recession tax hike that would reduce household income and diminish the job-sustaining capacity of employers at a time when many businesses are struggling to keep their doors open. 

Aside from the economic harm a mid-recession tax hike would inflict, raising taxes would also be a politically perilous move amid the current downturn. A recent poll out of California, no bastion of conservatism, found 80% of those surveyed oppose raising taxes as a way to shore up state government revenues. 

Aside from the fact that raising taxes would depress economic growth at a time when reforms that instead accelerate growth are what’s desperately needed right now, the data make clear that a downward adjustment in the trajectory of state spending was needed even before the pandemic-driven downturn arrived. 

Total state government spending data for all 50 states shows that spending spending as been growing at an unsustainable clip for years, well in excess of the rate of population and inflation. Since 2000, total state spending has increased by 118%. Had all 50 states grown government spending in line with population and inflation during that period, total state spending in 2018 would’ve been nearly half a trillion dollars less than was the case that year. 

In addition to first doing no harm by stopping efforts to raise taxes, ATR recommends that state lawmakers consider the following policy proposals and proactive reforms as way to stoke economic growth. In addition to stimulating economic growth, ATR’s post-pandemic policy recommendations, if adopted, would help businesses and workers recover following the lifting of state lockdown orders.   

Proactive, Pro-Growth Post-Pandemic Policy Recommendations

1) Exempt forgiven PPP loans from state taxation. 

2) Defer or extend deferral of property and excises tax payments, particularly for businesses in the hardest hit sectors. 

3) Bag taxes and bans should be repealed. Grocery store employees have been on the front lines in the fight against the spread of the novel coronavirus. These critical and vulnerable workers shouldn’t be forced to handle reusable shopping bags that scientific researchers have found can act as Petri dishes for bacteria and carriers of harmful pathogens. Yet that is the result of well-meaning but misguided laws on the books in states and localities across the U.S. 

The eight states where lawmakers have imposed plastic bag prohibitions are California, Connecticut, Delaware, Hawaii, Maine, New York, Oregon and Vermont, according the National Conference of State Legislatures. Six of those statewide bag bans were enacted as recently as 2019. Hundreds of cities, towns, and counties have also imposed a bag ban or tax. All of these laws seek to force or encourage the use of reusable shopping bags, which pose a public health risk at any time and especially during the current pandemic. 

Many bag taxes and bans have been suspended during the pandemic, even in blue states. Even after the pandemic is passed, legislators should move to permanently repeal statewide bag taxes and bans where they exist, in addition to preempting local bag taxes and bans. 

4) Consider tax limitation measures like Texas’s 3.5% property tax rollback rate, which prevents property tax revenues from growing in excess of 3.5% annually. Just this week this taxpayer protection measure put a stop to an effort in Dallas to raise property tax revenue by more than 8%. 

  • In addition to the Texas property tax rollback rate, which was lowered last year from 8% to 3.5%, California’s Prop. 13 property tax cap is another effective way to protect taxpayers from unaffordable increases in property tax bills. In addition to subjecting all tax hikes to a 2/3rds legislative supermajority vote, Prop. 13, approved by California voters 1978, also limits annual increases in the taxable value of a property, both personal and commercial, to the inflation rate or 2%, whichever is less. Transferred properties are reassessed at 1% of their sale price.
  • Colorado’s Taxpayer Bill of Right (TABOR) is another tax and spending limitation measure that other states should considering adopting. TABOR caps the growth in state spending at the combined rate of population growth and inflation. TABOR also subjects all tax hikes to voter approval, protecting taxpayers against not just property tax hikes, but all tax increases. In addition to raising the bar to enact a tax increase, any state that enacts TABOR will be in a better position to weather any future recession or depression.


5) Another reform for lawmakers to consider is Truth in Taxation, which has proven effective at keeping property tax rates down, largely through public accountability. One of the great challenges of property tax reform is that local officials will still raise taxes following reform, and voters often are not aware. 

  • Truth in Taxation ensures that citizens know when votes to increase property taxes are happening through multiple notifications. 
  • The policy accomplishes a very challenging goal: getting the public engaged. Since tax hikes are not popular, few are approved when the public is engaged. Utah’s Truth in Taxation also automatically reduces rates to compensate for rising valuations, so the tax burden does not automatically increase without government action. It’s never a good idea to have a tax hike on auto-pilot. 


6) Enact tort reform limiting the legal liability of businesses when it comes to COVID-19-related lawsuits. It will be impossible for the economy to fully recover if businesses have to worry about being sued by trial lawyers over COVID-19-related accusations. 

State legislators can also expand access to health care and reduce consumer inconvenience through expansion of vaccine and testing administration authority. As pharmacists and dental care providers work to rebuild their businesses following the lifting of emergency state restrictions, expect more governors and state lawmakers to consider a reform recently enacted in one state that empowers dental providers to administer COVID-19 diagnostic and antibody testing.  

A pandemic relief bill approved with bipartisan support in the North Carolina General Assembly in early May includes a novel provision, one that allows dentists to administer COVID-19 diagnostic and antibody testing. This, along with legislation that permit pharmacists to administer more vaccines, are reforms that help not only with response to the current pandemic, but are good ideas that will expand access to and reduce the cost of care moving forward. 

Permanent Codification of Certain Emergency Deregulatory Actions

In response to the pandemic and the unique challenges it presents, nearly 600 deregulatory actions have been implemented at the federal and state levels.Many of these deregulatory actions are beneficial even beyond the pandemic and should be continued in perpetuity. 

Congressman Chip Roy (R-Texas) has introduced federal legislation that would continue the deregulatory actions ordered by the Trump administration in response to the pandemic. Likewise, legislative codification of many emergency actions issued by governors in response to the pandemic is something state legislators should pursue as they return to state capitols in the coming weeks and months. 

It’s clear that many of these regulations that have been suspended by emergency order were never needed to begin with and often served predominantly protectionist, anti-consumer purposes. The following is a rundown of deregulatory actions ordered by governors since March that state legislators should look to enshrine into law moving forward: 

There is great need for lawmakers to repeal Certificate of Need laws. 35 states impose Certificate of Need (CON) regulations, many of which have been temporarily suspended by gubernatorial executive order, by governors from both parties. 

Thanks to an executive order issued by Governor Andrew Cuomo (D-N.Y.) to waive the Empire State’s CON regulations, for example, hospitals no longer need to request the state’s approval before changing their physical plants in various ways, such as temporarily increasing their bed capacity. Similar orders have been issued by governors in ConnecticutMichiganVirginia, and more than a dozen other states. State legislator would do well to codify the permanent repeal of these CON laws. Doing so will help expand access to health care and reduce patient costs.  

7) Expand access to and utilization of telemedicine. At least 10 governors, including Govs. Chris Sununu (R-N.H.) and John Bel Edwards (D-La.), have issued orders expanding the use of telemedicine during COVID-19. Expansion of telemedicine has alleviated the burden on hospital and other medical facilities, while also reducing the number of coronavirus cases that would have otherwise been contracted or spread in a doctor’s office or hospital.

Telemedicine is also making health care more accessible to patients, particularly for those in rural areas or who need specialists, as the nearest provider may be several hours away. Decades after the invention of the phone and the internet, one should not have to trudge down to the doctor’s office to ask a question. Legislators should consider lasting codification of emergency actions that temporary expanded access to telemedicine. 

8) Allow medical professionals to practice across state lines. Despite the fact that those licensed to practice in one state are just as capable as those licensed to practice in another, state laws make it very difficult for them to help out in areas that may be more overwhelmed by COVID-19. To address this problem, a number of governors have called for some form of licensing reciprocity.

Govs. Ron DeSantis (R-Fla.) & Jared Polis (D-Colo.), for example, are letting certain health-care professionals, those who are in good standing in other states where they are licensed, temporarily practice in Florida and Colorado. This approach is slightly different from legislation that was approved by the Florida legislature last year, which allows medical professionals licensed to practice in other states to provide telemedicine services in Florida without a Florida license.

A driver’s license is good in all states. Professional sports players do not need to prove in every state that they can play baseball or football or basketball. Why do medical professionals need a license in every state?

The time is ripe for Occupational Licensing Reform. The pandemic has shined a bright light on occupational licensing rules that restrict peoples’ ability to work and to do so across state lines. Hard hit states have waived rules so out-of-state health care workers can cross state lines to treat patients. Some states have also relaxed hour and testing requirements so retired physicians can pitch in and nursing students can more easily obtain their initial license. These pandemic-driven deregulatory actions show the questionable necessity of many state licensing restrictions, and will spark permanent reform in some places.

9) Universal occupational license recognition (or reciprocity), an example of such a reform, is a policy that allows someone who has earned a license in one state, and has kept it in good standing, to work in another state without having to go through training and certification all over again. If nurses can safely go from one state to another, surely barbers, and landscapers can as well. Arizona and a handful of other states have passed legislation along these lines. Others states are now looking to follow suit, and Iowa just became the most recent to do so. 

In mid-June the Iowa legislature passed Representative Shannon Lundgren’s (R) House File 2627 sending it to Governor Kim Reynolds (R) to sign. This makes Iowa the seventh state to pass a universal license recognition bill. Once implemented, HF 2627 will allow new Iowans to use the training and skills they already have without additional red tape. 

Iowa’s bill also waives initial licensing fees for any first-time applicants from families that earn less than 200 percent of the federal poverty level and applies criminal justice reforms to the licensure process, creating a uniform standard of review for those who have their licensed denied based on conviction history. These important provisions will make it easier for low-income households and the formerly incarcerated to get jobs and provide for their families. 

“We all know heavy regulations serve as a red tape tax that impacts Iowa’s working class,” said Chris Ingstad, president of Iowans for Tax Relief. “Occupational licensing laws make it more difficult and more expensive for Iowans to earn a living and fill high-demand jobs. The changes passed by the legislature in House File 2627 put Iowans ahead of the special interests.”

Arizona, Montana, Pennsylvania, Utah, and Idaho have also enacted a version of universal license recognition. Earlier this year Missouri legislature sent Representative Derek Grier’s (R) univeral recognition bill, House Bill 2046, to Governor Mike Parson (R), who is expected to sign it into law. 

10) A sunset review process is a great way to shift the burden of proof from workers, who are trying to earn a living, to the licensing boards. State lawmakers and governors should take a hard look at all of their existing licenses and question whether the training requirements, and the license itself is truly necessary to protect public safety. A policy like Ohio’s recently-enacted sunset review process requires boards to show their licenses are needed to protect public safety. The legislature is proactively reviewing all of the state’s licenses, about one-third are considered at a time. Even better, state licensing boards sunset if not renewed by the legislature within six years.

11) Remove pointless, counterproductive “Scope of Practice” restrictions. “Scope of practice” refers to the activities a practitioner is legally authorized to engage in. These laws often are nothing more than a way to shut out competition in the medical field by preventing certain providers from practicing at their full capacity.

Advanced Practice Registered Nurses (APRNs) and Physician’s Assistants (PAs), for example, are often restricted in their ability to practice by state laws that require them to have collaborative agreements in place with physicians.

APRNs and PAs are highly educated, thoroughly trained medical professionals who can examine, diagnose, and treat injuries and illnesses. They can also prescribe medication and be primary care providers. Yet, in many states, unless they have a collaborative agreement – a permission slip from a doctor, APRNs and PAs are not allowed to practice or have limited ability to practice. This ultimately hurts patients, who are left with fewer options, less access to care, and higher costs.States should remove these pointless barriers and allow APRNs and PAs to utilize the full scope of their education and training.  

Removing unnecessary barriers to the sale of alcohol is a great way to raise revenue without raising taxes. State and local governments across the nation impose a number of regulations on the sale of spirits, wine, and beer. Unfortunately, many of the restrictions in place have nothing to do with public safety concerns but instead have everything to do with protecting politically well-connected entities from competition. As a result of these protectionist regulations, several states have knee-capped industry expansion and economic growth.

However, in response to the Covid-19 pandemic, state lawmakers and governors have temporarily lifted these restrictions in order to mitigate the economic hardship that has befallen restaurants, breweries, distillers, etc. Not only will these de-regulatory efforts help soften the economic blow on businesses, but they will also enable states to reap additional revenue through expansion of commerce and economic growth, not by raising taxes.

Rather than pile a new round of state level tax increases in response to the pandemic-driven drop in state and local tax collections, state lawmakers should instead generate revenue by making the following de-regulatory actions permanent:

12) Legalize the direct shipment of alcohol to consumers.

  • Lawmakers should consider enacting legislation that allows spirits, beer, and wine producers to ship directly to consumers like Kentucky House Bill 415, which started out as a temporary deregulatory effort but has since become law. This deregulatory action will help the Bluegrass State’s bourbon industry keep humming as well as, prove to be an economic boon for the state in the future.
  • As of the start of 2020, the District of Columbia, Arizona, Florida, Hawaii, Nebraska and New Hampshire, permit the direct shipment of spirits. Eight states permit the direct shipment of beer and wine: Delaware, Massachusetts, Montana, North Dakota, Ohio, Oregon, Vermont and Virginia. The rest of the states only allow direct shipments of wine.


13) Permit restaurants and distillers to sell beer, cocktails, wine, and spirits to-go and for delivery.

  • Lawmakers should consider allowing the delivery and sale of alcohol to-go like Gov. Gregg Abbott’s (R- Texas) waiver permits in the Lone Star State. Governor Abbott’s order, and similar orders issued by other governors, allow restaurants to sell beer, wine, or mixed drinks for delivery and pick-up orders as long as the order is accompanied by food purchased from the restaurant. As Texas reopens, Gov. Abbott is allowing alcohol-to-go sales to continue and said in a tweet that, Texas may just let this keep on going forever. Other states should consider that approach.
  • Virginia, New York, Maryland, California, Illinois, Colorado, Colorado, Atlanta, Kentucky, and Washington, D.C. are a few other states that have also eased restrictions to expand access to alcohol via restaurant delivery and to-go orders. Legislators should pass legislation to codify this new liberty on an ongoing basis. The food and beverage industry has been hit hard in the recent pandemic.
  • Permitting to-go and delivery sales of alcohol is a great way for lawmakers to help businesses by getting government out of their way.


14) Modernize prohibition-era liquor laws by allowing grocery stores, convenience stores, and big-box retailers to acquire liquor licenses. 

  • Voters have consistently supported expanding liquor licensing laws. Take for instance, voter-approved Oklahoma’s state question 792, which allows convenience, grocery, and drug stores to sell and refrigerate beer up to 8.99 percent alcohol and wine up to 14.99 percent alcohol. SQ 792 passed by a 30 point margin. Allowing more businesses to sell beer, wine, and spirits is a fantastic way to increase tax collections without raising taxes, all while making life more convenient for constituents.