Economic Prosperity
The State Government Leadership Foundation is committed to educating decision makers on how economic prosperity is best achieved and fostered. The State Government Leadership Foundation is committed to supporting policies that provide for less and more efficient government, which ultimately allows for the competitive environment and outstanding entrepreneurship that keeps the American economy strong, state by state.
The SGLF further believes that economic prosperity goes hand and hand with lowering the tax burden, while simultaneously lowering government spending. We believe this decreased tax burden will not only help America’s families, but will also help in America’s road to economic recovery. The SGLF also supports lower government spending at the state level. We support policies that aim to hold governments responsible for their spending habits.
Free market principles work best in our economy and help foster the entrepreneurial spirit that America is known for. By eliminating harmful and burdensome government red tape and by decreasing taxes and limiting spending, American businesses will be able to flourish.
Jobs
- Although technically out of a recession, the United States is still experiencing a terrible economic downturn. National unemployment continues to hover around 9% and states across the country are seeing companies and jobs flee to other locations, leaving behind a trail of economically depressed cities and unemployed residents.
- State leaders need to look for ways to incentivize businesses to open or relocate in their state. States that best do this have decreased government regulations, lower business taxes, tax incentives, and other economic development programs designed to stimulate growth.
Taxes, Spending, & Budgeting
- The ballooning cost of government has been forcing legislators to consider tax increases in order to balance their budgets. The SGLF supports making government leaner and more efficient in order to avoid tax and fee increases. Families have had to make difficult decisions on how to save money in this economic downturn, and governments need to do the same. Belt tightening is also good for future fiscal policy, and helps states be proactive rather than reactive.
- Spending too much is not an excuse for raising taxes. In order to stay true to prudent fiscal policy, states must reign in government spending instead of asking citizens to continue dishing out more of their hard-earned money, especially during these difficult economic times.
- Rainy Day Funds, much like savings accounts, are also wise financial reserves to have in case of emergencies.
- As was the case in many states once federal stimulus money was handed out, recurring expenses should not be funded with one-time revenue sources. Once that money dries up, the recurring expense is still present, and creates an even bigger issue on how to fund it in the future.
- Identifying cost saving in all areas of the budget will serve as a responsible budget strategy as well as not allowing any area of the budget to remain immune from cuts, especially in these economic conditions.
Additional Resources
Enterprising States Executive Summary
Enterprising States Report
U.S. Bureau of Labor and Statistics: Databases, Tables, and Calculators
MarginalRevolution.com
Greg Mankiw's Blog: Random Observations for Students of Economics
Keith Hennessey's Blog
Congressional Budget Office: Employment and Labor Market Statistics
Regulation
- Studies show that overall Americans are wary of government regulation on businesses. A Pew Research Center study conducted in 2009 asked whether or not surveyors thought regulation of business usually does more harm than good, and a majority of respondents agreed that regulation normally does more harm than good. Although their opinions may vary after drastic current events such as the recent financial crisis, in general Americans are wary about the effects of government regulations.
News & Articles
Joint Finance Budget Reduces Taxes and Fees by $677 Million
The 2013-2015 state budget passed by the Joint Committee on Finance
(JFC) last week will reduce taxes and fees on Wisconsinites by $677 million
according to a new memo from the non-partisan Legislative Fiscal Bureau (LFB). Net taxes in the state will decrease by $684.9 million, a majority of
which comes from Rep. Dale Kooyenga's (R-Brookfield) income tax cut. The income
tax cut will provide $647.9 million in total tax relief. The Committee
increased Governor Scott Walker's income tax cut by more than $300 million. The income tax cut passed by JFC will decrease rates for all brackets,
reduce the amount of brackets from five to four, and change or delete about 20
tax credits.
On top of the income tax cut, the JFC budget will provide $30 million for a private school tuition tax credit, $8.5 million for individuals to carry forward operating loss deductions on their taxes up to 20 years, and $5.5 million to expand the veterans and surviving spouses tax credit. The Committee's budget also reduces taxes on small businesses by eliminating the economic development surcharge on farms, partnerships, and individuals, which will provide $16 million in tax relief.
ND leads nation in economic growth
BISMARCK – For the third straight year, North Dakota’s economy has
outpaced all other states, a report from the U.S. Bureau of Economic Analysis
shows. North Dakota’s gross domestic product, which measures total economic
production, increased to $38.7 billion in 2012, a 13.4 percent jump from 2011,
the report stated. Texas had the second-largest jump, with a growth rate of 4.8 percent. The country’s average GDP growth rate was 2.5 percent in 2012.
“Our strong business climate, North Dakota’s skilled and dedicated
workforce and the innovation created by the state’s small businesses continue
to power our economic growth,” Gov. Jack Dalrymple said in a statement. “Moving forward, we will continue to support economic growth through
low taxes, a sensible and effective regulatory environment and a state
government that is responsive to the needs of business and job development,” he
said.
Mississippi economy grew 2.4 percent in 2012
JACKSON — With manufacturing on the rebound, Mississippi’s economy grew
by 2.4 percent in 2012, new figures show. Gross domestic product numbers released Thursday by the federal Bureau
of Economic Analysis try to measure all of the economic output of each state.
They look at all the money that businesses, private individuals and governments
spend on goods and services. Investment and foreign trade are also included in
the totals. Mississippi’s 2012 growth rate was close to the national average of 2.5
percent, and ranked 17th among the 50 states. That was a marked improvement
from 2011, when Mississippi’s economy shrank by 1.1 percent, one of only five
states to contract.
"2012 was a better year than 2011,” said state economist Darrin Webb. “We began to see some pretty significant growth in 2012 for the first time since the recession.” The BEA revised the 2011 data downward from the original reading of a 0.8 percent contraction, indicating that the economy was in worse shape that it appeared at first. Webb emphasized that the 2012 numbers are preliminary and could also change. Mississippi’s economy totaled more than $100 billion for the first time. It remained 0.7 percent of the total U.S. economy of $15.6 trillion.
Gov. Scott signs mortgage-relief law
TALLAHASSEE -- Florida Gov. Rick Scott signed a bill Tuesday that will distribute $200 million in mortgage relief and vowed the new law would hold banks accountable so homeowners are better shielded from foreclosure abuses. “Banks will now be held accountable and Florida families will be protected with new protections for homeowners,’” Scott said while flanked by Attorney General Pam Bondi and state housing officials. Yet as Scott signed SB 1852 into law, questions are emerging about whether the banks who signed the deal are complying with the agreement, the latest setback in a relief package already delayed by months of negotiations.
“I’ve had issues with the banks,” Bondi told reporters. “I was on the phone Friday or Saturday with (Shaun Donovan, the secretary of U.S. Department of Housing Development) telling him personal stories of people I’ve had contact with, who have had problems ... I’m telling him first-hand stories that I’m hearing with various banks.” Attorneys general in North Carolina, Illinois and New York have said that the banks aren’t complying with the agreement. Bondi’s office said that it has received 293 complaints of possible violations of the agreement and is reviewing each one. But unlike attorneys general in other states, particularly New York Attorney General Eric Schneiderman, Bondi stopped short of threatening more legal action. Schneiderman has threatened to sue Wells Fargo and Bank of America because he’s concerned they are purposely delaying processing homeowner requests for lower mortgage payments.
BP Plans $1 Billion Investment in Alaska as State Lowers Taxes
BP Plc (BP/) will add $1 billion to Alaska investment after the state
changed its oil tax policy in April. Europe’s second-biggest oil company will increase drilling, upgrade
activities and add 200 jobs in the state, BP said in a statement today. The
London-based company will also start evaluating an additional $3 billion in new
development projects with companies.
Alaska Governor Sean Parnell and the state legislature lowered effective oil tax rates with a bill passed April 16. The state now taxes profits at a flat 35 percent and eliminated a system in which taxes rose as high as 75 percent when oil prices went up. “With this new tax law, the Alaska legislature and Governor Parnell have taken an important step toward improving Alaska’s long-term economic future,” said Janet Weiss, head of BP in Alaska. “Our announcement today should make abundantly clear that BP is committed to being a part of that future.” BP-operated fields account for two-thirds of Alaska’s production and include Prudhoe Bay, the largest oilfield in North America, BP said. The company employs 2,300 people in the state.
Senate expected to vote today on $44 billion state budget
Hartford — The state Senate is expected to vote today on the $44
billion, two-year state budget that the House of Representatives passed early
Sunday morning.
"As our economy continues to recover, it is critical that we
balance our state budget with no new taxes, maximize Connecticut taxpayer
dollars that come back from Washington, avoid cuts to our cities and towns, and
maintain the safety net for our most vulnerable residents — this budget
accomplishes all of these important goals," House Speaker Brendan Sharkey,
D-Hamden, said after the House spent the weekend on the budget before passing
it about 5:15 a.m. Sunday by a vote of 95-48. Much of the state funds for cities and towns that Gov. Dannel P. Malloy
had proposed cutting or shifting from operational funds to education funds over
the next two years were restored.
"The new state budget is a clear win for towns and cities and
their local property taxpayers," said Jim Finley, executive director and
CEO of the Connecticut Conferences of Municipalities.
The two-year budget includes some new revenue sources such as expanding
keno and continues some temporary taxes.
Senate approves $25 billion state budget
BATON ROUGE — The Louisiana Senate backed a $25 billion state budget
proposal Saturday that is sharply at odds with spending plans sought by the
House, which could complicate attempts to wrap up work before the legislative
session ends in a few days. The 2013-14 budget approved by the Senate in a 37-1
vote would cover programs and services for the fiscal year that begins July 1. Senators heavily rewrote the spending proposal passed by the House,
removing many cuts sought by conservative House Republicans and restoring some
patchwork financing the House stripped. Finance Committee Chairman Jack Donahue
said senators thought cuts proposed by the House were too deep and could hurt
public colleges and health care. House members said they were disappointed and
unhappy with many of the changes.
Surpluses Help, but Fiscal Woes for States Go On
Written by MICHAEL COOPER and MARY WILLIAMS WALSH for The New York Times on May 31, 2013Economic Prosperity
While the fiscal picture is brightening around the country, with many
states expecting surpluses this year after years of deficits and wrenching
budget crises, mounting Medicaid costs and underfunded retirement promises are
continuing to cloud their long-term outlook.
And some of the surpluses that are materializing, as welcome as they
are, are not as robust as they appear at first glance — especially as bills
come due for some of the costs that states put off during the long economic
downturn. When Texas lawmakers went into session in January, they were met with
some good news: the state was projecting an $8.8 billion surplus when its
two-year budget cycle ends in August. But it turned out that much of that extra
money was already spoken for: more than half of it had to be used to pay
Medicaid costs the state had delayed paying earlier. And Texas, like many states, has not been fully funding its pensions.
Last year the state contributed just 49.2 percent of what actuaries said was
needed by the state workers’ pension fund. Eventually the remaining money,
around $358 million, will still have to be put into the fund, along with the 8
percent investment return the fund is supposed to earn each year.
Mississippi among 'rich states' in new economic report
Mississippi moves up to No. 10 in nation in economic outlook report
BILOXI -- When Gov. Phil Bryant came to Biloxi on Thursday to announce
a $15 million grant for a new baseball stadium, he also said Mississippi had
just been listed among the states with the best economic outlook by the
American Legislative Exchange Council. "This year, for 2013, we're in the
top 10," he said. The state's No. 10 ranking is up from No. 15 in 2012 and
No. 19 in 2011.
The report puts Utah at the top of the list and Vermont at the bottom,
and ties lower taxes and limited government to economic success. "With
Congress locked in perpetual gridlock and the U.S. economy stuck in a
lackluster recovery, state governments around the country are seeking their own
solutions to the country's economic woes," the Council's Executive Summary
said.
Authors Arthur Laffer, Stephen Moore and Jonathan Williams said states are taking different paths to prosperity. "Some have seen magnificent success in achieving real economic recovery while others continue to struggle," the report said. U.S. Sen. Roger Wicker, R-Miss., said he's been on an economic-development tour of the state to showcase defense contracting in the Pine Belt; aerospace development in the Golden Triangle; education development at the University of Southern Mississippi; and the health industry in Hattiesburg. He called the baseball stadium "diversification of tourism" for Biloxi and South Mississippi.
Authors Arthur Laffer, Stephen Moore and Jonathan Williams said states are taking different paths to prosperity. "Some have seen magnificent success in achieving real economic recovery while others continue to struggle," the report said. U.S. Sen. Roger Wicker, R-Miss., said he's been on an economic-development tour of the state to showcase defense contracting in the Pine Belt; aerospace development in the Golden Triangle; education development at the University of Southern Mississippi; and the health industry in Hattiesburg. He called the baseball stadium "diversification of tourism" for Biloxi and South Mississippi.
Ohio Senate Releases Its Version of State Budget
COLUMBUS, Ohio (AP) – State senators on Tuesday pulled what’s left of
Republican Gov. John Kasich’s proposed income tax cut from the state budget in
favor of tax relief targeted at small businesses. The move by the GOP-led Ohio Senate Finance Committee came as a
political blow to Kasich, who pledged to reduce the statewide income tax if
elected. The Ohio House had retained 7 percent of the 20 percent permanent
income tax cut originally proposed by Kasich. It was among dozens of changes
the Senate is making to the House budget bill. Senate President Keith Faber, a Celina Republican, said income tax
relief will continue to be debated as budget deliberations progress.
Rather than embrace the broader income tax cut, the Senate chose to restore a small business benefit also proposed by Kasich. That proposal would allow individuals to deduct up to $375,000 in net annual business income for income tax purposes. The Senate tax break is worth roughly $1.4 billion, compared with the roughly $1.5 billion price tag for the House’s income tax plan. Asked why the Senate’s tax cut was better than the House’s plan, Faber said, “Because it’s about creating jobs and growing the state’s economy.”
Rather than embrace the broader income tax cut, the Senate chose to restore a small business benefit also proposed by Kasich. That proposal would allow individuals to deduct up to $375,000 in net annual business income for income tax purposes. The Senate tax break is worth roughly $1.4 billion, compared with the roughly $1.5 billion price tag for the House’s income tax plan. Asked why the Senate’s tax cut was better than the House’s plan, Faber said, “Because it’s about creating jobs and growing the state’s economy.”
NM economic development official says tax package approved by lawmakers saved jobs
SANTA FE, New Mexico — A massive tax package passed by lawmakers in the
final days of the legislative session is having a positive effect on jobs, the
head of the New Mexico Economic Development Department told lawmakers this
week. Secretary Jon Barela said that in addition to saving roughly 1,500
jobs, about 200 jobs are expected to be created in the next several months in
response to the tax package. Barela made the comments Friday during a legislative hearing in Santa
Fe as debate over the measure simmers. "We need to get competitive from a tax standpoint," he told
the Albuquerque Journal following the hearing before the Legislative Finance
Committee. Barela declined to name the businesses that might have left New Mexico
if the tax package were not enacted.
Sen. Jacob Candelaria, D-Albuquerque, said he's skeptical of the job retention claims. "I don't think that making public policy based on threats is a good thing to do," he said. The legislation will gradually trim the state's corporate income tax rate from 7.6 percent to 5.9 percent and will phase out the "hold harmless" payments the state currently makes to cities and counties. It also included an expansion of the film tax credit for qualifying television shows filmed in New Mexico.
Sen. Jacob Candelaria, D-Albuquerque, said he's skeptical of the job retention claims. "I don't think that making public policy based on threats is a good thing to do," he said. The legislation will gradually trim the state's corporate income tax rate from 7.6 percent to 5.9 percent and will phase out the "hold harmless" payments the state currently makes to cities and counties. It also included an expansion of the film tax credit for qualifying television shows filmed in New Mexico.
Georgia's jobless rate drops to 8.2 percent
ATLANTA (AP) — State labor officials say Georgia's seasonally adjusted
unemployment rate has dropped to 8.2 percent in April. That's down from 8.4
percent in March, and 9.1 percent a year ago. The Georgia Department of Labor
announced the new numbers Thursday morning. State Labor Commissioner Mark
Butler said Georgia's unemployment rate is now the lowest it has been since
December 2008. He said Georgia employers created more than 31,000 jobs in
April.
Virginia revenues up 2.2 percent in April
State revenue rose 2.2 percent in April compared with April 2012,
according to figures released by the McDonnell administration. On a fiscal year-to-date basis, total collections rose 4.1 percent
through April, ahead of the annual forecast of 3.6 percent growth.
Adjusting for the accelerated sales tax program, total revenue grew 3.8
percent through April, ahead of the adjusted forecast of 3.4 percent growth.
Over the next two months, the state must collect $3.6 billion to meet the fiscal year estimate. Last year $3.5 billion was collected in the May and June span. State officials say April is a significant month for collecting revenue. In addition to regular collections of withholding and sales taxes, final payments for tax year 2012 and the first estimated payment for tax year 2013 were due from corporations on April 15.
Over the next two months, the state must collect $3.6 billion to meet the fiscal year estimate. Last year $3.5 billion was collected in the May and June span. State officials say April is a significant month for collecting revenue. In addition to regular collections of withholding and sales taxes, final payments for tax year 2012 and the first estimated payment for tax year 2013 were due from corporations on April 15.
RI House panel to consider proposed manufacturing jobs incentive program
PROVIDENCE, R.I. - The House Finance Committee will consider Chairman Helio Melo's bill creating a new incentive program for local manufacturers at a Thursday hearing.
The proposed "Manufacturing Industry Revitalization Act" is a key piece of House Speaker Gordon D. Fox and Democrats' economic development package. Under the proposal, companies would have to invest at least $10 million in real estate, building, equipment or other capital purchases and create at least 100 new full-time jobs in order to qualify. They would receive an annual reimbursement of $500 per each new worker, so long as the positions earn at least 200 percent of the state minimum wage and work a minimum of 30 hours a week.
Electric Boat, a submarine maker with a manufacturing facility at Quonset Point in North Kingstown, has said it is supportive of the measure, even though it is not expected to testify Thursday. "We support this bill based on the effect it would have on our efforts to control costs for our customer, the United States Navy, as well as the effect it would have on economic development and job creation in Rhode Island," Robert A. Hamilton, Electric Boat's communications director, said in a statement.
Electric Boat, a submarine maker with a manufacturing facility at Quonset Point in North Kingstown, has said it is supportive of the measure, even though it is not expected to testify Thursday. "We support this bill based on the effect it would have on our efforts to control costs for our customer, the United States Navy, as well as the effect it would have on economic development and job creation in Rhode Island," Robert A. Hamilton, Electric Boat's communications director, said in a statement.
Budget deal cuts some Louisiana tax exemptions by $329 million, calls for $106 million in cuts
A $329 million cut in two dozen tax exemptions and a $106 million reduction in spending feature prominently in a bipartisan deal to strip $525 million in one-time money from Louisiana's budget. The plan would use about half the money taken out of the $24.7 billion budget to fund non-recurring expenses in state government, including road construction, coastal protection and paying down the debt in the state's pension system. The details of the proposal, which were circulated to members of the media after Republicans and Democrats separately caucused on the plan, lay out a plan that would boost state revenues by shrinking state tax credits by 15 percent and rely on a increase in existing projections of state tax revenue to balance the budget. The plan would also cut the amount retailers receive for collecting sales taxes and cut other deductions and exemptions.
The $100 million in state budget cuts would come from specific areas: about $9.4 million would be saved by curtailing out-of-state travel for conferences and a reduction in spending on office supplies; $18.6 million would be taken out of the budget for positions that are now vacant; $25.3 million would come from a 10 percent reduction in state contracts and about $52.4 million would come from new spending proposed in the governor's budget above what was spent in the current year.
The $100 million in state budget cuts would come from specific areas: about $9.4 million would be saved by curtailing out-of-state travel for conferences and a reduction in spending on office supplies; $18.6 million would be taken out of the budget for positions that are now vacant; $25.3 million would come from a 10 percent reduction in state contracts and about $52.4 million would come from new spending proposed in the governor's budget above what was spent in the current year.
Senate plan would expand sales tax, lower North Carolina rates
RALEIGH — Senate Republicans rolled out Monday evening the frame of their tax overhaul plan for North Carolina that they say will cut income tax rates while expanding the scope of the sales tax. Senate leader Phil Berger, a Rockingham County attorney, announced the release of a video and website in which he lays out some of the highlights of the plan. The video was designed as a preview as Berger and leaders of the chamber’s tax committee scheduled a news conference today to talk more about the details.
The unveiling of the chamber’s plan is a key moment in this year’s session because House and Senate Republican leaders and new GOP Gov. Pat McCrory have made tax reform a leading priority. Berger labeled the “North Carolina Tax Fairness Act of 2013” as the “largest tax cut in state history” at more than $1 billion. But expanding the sales tax will mean many residents would have to pay more in sales taxes. Democratic lawmakers and governors have talked over the past two decades about reworking the tax code to capture more consumer transactions and services while lowering income tax rates. But their efforts failed because they couldn’t work out details or interest groups put up roadblocks. Berger said he’s committed to making changes.
The unveiling of the chamber’s plan is a key moment in this year’s session because House and Senate Republican leaders and new GOP Gov. Pat McCrory have made tax reform a leading priority. Berger labeled the “North Carolina Tax Fairness Act of 2013” as the “largest tax cut in state history” at more than $1 billion. But expanding the sales tax will mean many residents would have to pay more in sales taxes. Democratic lawmakers and governors have talked over the past two decades about reworking the tax code to capture more consumer transactions and services while lowering income tax rates. But their efforts failed because they couldn’t work out details or interest groups put up roadblocks. Berger said he’s committed to making changes.
Pa. House passes business tax reform bill
The Pennsylvania House has passed legislation today that cuts business taxes by hundreds of millions of dollars, while increasing revenues by addressing the so-called Delaware loophole. The bill, which was approved by 129-65 bi-partisan vote, would cut the corporate net income tax rate from 10 percent to 7 percent over 10 years beginning in 2015. All midstate Republican House members voted for it, while Harrisburg Democratic Rep. Patty Kim cast a dissenting vote. The measure now goes to the Senate for consideration.
Republicans say it's a way to make the state more competitive, while Democrats are calling it a massive giveaway to big corporations. The Delaware loophole refers to a practice where companies shield revenues from state taxes by setting up a holding company for its intangible assets in a lower tax state, often Delaware.
Republicans say it's a way to make the state more competitive, while Democrats are calling it a massive giveaway to big corporations. The Delaware loophole refers to a practice where companies shield revenues from state taxes by setting up a holding company for its intangible assets in a lower tax state, often Delaware.
Bullock signs main Montana budget bill after line-item vetoes
HELENA – Gov. Steve Bullock signed the Legislature’s main budget bill Friday – but not after first using his line-item veto authority to strike a small portion of the spending. Bullock said in his line-item veto message that he needed to reduce spending. His office said the reductions cut about $30 million, roughly 0.4 percent of the two-year, $8 billion budget. House Bill 2 cleared the Legislature with the backing of minority Democrats and some Republicans. But Bullock said lawmakers did not stick to his goals of a structurally balanced budget that left more money in the bank.
“I asked the Legislature to pass a budget that didn’t spend more than we take in and that left $300 million cash in the bank for a rainy day. Unfortunately, they didn’t,” Bullock said in a statement. “Therefore, I’ve had to veto and line-item veto more bills than I would have liked to, in order to keep the state’s financial position strong.” The line-item veto in the main budget bill did not ax any particularly large programs. One move would strike the 6 percent pay raise that Republican lawmakers gave to game wardens who broke with other union workers and backed Bullock’s Republican opponent.
“I asked the Legislature to pass a budget that didn’t spend more than we take in and that left $300 million cash in the bank for a rainy day. Unfortunately, they didn’t,” Bullock said in a statement. “Therefore, I’ve had to veto and line-item veto more bills than I would have liked to, in order to keep the state’s financial position strong.” The line-item veto in the main budget bill did not ax any particularly large programs. One move would strike the 6 percent pay raise that Republican lawmakers gave to game wardens who broke with other union workers and backed Bullock’s Republican opponent.
Broader Unemployment Rate Ticks Up
This month the number of unemployed dropped by more than 80,000, even as more people entered the labor force. Meanwhile, the number of employed workers jumped by 293,000. The total labor force increased by 210,000, leaving the labor force participation rate unchanged at 63.3%. The steady rate is a positive sign that people are encouraged enough to look for work, and raises hope that more long-term unemployed aren’t just dropping out. But there was an area of concern in the report as a broader rate, known as the “U-6″ for its data classification by the Labor Department, increased to 13.9% from 13.8% a month earlier. That includes everyone in the official rate plus “marginally attached workers” — those who are neither working nor looking for work, but say they want a job and have looked for work recently; and people who are employed part-time for economic reasons, meaning they want full-time work but took a part-time schedule instead because that’s all they could find.
R.I. House leaders outline broad legislative package to spur economic development
PROVIDENCE, R.I. -- House Speaker Gordon D. Fox and other key state representatives unveiled a package of 18 bills Thursday meant to improve Rhode Island's ailing economy by coordinating and streamlining economic development efforts. The measures include creation of an Executive Office of Commerce, to be led by a commerce secretary appointed by the governor. The proposed new office, championed last fall by the Rhode Island Public Expenditure Council, would replace the Rhode Island Economic Development Corporation.
House leaders say they worked for months to craft legislation that could improve the state's economy. Many of the ideas grew out of an economic summit for the entire 75-member House in January. Fox said the bills will ensure that the state has a clear, well-developed plan to encourage business growth. The bills offer incentives to growing businesses and seek to remove barriers that often prevent businesses from succeeding.
House leaders say they worked for months to craft legislation that could improve the state's economy. Many of the ideas grew out of an economic summit for the entire 75-member House in January. Fox said the bills will ensure that the state has a clear, well-developed plan to encourage business growth. The bills offer incentives to growing businesses and seek to remove barriers that often prevent businesses from succeeding.
Mo. House passes bill cutting income tax and raising sales tax
JEFFERSON CITY • Missourians would pay higher sales taxes and lower state income taxes under a bill passed by the House on Wednesday. The sponsor, Rep. Andrew Koenig, R-St. Louis County, said the package of tax changes would help Missouri compete with states like Oklahoma and Kansas, which have reduced their income tax rates. “This bill would move our state forward,” he said. “If we want Missouri to remain competitive we need to reduce our income tax.”
Opponents said the bill would cost state coffers hundreds of millions of dollars, spurring budget cuts when the state is unable to adequately fund public schools and other services now. “I’m pretty sure most Mizzou alums would rather lead than follow any state, especially Kansas,” said Rep. Courtney Curtis, D-Berkeley. The House passed the bill on a vote of 90-68, which was far less than the 109-vote majority needed to override a veto of Democratic Gov. Jay Nixon. The governor has criticized an earlier version of the bill, saying it would favor corporations and hurt working families and seniors on fixed incomes.
Opponents said the bill would cost state coffers hundreds of millions of dollars, spurring budget cuts when the state is unable to adequately fund public schools and other services now. “I’m pretty sure most Mizzou alums would rather lead than follow any state, especially Kansas,” said Rep. Courtney Curtis, D-Berkeley. The House passed the bill on a vote of 90-68, which was far less than the 109-vote majority needed to override a veto of Democratic Gov. Jay Nixon. The governor has criticized an earlier version of the bill, saying it would favor corporations and hurt working families and seniors on fixed incomes.
NC economy improving as key tax collections arrive
RALEIGH, N.C. (AP) -- North Carolina's economy is improving slowly and steadily, the legislature's chief economist said Tuesday, but April revenue figures that are needed to prepare the two-year state budget are more uncertain than in past years due to federal and state tax changes. State government revenues through March, or three-quarters of the fiscal year, are $110 million above the targeted amount needed to carry out the current year's $20.2 billion budget, according to a presentation for House and Senate finance committee members. Income tax collections are 1.5 percent ahead of expectations, while tax collections are below the target by a nearly identical percentage, the report from economist Barry Boardman said.
Boardman held out the possibility of a large swing in either direction as Department of Revenue workers keep opening tax return envelopes. April 15 was the due date for 2012 tax payments and for companies and individuals to make estimated payments for the first three months of 2013. The "April surprise" is important because an unexpected surplus would give legislators more money to spend in the budget now being drawn up for July 1 through mid-2015. A shortfall would mean less money is available. April usually brings in more than $3 billion in tax collections, or twice as much any other month, Boardman said. Boardman told legislators the April 15 collections are particularly volatile this year because of a 2011 law that allows business owners to exempt their first $50,000 of net income from income taxes. He said it's also unclear how much taxpayers shifted their incomes to the 2012 calendar year in December to avoid tax increases and changes approved by Congress in early 2013.
Boardman held out the possibility of a large swing in either direction as Department of Revenue workers keep opening tax return envelopes. April 15 was the due date for 2012 tax payments and for companies and individuals to make estimated payments for the first three months of 2013. The "April surprise" is important because an unexpected surplus would give legislators more money to spend in the budget now being drawn up for July 1 through mid-2015. A shortfall would mean less money is available. April usually brings in more than $3 billion in tax collections, or twice as much any other month, Boardman said. Boardman told legislators the April 15 collections are particularly volatile this year because of a 2011 law that allows business owners to exempt their first $50,000 of net income from income taxes. He said it's also unclear how much taxpayers shifted their incomes to the 2012 calendar year in December to avoid tax increases and changes approved by Congress in early 2013.
Missouri proposes plan to cut business income tax
Kansas Chamber CEO: 'proof-positive' Kansas plan works
Missouri may be headed in the same direction as Kansas, at least when it comes to tax policy. Separate bills passed the Missouri House and Senate that would slash individual income taxes on business income by half over the next five years. Kansas voted last year to exempt nonwage income from single proprietorships, partnerships, limited liability corporations, and S corporations from state income taxes and lower the top tax rate to 4.9 percent.
Missouri Senate Bill 26 would reduce individual income taxes to 5.25 percent by 2018 and increase personal exemption from $2,100 to $4,100 for people with incomes less than $20,000. It also would allow taxpayers to deduct 10 percent of business income in 2014, rising to 50 percent of business income by 2017. Deductions would vary for people who are shareholders in S corporations or are partners in partnerships, based on how much of the corporation or partnership they own.
Missouri Senate Bill 26 would reduce individual income taxes to 5.25 percent by 2018 and increase personal exemption from $2,100 to $4,100 for people with incomes less than $20,000. It also would allow taxpayers to deduct 10 percent of business income in 2014, rising to 50 percent of business income by 2017. Deductions would vary for people who are shareholders in S corporations or are partners in partnerships, based on how much of the corporation or partnership they own.
House passes $45M economic development budget
The Iowa House passed legislation Tuesday funding the state’s economic development functions for the coming year, clearing the way for House-Senate negotiations over that aspect of the budget. The $45 million budget includes funding for the state Economic Development Authority, Workforce Development and the Department of Cultural Affairs, among other programs. That figure, developed by the chamber’s Republican majority, is substantially less than what the Democrat-led Senate approved.
The Senate passed the budget at $78.5 million. Republican leaders called their budget the more fiscally responsible, while noting it still represents a more than 19 percent increase over current spending. “I don’t view this as a budget that’s just terribly constrained,” said Rep. Dave Deyoe, R-Nevada and chairman of the appropriations subcommittee that crafted the budget. “I think we’ve been able to find a way to fund a lot of the programs that really are working well here in the state.” One big difference in the House and Senate versions is an appropriation for incentives under the state’s High Quality Jobs program. Gov. Terry Branstad initially budgeted $19 million, which the Senate dialed back to $18 million. The House version provides no money at all.
The Senate passed the budget at $78.5 million. Republican leaders called their budget the more fiscally responsible, while noting it still represents a more than 19 percent increase over current spending. “I don’t view this as a budget that’s just terribly constrained,” said Rep. Dave Deyoe, R-Nevada and chairman of the appropriations subcommittee that crafted the budget. “I think we’ve been able to find a way to fund a lot of the programs that really are working well here in the state.” One big difference in the House and Senate versions is an appropriation for incentives under the state’s High Quality Jobs program. Gov. Terry Branstad initially budgeted $19 million, which the Senate dialed back to $18 million. The House version provides no money at all.
Oklahoma legislative leaders optimistic about tax cut, workers' comp laws
Gov. Mary Fallin and Republican legislative leaders say they are committed to reducing the personal income tax and overhauling the workers' compensation system.
Last-minute twists and turns have strained feelings, but Republican legislative leaders and the GOP governor say they are on track to reduce Oklahoma's top personal income tax rate and overhaul the workers' compensation system. All say they want to avoid what happened last year: Proposals to reduce the personal income tax and to change a part of the workers' compensation system, both high priorities then as they are now, failed to advance.
The workers' compensation measure, contained in Senate Bill 1062 by Senate President Pro Tem Brian Bingman, R-Sapulpa, and House Bill 2032, which contained an income tax cut proposal by Gov. Mary Fallin and House Speaker T.W. Shannon, R-Lawton, made it through last week's latest legislative deadline. Most bills generated in the House of Representatives had to be heard by Senate committees, and most bills that originated in the Senate had to be heard by House committees by Thursday.
The workers' compensation measure, contained in Senate Bill 1062 by Senate President Pro Tem Brian Bingman, R-Sapulpa, and House Bill 2032, which contained an income tax cut proposal by Gov. Mary Fallin and House Speaker T.W. Shannon, R-Lawton, made it through last week's latest legislative deadline. Most bills generated in the House of Representatives had to be heard by Senate committees, and most bills that originated in the Senate had to be heard by House committees by Thursday.