Blog Archives

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New federal tax law spurring state action in the form of legislative mitigation, plaintiff coalitions

In early January, Governing revealed that 25 states are facing budget shortfalls going into 2018, but “[t]hat’s better than the 31 shortfalls [that the government relations firm MultiState] found last January.” The states with high concentrations of oil and natural resource states, mostly in the Midwest and the Northeast, are hardest hit.

The piece noted that for some, like Rhode Island and Vermont, lawmakers should be able to resolve the discrepancies relatively easily. But others, like New York, “may have to consider significant changes to solve their fiscal problems.” New York faces a large deficit, as we described in our piece this week covering Gov. Cuomo’s budget speech.

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California: Governor speaks of persistence against storms

Last week, Gov. Jerry Brown gave his final state of the state speech. Just one sentence in, he asserted, “[s]imply put, California is prospering.” Personal income has grown to $2.4 trillion, from $154 billion in 1975, and 2.8 million new jobs have been created.

In 1975 the governor started the first of two terms that ended in 1984. In 2011, when he began his third term, California faced a $27 billion deficit, and the media disparaged the state without mercy: The New York Times called California “The Coast of Dystopia,” the Wall Street Journal foresaw a “Great California Exodus,” and the Economist of London pronounced the Golden State, “The Ungovernable State,” while Business Insider “simply said: ‘California is Doomed.’”

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New York: Cuomo’s budget speech reflects difficulties and hope

When Gov. Andrew Cuomo gave his state of the state speech on Jan. 3, 2018, he spent much of it lamenting the challenges that New York faces, which, he argued, are made much worse by the federal tax bill that caps the deduction for state and local taxes (the SALT deduction) at $10,000 when not incurred through a trade or business.

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McDonald Hopkins Women’s Council 2017 Year in Review

McDonald Hopkins Women’s Council has a lot planned for 2018. But, before we get too far into the new year and all the exciting events and initiatives ahead, it’s important to look back at all we’ve accomplished.

2017 was a year of growth and change for our Women’s Council. Reinvigorated with new leadership, we focused on cultivating and supporting the strong female leaders at our firm and in our communities. In this report, we’re taking a look at the impact our female attorneys had in 2017 at McDonald Hopkins and beyond.

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Texas: Governor remains committed to pursuing property tax reform

Gov. Greg Abbott made the rounds last week pushing his property tax ideas that establish a revenue growth cap of 2.5 percent per year. This is a continuation of the plan he delivered at last year’s state-of-the-state speech that we described last February, when he said that he wanted to reform the property tax system by imposing a “real revenue cap,” and preventing cities from raising property taxes without voter approval.

To this end, lawmakers considered the Texas Property Tax Reform and Relief Act of 2017, but they did not ultimately enact the measure.

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South Carolina: Governor presents new budget, emphasizes income tax cut plan

Earlier this month, Gov. Henry McMaster unveiled his 2018-19 executive budget. In his announcement, he touted the plan as “a balanced budget that prioritizes taxpayer savings in the form of an income tax cut that, in its first five years of implementation, will result in $2.2 billion of taxpayer savings. All while investing in important areas of need such as public safety, workforce readiness, K-12 education, and access to healthcare.”

Recurring items in the general fund of about $8 billion are these:

  • $ 270.5 million: Revenue growth for fiscal year 2018-19 less General Revenue Fund (GRF), Capital Reserve Fund (CRF) & Tax Relief Trust Fund
  • $ 117.4 million: Excess debt service

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Vermont: First-of-its kind legislation would regulate and tax blockchain, cryptocurrency, and financial technology

Last week, we addressed states’ ongoing interest in legalizing marijuana despite steps that Attorney General Jeff Sessions has taken to prosecute it at the federal level. Vermont is set to be the next state to legalize recreational weed, but the first to do so via legislation, making it a bit of a trailblazer. The tiny jurisdiction is showing its stripes in a different context this week, by considering legislation that would tax blockchain, cryptocurrency, and financial technology.

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United States Supreme Court will hear South Dakota’s case addressing tax obligations of out-of-state retailers

To the delight of the state of South Dakota, the United States Supreme Court accepted its case, South Dakota v. Wayfair, on Jan. 12, 2017. The crux of this lawsuit is the legal permissibility of South Dakota’s spring 2016 law, SB 106, which has a purpose to “provide for the collection of sales taxes from certain remote sellers.” Ultimately, SB-106’s objective is to challenge the U.S. Supreme Court’s 1992 decision in Quill Corp. v. North DakotaQuillbanned states from requiring out-of-state retailers to collect sales taxes on products they ship into those jurisdictions, absent some minimal contact or physical presence.

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Tax revenues from marijuana legalization in jeopardy, but states continue to legalize

According to a Jan. 5, 2018 Pew Research Center survey, as of last October, 61 percent of Americans support the legalization of marijuana. This is up a bit from a year ago, when that figure was 57 percent, but almost double what it was in 2000, 31 percent.

The Pew survey found that support varies widely between different groups. For example, millennials (born between 1980-1994), Gen-Xers (born between 1965-1979), and baby boomers (born between 1946-1964) support legalization at rates of 70 percent, 66 percent and 56 percent respectively. In contrast, 58 percent of the silent generation, those born between mid- 1925 and 1945, oppose legalization, while only 35 percent favor it.

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Illinois: Population continues to decline, eroding tax base

At the end of December, Pew Charitable Trusts reported on new U.S. Census Bureau estimates revealing that between July 2016 and July 2017, eight states lost population; “[i]f the estimates hold up, it would be the first time in 30 years that so many states lost residents in a single year.” The states are Alaska, Hawaii, Illinois, Louisiana, Mississippi, North Dakota, West Virginia and Wyoming.

The December report follows a February 2017 piece pointing to population losses in Connecticut, Illinois, Mississippi, New York, Pennsylvania, Vermont, West Virginia and Wyoming between 2015 and 2016. This puts Illinois, Mississippi, West Virginia and Wyoming as the four states that have seen consistent population declines since 2015.

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