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07

BPAA State Policy Update - September 7

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TAX

  • Bloomberg Government Reports: California Sends SALT Cap Workaround to Governor: California Gov. Jerry Brown (D) has until Sept. 30 to sign or veto a workaround to the new $10,000 federal cap on state and local tax deductions. It’s unclear which he’ll choose. If he signs it, California would join New York, New Jersey, and Connecticut in adopting laws using state-level charitable contributions to circumvent the new federal cap. But the IRS is proposing to limit the states’ approach. S.B. 539 by Sen. Kevin de Leon (D) would expand an existing college access tax credit that gives taxpayers a 50 percent state tax credit for contributions that ultimately go to a state scholarship program for low-income students. The program has been in place since 2014. California lawmakers passed it in the final hours of the 2018 legislative session. The bill would increase the credit amount to 75 percent and double the annual cap on credits issued to taxpayers from $500 million to $1 billion.
  • Tax Cuts 2.0, Fixing Salt: Several House GOP members from high-tax states weighed in to show their displeasure. “I will not vote for anything that makes the SALT cap permanent,” Representative Peter King of New York said in an interview Tuesday. “Others I have spoken to feel the same way. They are more against it now than they were last November and December.” Representative Frank LoBiondo of New Jersey said he would only look at the tax cut 2.0 legislation “if they fix SALT.” New Jersey has the highest property taxes in the country. Still, most voters have state tax bills that fall under the $10,000 threshold and don’t feel the pain of the provision, according to Representative Randy Hultgren, an Illinois Republican. “It’s tough. I’m in a high-tax state,” Hultgren. “But there are just a few high-tax states.” House Ways and Means Committee Chairman Brady is scheduled to brief members on the legislation Thursday and his panel will start making up the legislation next week.

 

ALCOHOL

  • California: Senator Dodd’s Anti-Drunken Driving Bill Heads to the Governor: A bill from Sen. Bill Dodd, D-Napa, to strengthen California’s efforts to prevent drunken driving was approved by the Legislature today with overwhelming, bipartisan support. “Sadly, drunken-driving crashes, injuries and deaths are too common in California,” Senator Dodd said. “This bill will prevent impaired drivers from getting behind the wheel and make our roads safer.” According to the California Attorney General’s Office, in 2016 there were 125,501 DUI arrests statewide. The CHP reported 35,212 DUI-related accidents and 13,979 injuries that same year, while the National Highway Traffic Safety Administration recorded 1,059 alcohol-impaired-driving deaths in the state. Established in 1990, the Designated Driver Program is funded by a small surcharge paid by alcohol licensees, not taxpayer dollars. The program is administered by the California Highway Patrol to develop and implement new strategies and technologies to combat the problem of driving under the influence. Senate Bill 973 doubles the funding available to the designated driver program by increasing the annual $5 assessment on alcohol licensees to $10 per year. This will enable the CHP to undertake new outreach through social media and to target high impact locations. The bill also authorizes distilled spirits makers to give free or discounted rides. It passed both the Senate and Assembly with overwhelming support and goes next to Gov. Jerry Brown for a signature. Read more here.
  • Oklahoma: Many Oklahoma counties with restricted alcohol hours will go dry on Sundays: The state liquor law, which is set to go into effect in October, will be phasing out some of your favorite drinks at Stack Grill in Kingfisher and, now, employees said it's going to impact Sunday sales. “It will essentially be a dry county on Sundays,” said Scott Osborn, general manager of Stack Grill. The new alcohol law will be pouring in less than a month from now and, with it, low point beer will disappear. As of right now, without 3.2 beer, counties like Kingfisher will be forced to say goodbye to all alcohol sales on Sundays. “People in the county aren't going to be able to buy alcohol anywhere, not at a grocery store, not a convenience store, not a restaurant, not a bar,” Osborn said. Agent Brent Fairchild with the ABLE Commission said it all comes down to individual county rules. “Certain counties, whenever they did their original vote for liquor by the drink, they had a choice in the hours they wanted to set for Sundays and, unfortunately, Kingfisher County is one of those that voted for no alcohol sales on Sundays,” Fairchild said. The original vote, which dates back to 1985, gave Oklahoma counties an option to set the hours for when people can buy alcohol. At that time, low point beer didn't fall under the state liquor laws, but that will all change next month. Read more at KFOR.

LABOR ISSUES

  • Michigan: Legislature passes wage hike, paid sick leave but it's not that simple: State lawmakers, led by Republicans, voted Wednesday to pass two ballot proposals that would raise the minimum wage to $12 an hour and require employers to provide paid sick leave for employees. But the 24-13 vote in the Senate and 78-28 tally in the House of Representatives were not as simple as they seemed. The laws won’t go into effect until March 2019 and it was the intention of the Republicans in the Legislature to approve the proposals to keep them off the Nov. 6 ballot, and then amend the laws after the election. “We’re looking at a whole suite of things that we may think are more friendly to Michigan,” said Senate Majority Leader Arlan Meekhof, R-West Olive. “We’re looking at all the things that would continue Michigan on the economic growth path and some of these things are prohibitive.” So that means the possibility of removing tipped employees from the minimum wage increase, which under the ballot proposal would be phased in through 2024. Some restaurant workers opposed the ballot proposal because they want to continue to get tips while getting paid less than the minimum wage. Another proposal, Meekhof said, would be to get rid of the paid sick leave requirement. “We should have something like family medical leave act,” he said. “The employer and employee should work it out. The government shouldn’t be involved in that.” Read more at Detroit Free Press. 

SPORTS BETTING

  • Kentucky: Bloomberg Government Reports: Pro-Sports Lobbyists Head to Kentucky for Sports Betting Bill Push: Two squads of pro-sports lobbyists have registered in Kentucky, signaling an attempt to influence whether lawmakers put an integrity fee into sports betting bills. The state’s only pre-filed bill doesn’t include an integrity fee, which is a portion of revenue or wagers that would go directly to professional sports leagues. However, July and August registration documents by 14 lobbyists for pro leagues imply the leagues intend to discuss the issue with lawmakers. A group of four lobbyists for the National Football League disclosed that they’d be engaged in lobbying on “any issues related to professional athletics, sports wagering, taxation, or sports game integrity.” Nearby Cincinnati, Ohio, and Nashville, Tenn., have teams, but Kentucky doesn’t have an NFL squad. Likewise, a group of 10 lobbyists for Major League Baseball disclosed that they would engage in lobbying on “any issue relating to professional sports, sport integrity, sports wagering, taxation, or business development.” Lobbyists from the National Basketball Association and the Professional Golfers Association are also setting up shop in the state. However, there is no MLB or NBA franchise in Kentucky. The lobbyists didn’t immediately return requests for comment about what level of fee they’d be seeking, and how they would influence legislators in a state with no league franchise. Leagues have said the fees are necessary to compensate them for enforcing internal policies that bolster the integrity of their sports as well as prevent and root out gambling corruption. So far, an integrity fee hasn’t been passed into law in any state with sports gambling.
  • Oklahoma: Bloomberg Government Reports: Oklahoma Sports Betting Legalization Has Long Road to Finish Line: Those eagerly awaiting legalization of sports betting in Oklahoma may have to hold their bets in 2019, multiple Oklahoma officials told Bloomberg Tax. A flurry of legislation swept across the country following the U.S. Supreme Court’s May ruling in Murphy v. NCAA, which set the playing field for states to legalize sports betting. Oklahoma, though, is only a few plays past kickoff, State Secretary of Native American Affairs Chris Benge told Bloomberg Tax. “We as state leaders have been educating ourselves on what it means and how it might fit with the tribes,” Benge said. “I would expect the larger tribes would want to be involved in sports betting,” he said.
  • New Jersey Update: DraftKings Sportsbook was the first mobile platform to launch on Aug. 1, and it held a monopoly on the market for more than three weeks. The playMGM sports betting app went live on Aug. 22, and the arrival of SugarHouse sportsbooka day later brought the running count to three. A week later, both FanDuel Sportsbook and William Hill joined the online sports betting realm. Caesars followed on Sept. 6, just in the nick of time for NFL season. Casinos and racetracks are permitted to form as many as three online partnerships apiece — and several are in place — but they must have a physical sportsbook first. Eight NJ casinos and racetracks have retail sportsbooks at the moment. Read more at Legal Sports Report.
  • Delaware Update: Delaware Sports Betting: $23 Million In Handle Since Launch: The Delaware Lottery recorded $7.7 million in wagers for the period from July 30 through Aug. 26. (The lottery does not do its accounting on a calendar month basis.) The sportsbooks held just over $700,000 in wagers during that time period. For the short history of Delaware sports betting, the state has handled $22.9 million and has generated just over $2 million in revenue. Of that, about half has gone to state coffers. About two-thirds of all of that has come via Delaware Park ($16.3 million handle, $1.5 million revenue). Dover Downs and Harrington Raceway lag far behind on both fronts. Daily handle clocked in at about $275,000 a day, better than much of July but behind the June numbers right after launch. The numbers come ahead of some of the busiest months for sports betting, as football season for both college and the NFL has begun. There should be a significant uptick in both handle and revenue the next time the lottery releases revenue figures. Read more about the future of Delaware sports betting here.
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