MINIMUM WAGE & PAID LEAVE UPDATE
- Speaker says Connecticut House will vote on paid family leave and minimum wage: Speaker Joe Aresimowicz declared Wednesday that the state House of Representatives will vote on increasing the minimum wage and creating a paid family and medical leave program within the coming weeks. “I’ll put it out there. It is my goal to get a family medical leave act and a minimum wage bill up on the board [for votes] in the next few weeks,” he told reporters at the state Capitol.
- Family Leave: While details have not been finalized, some legislators are pushing for a plan that would charge employees a payroll tax of 0.5 percent to generate money that would be used for the family leave program. The maximum benefit under that plan would be $1,000 a week for 12 weeks. Senate Democrats have declared family leave to be their No. 1 priority of the 2019 session, and lawmakers have been working behind the scenes for months with their colleagues in the House and Gov. Ned Lamont’s office.
- Minimum Wage: In another key issue, lawmakers have clashed for the past two decades over raising the minimum wage, and the battle this year will be over how fast the wage would be increased to $15 per hour. Both Lamont and Democrats are calling for the minimum wage to be boosted in a phased-in process, with Democrats favoring a three-year period and Lamont calling for a four-year process. The current minimum wage in Connecticut is $10.10 per hour, far above the national minimum of $7.25 per hour. Pending issues include the exact timeframe for a phase-in, along with whether any future increases would be pegged to the rate of inflation or another index. Republicans have worked to block hikes in multiple years as they said the timing was not right with the ups and downs of the economy. But Democrats say this is the year to take action.
- Read full article here at the Hartford Courant.
- Forbes reports - Massachusetts And New York Beginning To See The Ugly Side Of Minimum Wage Hikes: Massachusetts, New York, and several other states are beginning to see the ugly side of minimum wage hikes: coffee shop and restaurant store closures, reduced hours of work, and job cuts. Mandated minimum wage hikes have a pretty side and an ugly side, according to economists. The pretty side is the additional money they put in the pockets of those who work for a minimum wage. The ugly side is the payroll tsunami they unleash for smaller businesses, already under stress from soaring healthcare costs and rents. For some of these businesses, the minimum wage hikes tip the balance between staying in business and going out of business. That’s what happened to once iconic Boston restaurant Durgin-Park in Faneuil Hall. It closed the doors after two centuries in operation, as it couldn’t cope with wage and healthcare premium hikes. That’s a great loss for Boston’s living history, a loss for the store owners, and a loss for those who worked there. Apparently, in this case, minimum wage hikes ended up hurting those they were supposed to help.
- For other small businesses, minimum wage hikes have yet to tip the balance between staying in business or going out of business. But they force them to cut employee hours or lay-off employees to cope with the higher payroll. "First, we have to cut overtime," says Chris, a franchise owner in Long Island. "Next, we have to lay people off, if we want to stay in business." Read more at Forbes.
- 1310 KLIX reports - Ballot Initiative To Raise Idaho Minimum Wage Gets Go-Ahead: The Idaho Secretary of State has given the thumbs up to proponents of a ballot initiative to increase the minimum wage. Lawerence Denney announced Wednesday the new initiative may move forward and begin collecting signatures for a 2020 ballot initiative aiming to increase the state's minimum wage. The group, Idahoans for a Fair Wage, now must get signatures of 50,365 registered voters in order to qualify for the ballot, according to the Secretary of State. The signatures must also come from at least 18 legislative districts with at least six percent of registered voters from each of those districts. The group can collect signatures until April 30, 2020 and then must submit them to county elections officials by May 1, 2020. A year later, lawmakers and Republican Gov. Paul LePage moved to repeal a portion of that law and restore the state’s tip credit. Under that portion of the law, tipped workers are paid an hourly wage that’s half of the minimum wage, based on the expectation the tips they receive will exceed their overall earnings to more than the state’s hourly minimum. Both went into effect in 2017, when Maine’s hourly minimum wage increased to $9. The minimum wage has risen $1 each year since and will do so until it hits $12 in 2020. Each subsequent year’s minimum wage will be adjusted to correlate inflation.
- Maine House Democrats again rebuff GOP efforts to alter minimum wage law: Democrats in the Maine House of Representatives effectively killed a handful of Republican-backed bills on Thursday that were designed to slow the state’s voter-approved minimum wage hikes or offset its impact on employers. After Republicans advocated in floor speeches for four bills that they say would provide relief to small business owners or make it possible for them to hire and train young workers, the House voted mostly along party lines to uphold legislative committee recommendations that those bills “ought not to pass.” With their solid majority, House Democrats made relatively quick work of the latest Republican efforts to stymie incremental minimum wage increases approved by voters in late 2016. The rejected bills on Thursday included one from Rep. Richard Bradstreet, R-Vassalboro, to establish a youth minimum wage for 16- and 17-year-old workers that’s $1 less than the regular minimum wage, $2 less for 15-year-olds and $3 less for anyone age 14 and under. The Democrat-controlled chamber voted 84-57 against it.
- Three other bills — one from Rep. Shelley Rudnicki, R-Fairfield, another from Rep. Joel Stetkis, R-Canaan, and a third from Rep. Dustin White, R-Washburn — aim to create minimum wage alternatives to better accommodate smaller Maine employers. Under Rudnicki’s bill, which was rejected 90-49, employers with annual gross sales less than $500,000 could set their minimum wages at $9.75 in January 2020 with annual increases correlating with cost-of-living increases. Read more at Bangor Daily News.
TAX & BUDGET UPDATE
- Connecticut Legislators break with Lamont, pitch tax hike on wealthiest: Democratic legislators are proposing a tax increase on the investment income of Connecticut’s wealthiest households to help close the state budget deficit, putting them on a collision course with a Democratic governor opposed to raising any tax rate. This proposal is expected to enjoy strong support from leaders in the House and Senate’s Democratic majorities, but Gov. Ned Lamont has said he opposes any effort to raise the income tax, arguing it would weaken Connecticut’s economy and drive wealthy taxpayers from the state. “I’ve been pretty strict on not raising tax rates,” Lamont reiterated Thursday. “Everybody comes in and goes, ‘C’mon on gov, it’s just a half a point. It’s just another point. It’s not that big a deal.’ But it’s the fourth time in 12 years or something like that.”
- The proposed levy would apply 2 percentage points only to income from capital gains and only to households already paying the top state income tax of 6.99 percent. This applies to single filers earning more than $500,000 annually and couples topping $1 million. The bill, raised by the Democratic majority on the Finance, Revenue and Bonding Committee, was posted Monday on the panel’s website. The nonpartisan Office of Fiscal Analysis had not yet prepared an estimate on how much the tax would raise.
- But a source familiar with the measure said it’s anticipated to raise at least $200 million per year. “I think this is an attempt to have a more balanced approach to the revenue side of the budget, in terms of who’s contributing,” said Rep. Jason Rojas, D-East Hartford, co-chairman of the Finance, Revenue and Bonding Committee. Read the whole story here about the Governor’s proposed sales tax plan here.
- Arkansas lawmakers wrapped up their 2019 legislative session passing their budget and finalizing the tax bills passed this session. Read here for a review of the major tax legislation passed this session.
- The state’s current 6.5 percent corporate income tax rate—applicable to income exceeding $100,000—will see a pair of cuts phased-in over a two-year period, dropping to 6.2 percent for tax year 2021 and 5.9 percent for tax year 2022.
- California: Lawmakers are holding their breaths to see how April revenues perform—the outcome of which may necessitate revised budget proposals in May. The California Tax Foundation estimates that there are more than $6.2 billion in tax increase bills currently pending in the legislature, among them a bill to create a statewide soda tax (which has passed out of committee). As part of Gov. Newsom’s plan to cut child poverty in half by 2039, he is proposing that the state double its investment in the working families tax credit.
- South Carolina: legislators put forth proposals to make the state’s tax code even more regressive by flattening the income tax and expanding the sales tax. The bills were introduced without time to be fully considered this year, but will set the stage for the debate in 2020.
SMALL BUSINESS UPDATE
- Oregon business tax proposal unveiled: Oregonians could pay less on their state income taxes but pay more for some goods and services, under a legislative proposal to raise money for the state's struggling public school system. The long-awaited proposal will tax businesses just under one-half of 1% of their gross receipts over $1 million while cutting Oregonians' income tax rates by one-quarter of a percent for all but the top bracket. Sales of groceries, gasoline and diesel would not be taxed under the proposal.
- The smallest businesses — those that make less than $1 million in taxable revenue per year — will not be subject to the tax, nor will any that already pay the medical provider tax. Businesses that are taxed will be able to allay the impact by deducting one-quarter of either their labor costs or the amount they paid to other businesses during the course of the year.
- A small group of state senators and representatives from both parties, led by Sen. Mark Hass, D-Beaverton, and Rep. Nancy Nathanson, D-Eugene, has been meeting for weeks to hammer out a business tax proposal. In addition to taxing businesses on their sales, they have agreed to cut Oregon's personal income tax rates as a way to offset costs that companies will likely pass along to consumers. Read more here at Gazette Times.
SPORTS BETTING UPDATE
- Politico Tax reports - Don’t Bet on Sports Betting? When the Supreme Court legalized sports betting last year, lawmakers across the country salivated at the prospect of a new stream of tax revenue. But, nearly a year later, the tax windfall has mostly failed to materialize, The New York Times says. "West Virginia, for instance, has collected only one-fourth of the monthly tax revenue it projected. Pennsylvania and Mississippi have received only about half of the tax revenue they had anticipated, according to data from those states. Rhode Island has done even worse: state budget officials had assumed that sports betting would bring in nearly $1 million a month but only about $50,000 is coming in each month." Some states, including California and Texas, have dropped plans to legalize betting partly because they fear it will hurt casinos run by Native American tribes and, in the process, the state government that gets a cut of their winnings, the Times says.
- Iowa One Step Closer To Sports Betting, As Senate Easily Passes Bill: An Iowa sports betting bill passed the Senate comfortably on Wednesday, setting up the state to have legal wagering this year.
- The bill passed 31-18 with bipartisan support and now heads to the House. A new amendment appears to be a compromise that could lead to legislation being enacted into law.
- Sources close to the process confirmed the amendment’s contents to Legal Sports Report. The Iowa Senate passed the amendment to SF 617 that would bring retail and mobile sports betting to the state. Read more about progress in Iowa Sports Betting here.
- Indiana Sports Betting Bill Passes Through House Without Mobile: Sports betting passed through its second legislative chamber in Indiana, though it’s going to take overtime to get the bill right. Following a flurry of minor changes made on the House floor Thursday, bill sponsor Sen. Jon Ford told Legal Sports Report that he expected a House vote to approve S 552 today, which needed to happen for the bill not to die.
The bill now goes back to the Senate for concurrence, which Ford assures it will not get, setting up a conference committee to work out the differences between the bills as passed by the Senate and the House. Read more about the bill here at Legal Sports Report.