Are we headed for another spending showdown? President Trump wants a quick year-long budget bill that freezes spending at current levels—at least that may be the latest White House negotiating position. In the past, the president has insisted on more money for the Pentagon and, of course, his southern border wall. Senate Majority Leader Mitch McConnell wants Congress to try to pass regular spending bills that boost funding for both defense and domestic programs, and not resort to a continuing resolution. Does this feel familiar?
Then there are tariff troubles… Senate Finance Committee Chair Chuck Grassley says Congress won’t approve the US Mexico-Canada Agreement (USMCA) unless the president lifts aluminum and steel tariffs. He wrote, “Mexican tariffs on US pork, to take one example, have lowered the value of live hogs by $12 an animal.” Indeed, agricultural and manufacturing firms have suffered under President Trump’s tariffs and trade war, according to a survey by the National Association of Business Economics.
And infrastructure, too. Trump will meet with top congressional Democrats Nancy Pelosi and Chuck Schumer to talk roads, bridges, and mass transit. Everyone wants a big bill going into election season but no one, it seems, wants to talk about paying for it. Schumer wants Trump to agree to a gas tax hike and repeal of some of the tax cuts in the Tax Cuts and Jobs Act. This meeting may not go well.
Washington State legislature passes a “levy lid lift” on local taxes for schools. The state caps district-specific tax measures that supplement state allowances for education programs. The cap was due to fall, costing schools about $1 billion. But lawmakers agreed to boost the limit from $1.50 for every thousand dollars in property value to $2.50.
Pennsylvania enjoys a Wayfair windfall. The US Supreme Court decision to allow states to require online sellers to collect sales tax combined with the rapid growth of online retail has added to the state’s coffers. The Pennsylvania Department of Revenue initially estimated that tax revenue from marketplace sales would total $50.5 million this fiscal year. But just nine months into the fiscal year, the state raised $151.4 million.
But in Rhode Island, will that windfall lead to a tax cut? Rhode Island’s Republican lawmakers say the state’s sales tax should fall from 7 percent to 6.5 percent in the wake of Wayfair. In 2011, the state changed its law to reduce the rate to 6.5 percent if there were “any federal law which requires remote sellers to collect and remit taxes.” But state revenue officials and Democratic lawmakers say that since the Wayfair was a Supreme Court decision and not an act of Congress the state’s sales tax rate should remain at 7 percent. They’ll have to work out their differences in the next budget. Rhode Island’s Department of Revenue estimates that cutting the sales tax rate to 6.5 percent would reduce revenue by about $80.2 million in the year starting July 1. It the estimates new online sales tax will generate between $11 million and $13 million.
In New York State, a push to prevent tax reductions for private golf courses. Two Democratic lawmakers have introduced a bill to prevent tax reductions for private golf courses. Currently, a local government must value a golf course by its current use—defined as the revenue a private club would raise if it charged members the same rate as a municipal golf course. The bill would allow a municipality to value land on the “highest and best use” of the property—which in many cases would be higher-valued residential development.
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