BALANCING STRESSED BUDGETS WHILE OFFERING TAX RELIEF
During 2016 campaigns, Republicans championing the party’s traditional pledge to cut taxes won both legislative chambers in 32 states and installed GOP governors in 33 states.
There are expectations for them to do so in 2017 while also repairing stressed budgets in states plagued by winnowing revenues and increasing expenditure commitments.
At least 25 states ended Fiscal Year 2016 with budget deficits fostered by lower than projected tax revenues. At least 24 states report FY17 general fund revenues below projections — with 19 imposing mid-year reductions in adopted budgets.
Plugging budget holes while cutting taxes will be most state legislators’ biggest 2017 issue, pitting supporters of public services, state/municipal workers and educators, among others, against taxpayer advocates and business interests.
RAISING GAS TAXES FOR INFRASTRUCTURE IMPROVEMENTS
President-elect Donald Trump has pledged $550 billion for infrastructure improvements. After receiving little federal assistance for years, this commitment has buoyed states while also putting the onus on them to integrate capital improvement plans with Trump Administration priorities to get the most bang for the buck.
But finding money to make it happen poses potential political pitfalls. The primary source for infrastructure financing is gas taxes. The federal 18.4 cent gallon levy hasn’t changed since 1993. Congressional Republicans are expected, again, to resist increasing it, leaving states with the unpopular prospect of, again, raising gas taxes.
Of 20 states that haven’t raised gas taxes in more than a decade, at least 12 will consider doing so in 2017. All acknowledge the need for infrastructure investment, but paying the bill will foster contention among opposing advocacy groups.
THE ‘KILL QUILL’ QUEST TO FORCE ONLINE RETAILERS TO PAY SALES TAXES
Congressional inaction has forced states to adopt laws demanding online retailers pay sales taxes. In 2016, South Dakota enacted a law to induce lawsuits and spur a penultimate legal challenge to 1992’s U.S. Supreme Court ‘Quill’ ruling that online sellers need only collect sales taxes for states where they have a physical presence, or “nexus.”
Three online retailers have sued; the first hearing was in December. Also in December, the U.S. Supreme Court denied a challenge to Colorado’s 2010 “Amazon tax” law.
More than a dozen states are expected to introduce 2017 bills to also levy sales taxes through an “economic,” rather than physical, nexus, setting taxpayers, brick-and-mortar businesses and municipalities against consumer groups and online giants such as Amazon, EBay and overstock.com.
GUN CONTROL v. GUN-OWNERS’ RIGHTS
With little Congressional enthusiasm for federal gun control, advocates in 2016 successfully focused on states. Voters approved three of four November state ballot measures — in California, Nevada, Washington — imposing tighter firearms regulations.
However, with Donald Trump as President, Republicans retaining Congressional majorities and the GOP controlling 32 state legislatures, gun control momentum appears stymied. There’s already a glut of 2017 state proposals to expand “constitutional carry,” repeal gun-free zones and pre-empt municipalities from adopting firearms ordinances.
Unlike when the National Rifle Association and National Shooting Sports Foundation defended gun-owners’ rights against gun-control initiatives sponsored by Michael Bloomberg-financed Every Town For Gun Safety and the Brady Campaign to Prevent Gun Violence primarily in Washington, D.C., states are the new battleground.
COMBATING OPIOID ADDICTIONS, OVERDOSES
Roughly 2.5 million Americans are addicted to prescription painkillers. Addressing opioid addictions and overdose is a pressing priority for federal and state lawmakers.
Congress took significant action in 2016, approving federal opioid prescribing guidelines and allocating another $1 billion to fighting the epidemic.
On the state level, 45 governors signed the Compact to Fight Opioid Abuse, mandating, among other things, improved monitoring and increased access to treatment services through state healthcare programs, such as Medicaid.
Administering these initiatives will again spur a raft of state-level legislation in 2017. There’s little disagreement about the need for them, but the devil — and discord — will be in the details.
ASSAILING ’SANCTUARY CITIES’
Immigration was a contentious issue in the Presidential campaign as well as in state — and even local — elections.
The fall-out has spurred renewed enthusiasm for state laws banning foreign or religious laws — “anti-Sharia Law” bills — enhancing crime penalties for undocumented aliens, levying out-of-state money transfer fees and prohibiting “sanctuary cities.”
In 2016, bills prohibiting “sanctuary cities” were introduced in 18 states, with Georgia joining Missouri and North Carolina in banning them. Lawmakers in many as 20 states — including eight with 2016 “sanctuary city” bans in committee, poised for carry-over introduction — are expected to consider similar bans in 2017.
ENDING MARIJUANA PROHIBITION BY LEGISLATION RATHER THAN BY BALLOT
Six states may consider legalizing recreational marijuana in 2017. There is a good chance that Vermont and Rhode Island will be the first states to lift marijuana prohibition by law rather than ballot initiative.
California, Maine, Massachusetts and Nevada voters approved 2016 measures legalizing recreational marijuana while Florida, Arkansas, North Dakota and Montana voters legalized medical marijuana. Recreational marijuana is now legal in eight states; medical marijuana lawful in 28.
States’ momentum to end marijuana prohibition and tax the $6.7 billion retail marijuana industry, estimated to generate $21.8 billion by 2020, is tempered by Donald Trump’s nomination of marijuana prohibitionist Sen. Jeff Sessions (R-Ala.) as Attorney General.