With revenues plummeting and federal aid in short supply, many states are scrambling to fill holes in their budgets. The easiest way to do it? Raise taxes.
At least ten states are considering major increases in the near future. They are:
- Arizona
- Connecticut
- Delaware
- Illinois
- Massachusetts
- Minnesota
- New Jersey
- Oregon
- Washington
- Wisconsin
Two states have already implemented significant increases: California and New York.
That means that at about a quarter of all states are raising taxes to meet budget shortfalls. If you take those that don’t have income taxes out of the equation, it’s closer to a third. The bad news is that number is expected to climb.
Adding to the income tax woes are shortages in sales tax revenue. Sales tax revenues are at their lowest in years, fueled by a general decline in the sales of taxable goods across the country. Some experts worry that increasing income taxes will only contribute to the drop in sales tax, creating even more problems.
It will be interesting to see what states follow… The number of federal mandates (like No Child Left Behind) has not decreased while funding for those programs has. Add that to increasing jobless claims and foreclosures (and those related costs) and many states will have bigger problems, not fewer. Is your state next?
There’s even more good news for the victims of severe flooding in Minnesota and North Dakota. Not only is the weather getting better but residents get some extra breathing room from IRS.
Since the flooding occurred so close to the April 15 due date, taxpayers and relief workers directly impacted by the flooding will have until May 15, 2009 to file and make payments for their 2008 returns. Taxpayers affected by the flood will not incur late filing or payment fees and interest. To take advantage of the extension, affected taxpayers should mark paper tax returns with the words “severe storms, flooding.” Taxpayers who file their returns electronically can use the “disaster” feature in the software, if available.
This relief applies to flood victims in Clay, Kittson, Marshall, Norman, Polk, Traverse and Wilkin counties in Minnesota.
It also applies to the following counties and Indian Reservations in North Dakota: Adams, Barnes, Benson, Billings, Burleigh, Cass, Cavalier, Dickey, Dunn, Emmons, Foster, Grand Forks, Grant, Hettinger, Kidder, LaMoure, Logan, McIntosh, McKenzie, McLean, Mercer, Morton, Nelson, Oliver, Pembina, Ramsey, Ransom, Richland, Sargent, Sioux, Stark, Stutsman, Walsh, and Williams counties, and Standing Rock and Spirit Lake Indian reservations
And, of course, if you are affected by the flooding, our thoughts are with you.
Okay, so maybe they didn’t say it quite like that… But farmers in Minnesota are taking it that way.
A program in Minnesota called the Green Acres Program was supposed to offer property tax relief to farmers in the state, much like programs in other states. In Pennsylvania, for example, there is a similar “Clean and Green” program. The idea is to keep property taxes low for land that is used for farmland but would otherwise have a higher fair market value if sold off to build McMansions, strip malls and the like.
Only, the legislators in Minnesota apparently don’t *get* farming. This year, after hearing that developers were reportedly getting tax breaks under the program, the legislature tweaked the rules to make it more difficult to qualify for the tax breaks.
A noble goal, perhaps. But the implementation is a bit pathetic, um, lacking. Now, nonproductive land – generally considered that which is not tilled – will be taxed at a higher rate regardless of the intended use of the land. In other words, even if the purpose of the land is farming, if the government determines that it’s not productive land, there will be an increase in taxes. In some cases, the taxable value of the land as “unproductive” is reportedly as high as 20 times the farming value of the land.
It’s not entirely clear what the government believes is productive, though indications are that it must be tillable – meaning no trees. To prove that land could be productive, farmers feel that they have no choice but to cut down trees, no matter the age or purpose of the trees. Trees which may have been used as windscreens or buffers to protect farmland – or on land that is not actively being farm after years of use on a crop rotation system – could be classed as unproductive land according to memos that have been flying around the state. So, the farmers reason, the trees have to go.
Farmers are, of course, furious that they have been put in this position. Thom Petersen, director of government relations for the Minnesota Farmers Union, has said: “I’m sick when I hear that farmers — strong conservationists — are clearing their land because they don’t know what else they can do.”
Nonetheless, as a Jan 2 deadline for proving that the land is productive approaches, farmers are still rushing to clear trees to make the land look “productive.”
Which is great, Minnesota. Cause exactly what we need to curb development is cutting down more trees.
Well done.
The Vikings apparently can’t win for losing. First, they had to deal with the soap opera that is Brett Favre and the Green Bay Packers – in case you somehow remarkably missed the drama, Favre talked to the Vikings about a position on the team – as a result, the Packers, who have indicated that they will not release Favre filed tampering charges with the NFL against the Vikings. Now, residents are apparently revolting against the state’s plans to build stadiums with tax dollars.
To be fair, it’s rare that taxpayers ever want to finance new stadiums, no matter how much revenue they may (or may not) bring to an area. It’s difficult to understand why your tax dollars should contribute towards the cost of a stadium that will benefit players and coaches at your expense – and that’s after you’ve forked out way too much money for tickets and stadium beer. But the reality is that teams will – and do – move if the stadiums aren’t built.
So, of course, states like Minnesota, are scrambling to balance the benefits of having a team in their state with the angry reactions from fans and tax payers. According to the NFL, the Vikings have never had a stadium of their own – they share a stadium with the Minnesota Twins (wow, I didn’t even know that Minnesota still had a baseball team). They are only one of three NFL teams with stadiums doing double duty. I think, but am not certain, that the other teams are Oakland and Atlanta (if you know better, please let me know in the comments).
Minnesota had initially agreed to use public money to help fund a new $1 billion stadium which would open in 2012. Maybe it’s the economy – or maybe it’s the lack of enthusiasm about the Vikings – but that has since changed. In 2008, state officials said they would not support public financing for a new stadium but of course, with the lease at the old stadium looming, most think that will change. And that doesn’t mean that people are happy about it.
Dean Brian Carter, of Washington County, Minnesota, has been charged with six felony tax crimes for failing to file and pay taxes. Among the reasons that Carter cited for not complying was that he didn’t think tax money should be used for building stadiums.
This comes back to a question that I asked before about the war in Iraq: should you be able to pick and choose where your tax dollars go?
So, today, since it’s Friday, let’s talk Fix the Tax Code! Today’s question is split:
Who should pay to fund sports stadiums?
Should taxpayers shoulder the burden since stadiums ostensibly bring revenue and glory to the City? (I note that in Philly, we’re still waiting on the glory)
Or should the team players and owners bear the cost of expansion and improvements?
Or should season ticket holders and visitors to the stadium pay via a surtax?
Tell me what you think.
