State Revenue Volatility and Optimal Reserve Size Are Directly Linked – Comparison of states provides insight into their ability to weather an economic downturn

Source: Mary Murphy & Steve Bailey, Pew Charitable Trusts, November 14, 2018

The amount of money a state takes in fluctuates from year to year, with a range of factors influencing this volatility. Those factors can include specific tax revenue sources, the state’s economic profile, federal budget changes, and unforeseen events such as natural disasters. Although each state’s revenue swings may be unique, all face the challenges associated with managing these ups and downs.

Policymakers can use reserves to help offset revenue declines during down periods, such as recessions. But how much a state should hold in its reserves—its savings target­—can vary as well, and for many reasons. For example, leaders in one state might have a higher risk tolerance than their peers, meaning they are more willing to save less than enough for the next downturn. Some may more routinely use other budget tools, such as raising revenue or cutting spending, to close a budget gap. These alternative approaches can reduce reliance on reserves…..

Republicans Brazenly Gut Voting Rights in Lame Duck Before They Lose Power

Source: Ari Berman, Mother Jones, December 3, 2018

Four states are taking unprecedented steps to strip power from Democrats and make it harder to vote.

Related:
Case Studies in Voter Suppression: Profiling Voter Suppressors
Source: Danielle Root and Aadam Barclay, Center for American Progress Action Fund, November 26, 2018

Home is Where the Job Is … The Pros and Cons of Alternative Work Arrangements for Employers

Source: Daniel K. Miles, FordHarrison, 2018

From the summary:
Whether you blame advances in technology or the influx of millennials into the modern workplace, the age of time cards and punch clocks is inching ever closer to extinction. In research recently conducted by ADP, “freedom” was identified as a basic human need, and 81 percent of modern employees felt they should be able to work from anywhere in the world. As a result, employers now find themselves facing the reality of “alternative work arrangements.” As the title implies, alternative work arrangements are those structured outside of the traditional 9-5 office environment. Perhaps the most prevalent alternative work arrangement impacting employers today is remote workplaces. According to a 2016 Gallup poll, at least 43 percent of American workers are working remotely at least part of the time. That number is unlikely to decrease and, accordingly, employers would be wise to determine how best to address this evolution of the modern workplace sooner rather than later. In reality, alternative work arrangements – including allowing employees to work from home – is neither inherently good nor inherently bad. Still, an understanding of the pros and cons of these types of arrangements is imperative to protecting employers and maintaining a happy and productive workforce.

The John Birch Society is still influencing American politics, 60 years after its founding

Source: Christopher Towler, The Conversation, December 6, 2018

The retired candy entrepreneur Robert Welch founded the John Birch Society 60 years ago to push back against what he perceived as a growing American welfare state modeled on communism and the federal government’s push to desegregate America.

Although Welch’s group has never amassed more than 100,000 dues-paying members, it had garnered an estimated 4 to 6 million sympathizers within four years of its 1958 formation.

As a scholar of political history and social movements, I find many parallels between today’s far right and its predecessors. Just as the John Birch Society emerged in the midst of the civil rights movement, today’s far-right movements formed as a reaction to the election of Barack Obama – a milestone for racial equality…..

…. Even though Welch understood racism and bigotry would hurt his cause, the John Birch Society’s opposition to the civil rights movement attracted Americans sympathetic to racist paranoia. For example, it consistently published reports accusing civil rights leaders of communist subversion and alleging that people of color were plotting to divide the country and control the world. ….

…. The John Birch Society is also directly linked to conservative politics today.

Most notably, Fred Koch, the father of David and Charles Koch, was among the Birch Society’s first 11 members and its main financial backers. The billionaire Koch brothers have pumped massive amounts of money into libertarian causes and conservative political campaigns for decades. ….

Latinos’ Retirement Insecurity in the United States

Source: Jennifer Erin Brown, National Institute on Retirement Security, December 2018

From the summary:
This report finds that inequalities in access and eligibility to employer-sponsored retirement plans are contributing to persistent retirement savings gaps for Latinos. As a result, Latinos are falling even further behind in preparing for retirement. Only 31 percent of all working age Latinos participate in workplace retirement plans, resulting in a median retirement account balance equal to $0.
The research finds that:
– Access and eligibility to an employer-sponsored retirement remains the largest hurdle to Latino retirement security.
– The retirement plan participation rate for Latino workers (30.9%) is about 22 percentage points lower than participation rate of White workers (53%).
– When a Latino has access and is eligible to participate in a plan, they show slightly higher take-up rates when compared to others races and ethnicities.
– For working Latinos who are saving, their average savings in a retirement account is less than one-third of the average retirement savings of White workers. Overall, less than one percent of Latinos have retirement accounts equal to or greater than their annual income.

Who Pays: A Distributional Analysis of the Tax Systems in All 50 States

Source: Meg Wiehe, Aidan Davis, Carl Davis, Matt Gardner, Lisa Christensen Gee, Dylan Grundman, Institute on Taxation and Economic Policy (ITEP), October 2018

From the summary:
Who Pays: A Distributional Analysis of the Tax Systems in All 50 States (the sixth edition of the report) is the only distributional analysis of tax systems in all 50 states and the District of Columbia. This comprehensive report assesses tax fairness by measuring effective state and local tax rates paid by all income groups. No two state tax systems are the same; this report provides detailed analyses of the features of every state tax code. It includes state-by-state profiles that provide baseline data to help lawmakers and the public understand how current tax policies affect taxpayers at all income levels.
The report includes these main findings:

– The vast majority of state and local tax systems are inequitable and upside-down, taking a much greater share of income from low- and middle-income families than from wealthy families. The absence of a graduated personal income tax in many states and an overreliance on consumption taxes contribute to this longstanding problem.

– The lower one’s income, the higher one’s overall effective state and local tax rate. On average, the lowest-income 20 percent of taxpayers face a state and local tax rate more than 50 percent higher than the top 1 percent of households. The nationwide average effective state and local tax rate is 11.4 percent for the lowest-income 20 percent of individuals and families, 9.9 percent for the middle 20 percent, and 7.4 percent for the top 1 percent.

– Tax structures in 45 states exacerbate income inequality. Most state and local tax systems worsen income inequality by making incomes more unequal after collecting state and local taxes. Five states and the District of Columbia somewhat narrow the gap between lower- and middle- income taxpayers and upper-income taxpayers, making income slightly more equitable after collecting state and local taxes.

– In the 10 states with the most regressive tax structures (The Terrible 10), the lowest-income 20 percent pay up to six times as much of their income in taxes as their wealthy counterparts. Washington State is the most regressive, followed by Texas, Florida, South Dakota, Nevada, Tennessee, Pennsylvania, Illinois, Oklahoma, and Wyoming.

– Heavy reliance on sales and excise taxes are characteristics of the most regressive state tax systems. Six of the 10 most regressive states derive roughly half to two-thirds of their tax revenue from sales and excise taxes, compared to a national average of about one-third. Seven of these states do not levy a broad-based personal income tax while the remaining three have a personal income tax rate structure that is flat or virtually flat. A calculation of effective sales and excise tax rates finds that, on average, the lowest-income 20 percent pay 7.1 percent, the middle 20 percent pay 4.8 percent and the top 1 percent pay a comparatively meager 0.9 percent rate.

– A progressive graduated income tax is a characteristic of the least regressive state tax systems. States with the most equitable state and local tax systems derive, on average, more than one-third of their tax revenue from income taxes, which is above the national average of 27 percent. These states promote progressivity through the structure of their income taxes, including their rates (higher marginal rates for higher-income taxpayers), deductions, exemptions, and use of targeted refundable credits.

States commended as “low-tax” are often high-tax for low- and middle-income families. The 10 states with the highest taxes on the poor are Arizona, Florida, Hawaii, Illinois, Indiana, Iowa, Oklahoma, Pennsylvania, Texas, and Washington. Six of these are also among the “terrible ten” because they are not only high-tax for the poorest, they are also low-tax for their richest residents.

Related:
Data Available for Download
State-by-State Data and ITEP Tax Inequality Index Map

Exaggerating the Effects of Janus: A Reply to Professors Baude and Volokh

Source: Erwin Chemerinsky, Catherine Fisk, Harvard Law Review Forum, Vol. 132, p.42, 2018, Forthcoming

From the abstract:
In Janus v. AFSCME Council 31, the Supreme Court held public employers can no longer require employees to pay fair share fees, i.e., the employees’ fair share of the costs unions incur in negotiating and administering labor contracts on the employees’ behalf. This essay responds to an article by William Baude and Eugene Volokh, who argue that unions are likely retroactively liable for the agency fees that union-represented workers previously paid. We explain that public employee unions, as private membership organizations, are not state actors liable under 42 U.S.C. § 1983. We then show that even if unions were found to be acting under color of law for purposes of section 1983, they would be entitled to qualified immunity as a defense because negotiating for fair share fees did not violate the constitution at the time unions negotiated fair share fee agreements and received fees. At the very least, unions are entitled to the separate defense of good faith immunity available to private actors who are sued under section 1983 for conduct undertaken in good faith in collaboration with government actors. Finally, we show that unions are not liable on state law theories. Qualified immunity is a defense only to claims for damages under federal law, and good faith immunity has likewise been applied only to claims for damages. For that reason, plaintiffs in the post-Janus fee recovery litigation have alleged state law claims and styled them as equitable. Some states (e.g., California) have eliminated such liability through legislation. Even in states that have not enacted such laws, however, we show that well-settled equitable principles foreclose liability. Finally, this essay responds to Baude and Volokh’s argument that Janus endangers other mandatory fees imposed by the government, such as bar dues and public university student activity fees.