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Posts published in “Day: May 20, 2013”

A sales tax update

May 20, 2013
weatherby JAMES
WEATHERBY
 

Idaho is one of only two states that taxes Girl Scout cookies. How could a heartless legislature turn its back on a tax relief request from this very worthy organization? And how could they deny a tax exemption on goods purchased by homeless shelters?

In 1988, the Governor's Tax Study Committee expressed its concern about the growth of exemptions whether they were serving a public interest or just providing “favors to various special interest groups”. In 2003, that “concern” was again addressed by a legislative task force that scrutinized exemptions. Despite the optimism expressed in several editorials around the state, substantive action did not follow. Though there seemed to be significant support for reform, there was little appetite for taking on entrenched interests who benefited from the tax breaks.

Fast forward to 2013. Both sales tax exemption bills were strongly endorsed in the House committee and easily passed on the House floor. Even with opposition from some members of Senate leadership, it was widely believed that at least the Girl Scout cookies bill would pass on the floor of the Senate and become law. But both bills died without even a Senate hearing.

In a few months we'll have another legislative session and no doubt the Girl Scouts will be back. Will the cookie crumble in the Senate – in an election year? Maybe. But how long can some Senate leaders assert their opposition to what seems to be reasonable bills? Virtually every legislative session in modern memory has considered one or more bills granting sales tax exemptions, so how can lawmakers deny exemptions to the Girl Scouts and to homeless shelters when the law is riddled with tax breaks to possibly less worthy organizations but ones who have far more political muscle? They may be coming late to the party, but the senators position is that until the sales tax is reformed or a well developed criteria for exemptions is established, more exemptions should not be granted.

Enacted in the 1960s, the sales tax is outdated. It was designed for a manufacturing based economy, not the service based economy we have today. Extending the sales tax to services has been a much debated policy option for about 30 years, but to enact an extension to services would involve a tax increase for many current tax-break beneficiaries. Tax reform bills are often supported in concept but shredded beyond recognition in the messy process of lawmaking. (more…)

In the Briefings

May 20, 2013
red algae
 
ALGAE BLOOM: This is a red-orange algae bloom spotted at Edmonds on May 16. (Photo/submitted to the Department of Ecology by Jeri Cusimano)
 

In Washington and Oregon both (most notably in Oregon), state tax revenue reported as rising, and unemployment dropping – one of the best weeks of economic news in more than half a decade. Not bad in Idaho, either.

If the mood in Olympia seems still a bit sour, that has more to do with political battling than anything else: The core news is not so bad, though legislators are likely to keep up their conflicts for some weeks to come. How about special session?

A letter to Fox

May 20, 2013
rainey BARRETT
RAINEY
 
Second
Thoughts

My Fox Friends:

Because I know you operate with limited “fact” checking folk – relying instead on GOP in-house “research” and the Heritage Foundation for that – I’d like to pass along some old fashioned, shoe leather research Ben Cesca of Huffington Post recently did. All from the public record. Because of the nature of his findings – pre-Benghazi – I’m certain none of you were allowed to read it. Forbidden, actually. So, here goes.

Jan. 22, 2002: Calcutta, India – Harakat-ul-Jihad as-Islami attack U.S. Consulate – five employees killed.

Jun. 14, 2002: Karachi, Pakistan – al Qaeda suicide bomber hits U.S. Consulate – 12 employees killed - 51 injured.

Oct. 12, 2002: Denpasar, Inbdonesia – Diplomatic offices bombed.

Feb. 28, 2003: Islamabad, Palistan – Gunmen fire on Embassy - two killed.

May 12, 2003: Riyadh, Saudi Arabia: al Qaeda stormed U.S. diplomatic compound – 36 killed including nine Americans.

Jul. 30, 2004: Tashkent, Uzbekistan: U.S. Embassy bombed – two dead.

Dec. 6, 2004: Jeddah Saudi Arabia – al Qaeda stormed U.S. Consulate – nine dead.

Mar. 2, 2006: Karachi, Pakistan – For the third time in four years, U.S. Consulate bombed – four dead including Ambassador David Foy.

Sep. 12, 2006: Damascus, Syria: Gunmen storm U.S. Embassy killing four.

Jan. 12, 2007: Athens, Greece – Rocket attack on U.S. Embassy. Bad shots.

Mar. 18, 2008: Sana’a, Yemen – Islamic Jihad of Yemen fire mortar at U.S. Embassy. Missed. Hit school next door killing two.

Jul. 9, 2008: Istanbul, Turkey – Terrorists attack U.S. Embassy killing six employees.

Sep. 17, 2008: Sana’a, Yemen – Terrorists with car bombs and RPGs kill 16 including an American student. Second attack there in seven months.

That’s 13 American embassy and consulate attacks during the two-term tenure of G-W-B. Two terms during which you were just not as worked up as you are today. (more…)

Impacts of the cut

May 20, 2013
trahant MARK
TRAHANT
 
Austerity

Indian Country has already been hit hard by the sequester.

Lacey Horn, treasurer of the Cherokee Nation, recently told National Public Radio that the tribe had been planning for the impact for some time with cost-cutting measures, a hiring freeze for all non-essential positions, and canceled training and travel. “We’re delaying or foregoing any capital acquisitions, both large and small. And we're looking at our encumbrances to see if there's any changes in scope or quantity that we can make and strictly enforce the employee overtime.”

Horn’s goal is to try and absorb the sequester “to the greatest extent possible before we start making reductions in jobs and services.”

This is exactly what a tribal government should be doing. Looking for ways to “absorb” the cuts with as little impact as possible on direct services or jobs.

But can tribes do that over and over for the next decade? The Budget Control Act, the law that governs the sequester, is a ten-year austerity effort. As the Bipartisan Policy Center describes the law: “Sequestration’s effect will be akin to that of a slow motion train wreck ... the ramifications will steadily worsen as time passes.”

The Congressional Budget Office reported that the president’s budget would “lower the caps for 2017 through 2021 on discretionary spending that were originally set by the Budget Control Act and extend those caps through 2023. However, much of that lower spending would be offset by eliminating the automatic spending reductions that have occurred or are scheduled to occur under current law from 2013 through 2021. In total, those changes would lead to discretionary outlays that are 6 percent lower in 2016 than they were in 2012 but that would grow later in the decade; as a percentage of GDP, such outlays would fall from 8.3 percent in 2012 to 5.0 percent in 2023, 0.5 percentage points lower than the amount in CBO’s baseline and the lowest level in at least the past 50 years.”

Think about the last part of that sentence. The president’s budget would lift some of the hard spending caps under the Budget Control Act, but even then federal spending for domestic programs would be at the lowest level since President Kennedy’s time. And, as I have written before, the president’s budget represents a decent outcome. The president’s budget, according to CBO, would trim federal deficits by $1.1 trillion over the coming decade. Not a bad outcome. But the president’s budget would require a “yes” vote from both the House and the Senate. That’s not going to happen. (more…)