Tweet

Jared Walczak

4 Mar, 8 tweets, 3 min read

Senate amendments to the American Rescue Plan Act impose restrictions on the use of the $350 billion in state and local aid.

CAN'T

- Use for tax cuts
- Deposit in pension fund

CAN

- Cover pandemic expenses
- Backfill pandemic-era revenue losses
- Do water/sewer/broadband

1/

Almost half the states saw revenue increases during the pandemic. Typically not as high as projected, but sometimes exceeding projections. Losses frequently way less than aid. So what do you spend it on if you didn't lose much revenue? Lots and lots of rural broadband? 2/

I understand Congress not wanting states to turn this into tax cuts (though if you give states money they don't need...), but what about states already planning a tax cut? Surely Congress can't ban state tax cuts through 2024. There could be some interesting adjudication. 3/

This wouldn't seem to allow states to deposit the money into their depleted unemployment compensation trust funds, the most urgent need in many states. Congress should have *targeted* the aid this way. Instead they're *prohibiting* that use. 4/

taxfoundation.org/unemployment-c…

A reminder in all of this that state revenues are only down 0.2% in 2020, and many states are up. Every state gets more aid under this bill than they posted in losses, and many (most?) get more than they missed projections by. 5/

taxfoundation.org/state-and-loca…

It's genuinely unclear to me what states are supposed to do with this money. Even with the CARES $150 billion, states couldn't find enough ways to spend it on COVID-specific responses (and they're getting more $ for actual needs like vaccines and public health in this bill). 6/

If they needed more flexibility to spend that, what's a state with stable revenues supposed to spend this money on? Can't put it in the rainy day fund. Can't replenish the UC fund. Can't cut taxes. Not much to backfill. Couldn't fully spend the last round for COVID responses. 7/

It keeps coming back to this: while there are a few jurisdictions in a genuinely rough spot, this idea of spending hundreds of billions on state and local aid is a solution in search of a problem. It's as if it's still March 2020 and we're still in the dark on revenues. /END

• • •

Missing some Tweet in this thread? You can try to force a refresh

This Thread may be Removed Anytime!

Twitter may remove this content at anytime! Save it as PDF for later use!

More from @JaredWalczak

Jared Walczak

@JaredWalczak

5 Mar

https://twitter.com/ylanmui/status/1367870111781097478

A benefit that (combined with state regular UC) gets most people to about 95% salary replacement through September seems better than one that gets most >100% but expires sooner. But exempting the first $10,200 from tax creates problems. Short thread.

https://twitter.com/ylanmui/status/1367870111781097478

(1) Many people have already filed and will have to file amended returns. Making benefits available as long as needed seems way more important than this complicated retroactive provision, which requires changing tax forms or instructions.

(2) Thirty-five states tax UC and will get about $13B from that this year. Most follow the feds on this, so the exemption will affect them as well. It lowers revenue -- and again, amended return issues, and states have to change their systems very late in the process.

Read 5 tweets

Jared Walczak

@JaredWalczak

4 Mar

I want to see actual bill text, but the abstract of Gov. Justice's income tax repeal plan in West Virginia has some notable features:

Good: across-the-board rate reductions, unlike the MS approach of phased exemptions; in first stage, rates range from 1.2-2.6%.

#wvpol #wvleg 1/

The initial PIT reductions only applies to wage, salary, retirement, and unemployment income, not business income, investment income, farm income, etc. If the goal is economic growth, no relief for small businesses or entrepreneurs is surprising (and nonneutral).

2/

In fact, small business owners would face higher taxation, not only still facing current PIT rates, but paying a higher sales tax that now applies to business purchases (legal, accounting, advertising, data processing, other professional services).

3/

Read 12 tweets

Jared Walczak

@JaredWalczak

23 Dec 20

While it's true that the coronavirus relief bill doesn't have anything designated as state and local aid, there's actually about $127 billion in there that can shore up state budgets -- which, remember, were down only $37 billion total through the end of September. 1/

The $82B in additional education grants and $45B for transportation projects has to be spent on education and transportation, but it's not contingent on states maintaining their own spending levels. They can use that federal infusion to redirect their own revenues. 2/

This is the primary way the federal government provided aid to state governments during the Great Recession -- by upping its contribution to Medicaid, education, and transportation, freeing up state dollars for other uses (including backfilling budgets). 3/

Read 8 tweets

Jared Walczak

@JaredWalczak

9 Nov 20

An interesting tension in Biden's memoir:

- Biden outlines essentially a natural law viewpoint, with courts to uphold God-given rights prior to and above written law
- He seems to situate abortion within these God-given rights
- But he believes abortion is against God's will

Here he spells out something that looks pretty similar to a natural law philosophy. He just says "natural rights" but emphasizes that they're God-given and believes them prior to and above human law, but enforceable by human courts:

Biden seems to situate abortion within this natural rights / natural law framework:

Read 7 tweets

Jared Walczak

@JaredWalczak

3 May 20

If people who throw axes while under the influence of alcohol are going "nah, too dangerous for me," your reopening is going to take a while. bisnow.com/atlanta/news/r…

When and how to lift business restrictions is a really complicated issue, and I don't have the answer. Georgia's doing it faster than seems advisable to me, but lots of other states are starting phased re-openings. A few notes:

1. Even if you think that reopening now is an atrocious idea, don't assume those who disagree are doing it out of indifference to human suffering. There's an awful lot of suffering due to closures too. Balancing that is tough. People can get it wrong without being evil.

Read 7 tweets

Jared Walczak

@JaredWalczak

30 Mar 20

Today we launched a visual guide to unemployment benefit claims, which we will be updating weekly with each Thursday's data release. The numbers are sobering. A few notes on understanding these figures: 1/ taxfoundation.org/unemployment-i…

Timing matters a lot. It will take at least another 1-2 weeks to have a strong sense of which states are facing the worst crisis. Right now there are challenges in disentangling timing of closure orders, pace of processing UI claims, reporting lags, from larger considerations. 2/

So, for instance, we know that some states initially couldn't keep pace with the benefit claims coming in. A comparatively modest (nothing is low) increase in those states is hardly good news. 3/

Read 9 tweets

Support us! We are indie developers!

This site is made by just two indie developers on a laptop doing marketing, support and development! Read more about the story.

Become a Premium Member ($3/month or $30/year) and get exclusive features!

Become Premium

Too expensive? Make a small donation by buying us coffee ($5) or help with server cost ($10)

Donate via Paypal Become our Patreon

Thank you for your support!

Share this page!

Jared Walczak

Try unrolling a thread yourself!

More from @JaredWalczak

Jared Walczak

Jared Walczak

Jared Walczak

Jared Walczak

Jared Walczak

Jared Walczak

Did Thread Reader help you today?

Like this author's thread?