business backgrounder | legislative tax & fiscal policy largest tax increases in state history grade: f-
The Legislature approved a nearly $ 78 billion two-year budget that relies on major tax hikes. Lawmakers, on partisan votes, passed the 1,300-plus-page budget less than 30 hours after it was released to the public. While the budget includes significant savings, it also increases spending on net – by about $ 1 billion above maintenance level.
The budget will be paid for by the largest tax increases in state history. Those include across-the-board business & occupation tax hikes plus a temporary B & O tax surcharge on high-grossing businesses. Another bill broadens the sales tax to a wide range of categories including advertising, IT and digital services, and temporary staffing agencies.
“ The significant pieces of the revenue package made it through the legislative process in just 10 days,” said Max Martin, AWB tax & fiscal policy director.“ That clearly limits the ability for public input, to really understand the complications and unintended consequences.”
State, local and transportation tax increases amount to about $ 12 billion.“ If you take that amount of money out of the economy, everyone will feel it,” Martin said.“ The increase is not happening in a vacuum,” noting that the state ranks near the bottom for cost of living and affordability.
employment law an“ avalanche” that could have been worse grade: d
A bill to allow striking workers to receive unemployment insurance benefits for up to six weeks cleared the Legislature. Over the session, AWB raised many concerns about the bill’ s fiscal impacts, potential to prolong strikes, and the simple fact that UI benefits are intended for workers who lose their job through no fault of their own.
Lindsey Hueer, AWB’ s lead on employment law and labor issues, said the bill will increase costs for all employers in the state. It is also an inappropriate time to expand benefits, with the potential for significant federal funding cuts to the state’ s UI trust fund – which is 100 % employer paid.
Lawmakers also expanded Paid Family & Medical Leave, requiring employers with fewer than 50 employees to provide job protection to workers taking leave. On a positive note, the bill provides a $ 3,000 grant to cover a replacement employee and prohibits the stacking of state and federal leave.
Overall, the session added a host of new regulations on employers.“ I know it feels like an avalanche coming down, but the avalanche could have been bigger and worse,” Hueer said.
AWB was pleased to see reforms to the state’ s pay transparency law, which requires employers to include a salary range in job postings. Since the law began in 2023, there have been over 250 lawsuits filed over allegedly deficient job postings, representing
“ We’ re seeing more effort by the Legislature to recognize the costs these emissions reductions programs have on consumers and businesses and trying to find ways to make them work.”
— Peter Godlewski, AWB director for energy, environment and water policy.
over half a billion dollars in employer liability. New legislation will protect employers from frivolous lawsuits and offer an opportunity to correct a posting before triggering liability.
energy and environment steps to bring down costs grade: b +
Lawmakers took steps to manage costs associated with climate legislation this year.
“ We’ re seeing more effort by the Legislature to recognize the costs these emissions reductions programs have on consumers and businesses and trying to find ways to make them work,” said Peter Godlewski, AWB’ s director for energy, environment and water policy.
AWB has called for lawmakers to revise the state’ s Climate Commitment Act( CCA), as carbon prices continue to climb in quarterly auctions. Lawmakers passed a bipartisan bill that makes more carbon allowances available sooner and sets a lower ceiling on
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