Highways, Pensions, Deficits and Reform: A Long and Winding Road
By Renu Zaretsky :: June 27th, 2014
“Are we there yet?” It’s just a little (or a lot) further for the federal Highway Trust Fund. Congress just left for a week-long recess, leaving the Highway Trust Fund nearly empty. The Senate Finance Committee didn’t support Chairman Ron Wyden’s $9 billion tax-raising patch, in spite of Wyden’s willingness to drop some tax increases. He hopes to work out a compromise with House Ways & Means Chairman Dave Camp and both would like agreement in early July. About 112,000 construction projects and almost 700,000 jobs are on the line. With stakes like these, it makes one wonder whether government trust funds make any sense.
New Jersey’s Governor Christie has court authority to cut pensions. The state’s Democratic-majority legislature has proposed a temporary $1 billion tax hike on millionaires and corporations to fill New Jersey’s pension shortfall. But Republican Governor Christie has won state court authority to cut state pension payments by $887 million this year.
Pennsylvania’s GOP House would suspend tax credits to help close the state’s deficit. Facing a $1.5 billion budget shortfall, the House passed a budget bill that suspends 13 tax credits worth $48.2 million.
Indiana’s Republican Governor Mike Pence wants to reform the state’s tax code. The state’s Office of Management and Budget convened a “mix of national conservative leaders and state and local tax experts” to explore ideas. The primary goal, summit participants said, is simplification. Coincidentally, the state will simplify the way it taxes gasoline. Starting July 1, the state will replace a prepaid gasoline sales tax collected by gas stations with a new gasoline use tax based on the previous month’s statewide average cost of a gallon of gas. Indiana will collect the tax from gasoline distributors.
The District of Columbia just approved its own version of tax reform. TPC’s Howard Gleckman gives voice to the tacit manner in which race and class shaped the final product.
Want to test drive your taxing and spending skills? The Committee for a Responsible Federal Budget has updated its online fiscal simulator. It’s harder to balance a national budget than it looks. Drive safely.
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