Trends and Transitions: March 2010
The recession has created serious revenue shortfalls, and some states are partially plugging the gaps by raising taxes and fees. Tobacco tax increases account for about $1.9 billion—6.7 percent—of the $28.5 billion in total tax increases enacted for FY 2010. Taxes on tobacco take two forms: taxes levied on cigarettes on a per pack basis, and taxes levied on other tobacco products such as cigars, snuff and chewing tobacco.
Last year, 17 states, the District of Columbia and the federal government raised tobacco taxes. Twenty-seven states now levy more than $1 in taxes per pack of cigarettes. Fourteen states, Washington, D.C., and Puerto Rico levy a tax of $2 per pack or higher. And Connecticut and Rhode Island tax at $3 and $3.46, respectively.
Nine states raised taxes on cigarettes and other tobacco products. And Maine, New York and Texas raised taxes on cigars, snuff and chewing tobacco but left cigarettes alone in 2009.
And in Colorado, lawmakers eliminated the sales tax exemption for cigarettes.
The current high demand and going price for metals such as copper and aluminum have encouraged thieves to steal wiring, piping and cables from empty homes and utility properties and sell their bounty to scrap metal dealers and recyclers.
In 2009, 25 states introduced legislation to more closely regulate scrap metal dealers and create penalties for stealing metal or purchasing stolen metal.
Indiana, for example, now requires a valuable metals dealer to photograph all sellers and to record the source of the metal. The
Working 4 Utah Is Working
Working for the government hardly brings to mind a regular three-day weekend, but for Utah state employees that is the norm. Utah became the first state to go to a four-day work week for most state employees under a one-year pilot program that began in August 2008. Called Working 4 Utah, the goals of the project were to expand the hours government services would be available to citizens, while reducing energy use and costs. A final report on results of the program was issued in December 2009, and Working 4 Utah was deemed a success.
Most of the state’s employees work four 10-hour days, from 7 a.m. to 6 p.m., and take every Friday off. Schools, courts and correctional facilities aren’t included, but almost all other departments—and more than 900 state buildings—are closed on Fridays.
The savings have been significant. Energy use in state buildings is down by 10.5 percent, generating more than $500,000 in savings. Another $200,000 was saved on custodial costs, plus an additional $200,000 in operational expenses. The use of state cars also decreased, resulting in a savings of almost 524,000 gallons of gas. Greenhouse gas emissions were reduced by more than 10,000 metric tons for the year, based on decreased vehicle and building usage.
The employees like their new schedules; 82 percent are glad the program is continuing. Two unanticipated benefits have been a 30 percent decrease in overtime costs and a reduction in absenteeism.
Citizens, as well, support the new schedule since state services are now available for longer days, allowing them to get what they need without having to take time off from work. More than 70 percent of the public believe the new schedule has been a good way for the state to save money.
Other states have flexible schedules for state workers, but no other states close for one day a week. Only Washington has tried anything similar, and it includes just a few agencies, not entire departments.
law also removes a provision exempting valuable metal transactions under $100 from reporting requirements. Kansas passed a law that requires dealers to keep a record of a scrap metal seller’s sex, date of birth, and driver’s license or passport identification number.
Damaging utility property—including irrigation and water conservation property—is now a crime in Arizona. The law also prohibits purchasing a catalytic converter except by a motor vehicle repair business or recycler and prohibits purchasing certain metals altogether. Connecticut law makes the theft of equipment used to provide telecommunication services a third-degree larceny if it causes an interruption in emergency services.
Illinois can now seize any vessel, vehicle or aircraft used in an attempt to steal precious or scrap metal. And a defendant in Utah is now liable for damages caused during the theft of regulated metal; the victim also can bring civil action for damages.
State lawmakers also looked at regulating scrap metal recyclers. Illinois now includes iron, steel and other ferrous metals in the definition of “recyclable metal” and requires a recyclable metal dealer to record certain information for each transaction involving metal street signs.
Several states have bills pending, ensuring this issue will stay on legislative agendas for at least another year.
Juvenile Life Without Parole on Trial
Is sentencing adolescents to life without the possibility of parole cruel and unusual punishment? Last November, the U.S. Supreme Court heard arguments on whether some young criminals are beyond rehabilitation. The two cases, Graham v. Florida and Sullivan v. Florida, both deal with juveniles sentenced to life without parole for offenses other than homicide.
Terrance Graham, now 22, was given a life sentence without parole at age 17 after he violated probation on an armed robbery charge. Sullivan focuses on an even rarer class of juvenile offenders—those who were sentenced to life without parole for crimes committed before turning 14. Joe Harris Sullivan, now 33, had a juvenile record for burglary, assault and killing a dog. He was sentenced to life without the possibility of parole at age 13 after robbing and raping an elderly woman. Sullivan is also mentally disabled.
Attorneys for both men argued their sentences were unconstitutional because they did not take into account a juvenile’s capacity for rehabilitation and how the possibility of parole may give adolescents a reason to change.
Under federal law and in 41 states (Kentucky’s law is under court challenge), children under age 18 who commit serious crimes are automatically considered adults for criminal justice purposes. Currently, approximately 2,500 people are serving life sentences without parole for crimes committed as juveniles; 111 are for crimes other than homicides.
The High Court struck down the death penalty for juveniles in the 2005 Roper v. Simmons case. The court found that the penalty of death was cruel and unusual punishment, in part because teenagers are irresponsible, immature and susceptible to peer pressure and often are capable of rehabilitation. The court cited new studies on adolescent brain development that show juveniles lack the requisite culpability for their crimes.
In 2006, Colorado abolished sentencing juveniles to life without parole. California, Michigan and Congress have considered, but not yet passed, similar measures. Advocates argue that the United States is the only country in the world that sentences adolescents to life without parole, and children who commit crimes should be given a chance at rehabilitation. Opponents argue juveniles need to be held responsible for serious crimes, and that these sentences can keep dangerous people off the streets.
The U.S. Supreme Court is expected to rule soon on Graham and Sullivan.
Tax Credits for Working Families
The long-standing federal Earned Income Tax Credit (EITC) puts cash into the hands of working poor families, and that can benefit local and state economies. The federal program delivered $48.7 billion to low-income workers in 2008. And 22 states offer additional tax credits. But too few people take advantage of the credit.
The amount a family can collect varies depending on income and the number of children. This year, families with one child and income less than $35,463 qualify for up to $3,043; families with two children and income less than $40,295 can receive up to $5,028. Even those without children may be eligible.
State lawmakers can work with their state or local EITC outreach campaigns and include information about the credit in their newsletters and on their websites. They can also encourage constituents to use free tax preparation services. A tax return must be filed in order to receive the credit as a refund.