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Low-Income Tax Relief, California Health Care and Public Financing in Washington

Low-Income Tax Relief, California Health Care and Public Financing in Washington

Thursday, January 31st, 2008

http://www.progressivestates.org/dispatch

Strengthening-Communities

Toxic Toys Update

Conference Call

 Federal Stimulus Conference Call

Congressman Barney Frank, Chairman of the House Financial Services Committee, will join the Progressive States Network and the Economic Analysis and Research Network on a national conference call for state legislators and advocates to discuss how any federal stimulus and other anti-recession plans for the year may impact states and their state budgets. He will be joined by other policy leaders to discuss what is being negotiated in the current package and what other actions by the federal government will be needed to rejuvenate state economies and budgets.

The call will be held:
Monday, February 4th, at 3:30pm EST

Please RSVP at http://tinyurl.com/385haw

or
http://salsa.democracyinaction.org/o/1665/event/index.jsp?event_KEY=36673

Rewarding-Work

BY Nathan Newman

Tax Relief to Help Low-Wage Washington Residents

Because it lacks a state income tax, Washington State creates one of the highest tax burdens on poorer families, but some relief is being proposed, as the Washington State Budget & Policy Center outlines in this policy brief, in the form of a Working Families Credit which would give 350,000 Washington residents the equivalent of 10% of their federal Earned Income Tax Credit (EITC) refund.

This would reduce the tax bill for low-wage Washington workers by as much as 30% and, in combination with the federal credit, boost a minimum-wage worker's earning by up to 31%.  If enacted, this would make Washington the first state without an income tax to enact an EITC.

Twenty-three states have enacted EITCs, and Washington will be joined this year by efforts in Connecticut, Kentucky, and Pennsylvania.  Maryland during its recent special session expanded the refundable part of its EITC from 20% of the federal EITC up to 25%.  Pennsylvania is debating a 30% EITC that has been larded up with business tax giveaways that has dismayed advocates who worry about lost revenues and plan to support an unamended version in the state senate. Colorado has an EITC that is only distributed in certain years under the state TABOR law, so advocates are working to create a more consistent EITC for working families in the state.

State Earned Income Tax Credits are one of the most important tools for offsetting the regressive tax structures of most state tax systems, so this progress is encouraging.

More Resources

Valuing-Families

BY Adam Thompson

California Health Care Reform - Momentum Stalled

After more than a year of negotiation, compromise, and ample national attention, major health care reform in California was dealt a seemingly lethal blow on Monday.  The compromise health care measure,  ABX1 1, was rejected by the Senate Health Committee by a none-too-subtle 7 to 1 vote.  The reform, which resembled the 2006 Massachusetts law, was largely crafted by Speaker Nunez and the Governor after an earlier version was vetoed by Schwarzenegger in September.   Senate President Pro Tem Perata, while a participant in negotiations throughout, never came to fully back the latest measure. 

The $14.9 billion package had passed the Assembly on a party-line vote in December but was given a tepid reception by Senate Democrats amid concerns of the ballooning $14.5 billion state deficit and frustrations from some that negotiations with the Governor had weakened the measure too far.  Additionally, a report by the Legislative Analyst's Office found that the reform could be in the red by more than $1.5 billion within five years.

Like the 2006 Massachusetts reform law, ABX1 1 sought to fill the gaps in coverage created by the current disjointed and inefficient health care system composed of multiple payers, for-profit insurers, uncoordinated provider systems, and multiple insurance markets.  It employed many of the same features as Massachusetts, such as an insurance connector to bring more affordable options to market, robust Medicaid expansions, premium subsidies to help some families afford coverage and an employer "pay or play" requirement.  Similarly, the measure included an individual mandate but had stronger affordability protections than Massachusetts.  Subsidies in the form of a refundable tax credit would be provided to families with incomes up to 400% of poverty if premiums exceeded 5.5% of income, versus sliding scale premium subsidies up to 300% in Massachusetts.  However, like Massachusetts, there were no specific caps on potential out-of-pocket expenses, a major concern to some health care advocates who opposed the individual mandate. 

Still, the Massachusetts plan, despite its problems including a projected $645 million in cost overruns over the next two years, has provided coverage to 300,000 residents who were previously uninsured.  With 5 million uninsured in California, health care advocates in California are regroupingand will work to move forward with reform. 

Impact in Other States and National Debate:  The lesson from California is not that states can't make progress on health care reform, but that limited reforms often don't achieve the cost savings needed to help pay for expanded coverage.  

States are continually ratcheting up reform by learning from each other.  California would have gone several steps further than Massachusetts by requiring more robust employer participation and providing stronger affordability protections.  The Healthy Wisconsin approach to reform that is gaining traction in states, including Washington, represents a new standard by creating a more coordinated health care system, pooling residents' purchasing power, cutting unnecessary spending out of the system, and enhancing what Americans value most in health care - choice, control, patient-doctor relationships, access and quality.   

There is plenty the federal government can do to help states aside from enacting a national health plan; these include relaxing ERISA restrictions that limit states' ability to regulate self-insured and multi-state corporate health plans and passing a far reaching expansion of the State Children's Health Insurance Program.  Still, states must continue to lead on health care and fill the void created by federal inaction.

More Resources

Increasing-Democracy

BY J. Mijin Cha

Washington House Passes Public Financing for Local Offices

In the wake of a bitter 2004 Governor's election and state Supreme Court races that took in more money from third-party groups than any other high court campaign in the country, Washington State's House took the first step toward public financing by passing HB 1551. Introduced by Senator Joe McDermott, HB 1551 allows cities, counties, and other jurisdictions to provide local candidates with government financing.  The bill only allows local taxes to be tapped for the public campaign accounts and the public funds cannot be used for campaigns for state offices or school boards.

As we highlighted before, public financing is essential to maintaining fair and equitable elections. Arizona and Maine have clean elections for all campaigns, North Carolina and New Mexico have clean elections for specific offices.  New Jersey's pilot clean elections program successfully showed that candidates' focus on issues was greater in public funded districts than the rest of the states and 16 of 20 total candidates participated in public financing, including all nine of the winning candidates.  The program is up for re-authorization with calls for expansion to full public financing.  A complete public financing bill is also active in the Washington House.  Introduced by Rep. Mark Miloscia, HB 1360 calls for public financing for state all offices.

More Resources

Strengthening-Communities

BY J. Mijin Cha

Toxic Toys Update

Our Dispatch and conference call last week highlighted ways in which states can fight toxic toys.    In case you missed it, the audio of the call can be found here.  Within a few days, several  states came forward with additional bills protecting the health of our children, including:

Banning Phtalates

Others

  • Connecticut will introduce a bill when their legislature comes back in session next week called An Act Concerning Safe Toys
  • Florida SB 886 requires toy manufacturers to certify toys are in compliance with federal safety standards
  • Hawaii HB 2449/ SB 2239 prohibits manufacturing, sale or distribution of toys and child care articles containing certain toxic chemicals and requires the use of the least toxic alternatives.
  • Nebraska, LB 835 bans the use or application of toxic substances in or on any toy or for children's use in play.
  • Rhode Island HB 7098 adopts the Maine approach by requiring identifying and reporting of priority chemicals and requiring safer alternatives.

More Resources

Research Roundup

Instead of expanding state funds for unemployment insurance and other local funding that would help working families, President Bush is still locked into an ideology that prefers tax giveaways to business, as the Drum Major Institute argues in their analysis of this year's State of the Union address

The Economic Policy Institute highlights the fact that in 2007, 1.2 million people were unemployed for longer than six months, with Michigan having the highest long-term unemployment rate of 1.7%. EPI emphasizes why extending unemployment is so critical in both helping these families and strengthening the economy in states suffering the highest job loss.

In What We're In For: Projected Economic Impacts of the Next Recession, a report by the Center for Economic and Policy Research argues that even a mild recession would add 3.2 million workers to the unemployment lines by 2010, while a severe recession would add 5.8 million unemployed.

Union membership increased as a percentage of the working population for the first time in twenty-five years, according to the Bureau of Labor Statistics, with unions adding 310,000 members last year.

Moderate and lower-income households pay over $8 billion in fees to non-bank check cashing and short-term loan providers, a costly loss to such families that could be avoided if they were directed into lower cost banking options, according to a new report by the Brookings Institution. In fact, the savings to a full-time worker without a checking account could be as much as $40,000 during his or her career, which if directed into savings and investments would add up to $360,000 over a career.


Please email us leads on good research at research@progressivestates.org

Resources

Tax Relief to Help Low-Wage Washington Residents

Washington State Budget & Policy Center - A Working Families Credit for Washington State

State EITC Online Resource Center

Center on Budget and Policy Priorities - A Majority of States with Income Taxes have Enacted State Earned Income Tax Credits

Center on Budget and Policy Priorities - 2008 Tax Credit Outreach Toolkit

Brookings Institution - EITC Data by State Legislative District

California Health Care Reform - Momentum Stalled

Health Access California - 2007-08 Health Reform Debate and Weblog

California Healthcare Foundation - CalHealthReform.org

Progressive States Network - California Assembly Advances Health Care Reform, Future is Uncertain

Progressive States Network - Will Special Session Yield California Health Care Reform?

Progressive States Network - California: The Health Care Debate is On

Progressive States Network - Individual Health Care Mandates and the Problem of Affordability

Washington House Passes Public Financing for Local Offices

WA - HB 1551, HB 1360

Arizona Clean Elections

Maine Clean Elections

North Carolina Voters for Clean Elections

Public Campaign - New Jersey Clean Elections Pilot Wins Big

Washington Public Campaign

Toxic Toys Update

Progressive States Network - Protecting Our Children: States Take Action Against Toxic Toys
Progressive States Network - toxic toys conference call audio
Washington Toxics Campaign - Healthy Toys
United Steelworkers - Stop Toxic Imports

Masthead

The Stateside Dispatch is written and edited by:

Nathan Newman, Policy Director
J. Mijin Cha, Policy Specialist
Adam Thompson, Policy Specialist
John Bacino, Operations Manager

Please shoot us an email at dispatch@progressivestates.org if you have feedback, tips, suggestions, criticisms, or nominations for any of our sidebar features.

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