The second week of veto session is much like the first. Very little is happening as the Legislature, and seemingly more the Senate, is searching for a solution to get enough votes to bring the session to a close.
What is really going on is that budgets are mostly in place, but there is additional revenue required to fund the proposed budgets and school funding. Even though there was a tax increase passed earlier, it was vetoed by the Governor. That put things in something of a tailspin early on and the struggle to regain momentum has been ongoing ever since.
Since the House voted to override that tax increase and the Senate did not override, House leadership decided the Senate should then take the lead on that issue. The Senate is still trying to find enough common ground to pass anything. However, because of the time that has passed it may be difficult to find enough common ground in the House as well.
We keep hearing that the school finance issue will pass out of the committee, but nothing yet. The K-12 budget committee has spent many hours working and reviewing the issue. As it is now, HB 2410 has many similarities to the old funding formula that was abandoned two years ago. The longer the bill remains in the committee, the more complex it gets because of additional amendments. Complexity was one of the reasons cited for abandoning the funding formula. As stated earlier, taxes seem to be the main sticking point. There have been several proposals made, but all have fallen flat. It seems nearly everyone agrees that the LLC exemption, or more properly the non-wage pass-through exemption, has not been particularly effective and should be abandoned. The next point of discussion is whether to have a flat tax, or two or three tiers of income tax rates.
Something most people apparently did not realize is that the rates are progressive, meaning that the lowest rate is paid up to the maximum amount under that rate and then the next rate is effective until someone reaches the maximum rate allowed until the top tier rate is reached.
Wednesday the Appropriations Committee worked the slot machines at race tracks bill. That bill would allow dog and horse racetracks to keep a larger percentage of the take from slot machines and reduce the number of available slots at race tracks as well. I don’t know what is going on with that, but apparently some kind of deal has been struck to allow working that bill.
That’s what happens later in the session as there is more time to work issues of interest to some of the special interest groups. If that were to pass, the State would likely face lawsuits from the existing casinos for breach of contract as the current gaming law is written such that competition is limited by gaming zones. The slots at racetracks bill failed to pass out of the committee.
The Legislature will be adjourned for the Mother’s Day weekend and return on Monday. Since nothing seems to be coming together, House and Senate leadership and the Governor need to huddle and figure out a plan to move forward. Otherwise the stalemate continues without a recognized solution.
If everything goes according to a normal year, we will spend a lot of time waiting around and then suddenly the logjam will break and finish up in a day or two. I realize this report is a little short, but there is not much movement on the several issues remaining. It remains to be seen where we go from here.
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