Regarding Senate actions on HB155 - a House Bill to lower the Business Enterprise Tax (payroll tax) from .055 to .05 ( at a cost of $26m in State Revenues).
I introduced an amendment instead to lift the filing threshold for the Business and Enterprise Tax from $298,000 to $375,000.
That move will cost the state $2 million in revenue but would now exempt 2,000 small businesses, who currently pay the tax, from doing so in the future.
This is targeted tax relief to help our small businesses only.
Those smallest of businesses, our neighbors with in-home type businesses, the ones hit the hardest by tariffs, inflation, rising energy prices, and interest rates, will now not ever have to file.
In my opinion, given the revenue structure and revenue concerns that we are in right now, I think that lowering the rate would be a fiscally imprudent thing to do, but we can still help.
I also co-sponsored another amendment to the bill, that would spend $2.5m of the Medicaid Expansion Tax Surplus (coming in with about $3.5m surplus this year and by design this tax can only be spent on Medicaid programs) to help stabilize the Medicaid Long-term Care per diem rates in our nursing homes across the state. Every 6 months this rate is adjusted. It looks like this most recent formula rate change would increase costs on County Nursing Homes, thus increase your county property taxes. So I supported the spend, to help keep your county property taxes from increasing.
Both of these amendments were good and fiscally sound tax policy decisions.
The vote on the bill, as amended with the above 2 amendments, was unanimous 5-0, and The bill, as amended, will be on the Senate floor for a full Senate vote on 5/7.
I will note - state revenues are rebounding so far, as I predicted in the beginning of this budget cycle, but gone are the days of $500m surpluses. We are currently $90m above the state's revenue plan with another week in April (our biggest revenue month) for revenues to come in.
However, there were some off budget spending approvals by the Fiscal Cmte to the tune of $20m so stand-by and I know we have a future request from the Dept of Corrections for adding $8m in overtime due to shortages in correctional officer staffing.
I'll be keeping a close watch on these revenues (and off budget spending), but if the trend continues we will be in good shape by the end of this budget cycle, allowing us to accelerate paying back the Rainy day funds for monies we needed for this budget cycle to balance the budget due to the inflationary impacts of the Biden Administration's economic policy decisions in 2022-24.