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Yahoo
02-06-2025
- Business
- Yahoo
Proposed federal tax changes could mean $170M or more cut to Missouri state revenues
Missouri Senate Appropriations Chairman Lincoln Hough, right, discusses a budget item May 8 with House Budget Committee Chairman Dirk Deaton during negotiations over the fiscal 2026 budget (Rudi Keller/Missouri Independent). Along with hundreds of millions in potential new costs for Missouri taxpayers, an analysis of the budget bill backed by Congressional Republicans and President Donald Trump shows it would also cut state revenue as tax changes at the federal level are reflected in state returns. Exactly how much is uncertain. The review by Jared Walczak, vice president of state projects at the conservative-leaning Tax Foundation, estimates it will be at least $170 million and could be as much as $429 million if state lawmakers pass tax cuts that mirror provisions in the legislation approved in the U.S. House. Dylan Grundman O'Neill, senior state tax policy analyst at the left-leaning Institute on Taxation and Economic Policy, said Walczak's estimate is sound. O'Neill said he is working to estimate how much Missouri's revenues would be reduced further from the bill's increase in the limit on the itemized deduction for state and local taxes. Cuts to food aid endorsed by Congressional GOP could cost Missouri $400 million The potential reduction in state revenue caused by federal changes, coupled with the new exemption for capital gains income and expanded property tax credit for some retirees and people with disabilities passed by the Missouri legislature earlier this year, could cause the coming fiscal year to be the fourth in a row where revenue growth does not keep up with inflation. And the prospect that those federal tax changes and state tax cuts will put the squeeze on Missouri's budget hangs like a shadow over the legislature as it reconvenes this week to consider whether to set aside almost $1.4 billion in state taxes over the next 30 years to finance professional sports stadiums in Kansas City 'We know the state budget years ahead are going to be challenging, and the amount of general revenue that we have is something that I'm taking very seriously as a businessman, and what it's going to take in future years,' said Missouri Gov. Mike Kehoe. The state budget for the coming fiscal year, awaiting action by Kehoe, would spend $15.8 billion in general revenue while collections are estimated at $13.6 billion. The budget's draw on the state's surplus and uncertainty about future collections is why a spending bill also on the special session agenda has only $50 million more in general revenue, Kehoe said last week. Missouri's state income tax is linked to the federal tax system. The state tax form starts with the adjusted gross income calculated on the federal return and grants filers the same standard deduction. The approximately 10% of taxpayers who itemize deductions are allowed to keep most of what they report to the IRS and add some deductions for Social Security and other payroll taxes. The bill approved by the U.S. House includes a temporary $1,000 increase for the federal standard deduction, $15,000 for single filers this year. That would reduce Missouri revenue by about $124 million, Walczak said. The new deduction for interest on motor vehicle loans would be added to the federal form in a way that reduces the adjusted gross income amount. That change is estimated to reduce state revenue by $46 million, he said. 'They're putting that above the line there,' he said. 'I don't understand why. I don't think anyone knows why they choose to do it this way.' It would require action by state lawmakers to reverse the effect, Walczak said. 'A state could choose to have a modification where they add back the subtracted amount for auto loans, but they would have to choose to do that,' he said. For most taxpayers, income derived from tips and overtime would be exempt from the income tax entirely. Like reversing the auto loan deduction, making Missouri law mirror that benefit would have to be done by the legislature, Walczak said. The two exemptions would reduce Missouri state revenues by about $259 million. 'We put those numbers there because there are states that are saying that they want to follow the federal government and exempt tips and overtime,' he said. 'So we wanted to show what it would cost if they did that.' The change in the $10,000 cap on the deduction for state and local taxes to $40,000 is one of the hardest pieces of the federal bill to estimate, O'Neill said. Federal Medicaid cuts could leave Missouri with huge budget shortfall Before the cap was put in place by Congress in 2017, more than 30% of taxpayers itemized their deductions. When the standard deduction was doubled — and when mortgage loan rates were low — the rate of itemizers plummeted. The deduction covers state and local income and property taxes. Missouri's current tax forms subtract state income tax payments from the amount claimed, for those under the cap, allowing the rest. Itemizers who claim the maximum calculate the share of the tax payments that come from income tax, and subtraction a pro-rated amount from the $10,000 limit. For example, the owner of a home in Columbia that the assessor appraises at $1.5 million pays just under $20,000 in property taxes. If income taxes are 90% of the total state and local taxes included on that person's federal form, the owner would retain a $1,000 deduction for their state return under current law. With the cap increased to $40,000, the taxpayer would retain a $4,000 deduction. The net effect on state taxes would be a $141 cut for that taxpayer. 'The more the congressional bill raises that cap, the more relevant that provision becomes for states,' O'Neill said. 'Missouri is one of the states that has relatively high exposure to that change because of its rolling conformity to the federal tax code.' The Institute on Taxation and Economic Policy estimates that Missouri taxpayers would see their federal tax bills drop by $9.1 billion, with more than one-fifth of that total going to the 1% of Missouri taxpayers who have an income greater than $689,300. Filers in that group would receive an average tax cut of $58,490. Taxpayers in the lowest 40% of filers would receive one-twentieth of the tax cuts under the bill. The new costs imposed by the bill include a possible $400 million annually to maintain the food benefits program known as SNAP. Missouri would have to pick up an estimated 25% of the cost of providing the aid because Missouri's error rate on payments was 10% in 2023, which would mean the highest cost share. Missouri will end the current fiscal year with an unobligated general revenue balance of $2.6 billion, the state budget office estimated when Kehoe's spending proposal was released in January. Even after spending $1 billion of the accumulated balance, it is historically large and almost $900 million more than was predicted a year earlier. Two factors played into that increase — revenues in fiscal 2024 that were almost $300 million more than anticipated and a gap between budgeted amounts and actual costs, mainly due to understaffing. Kehoe's January budget anticipates the surplus would fall to $1.4 billion by the end of the coming fiscal year in June 2026. In the coming special session, Kehoe will be under pressure to allow more money to be spent in the appropriations bill. 'I don't believe that it's the government or the state's job to accumulate a billion dollars to look at in the bank,' said state Sen. Lincoln Hough, the Springfield Republican who chairs the Senate Appropriations Committee. 'I agree with a healthy reserve. I'm fine with that. But this billion and a half dollars that we have sitting in the bank while we've got hospitals that are closing down and child care facilities that need support… it's the whole list of projects.' There should be some allowance for lawmakers to add items to the bill, he said. 'I'm not naive enough to think we're going to put together a $513 million capital improvements package and drop that,' Hough said. The budget revenue estimate made in December anticipates a slight decline in revenue in the current year and a slight increase in the coming year. That estimate was made before lawmakers passed the tax cut worth about $285 million in the coming year by official estimates but forecast to be much more by the Institute on Taxation and Economic Policy. Missouri House Minority Leader Ashley Aune, a Kansas City Democrat, supports the legislation to keep the Chiefs and Royals in the state. She also said there should be more for the appropriations bill. 'We need to be concerned about where we're spending our dollars, but I also think that we have to be doing it responsibly,' Aune said. But she is also concerned about the revenue impact of the federal budget bill and the tax cut awaiting action from Kehoe. 'We are in a position right now where we are seeing revenues dwindling,' Aune said. 'With everything that has been passed recently, it has the potential to put Missouri in a much more difficult position.' SUPPORT: YOU MAKE OUR WORK POSSIBLE
Yahoo
05-05-2025
- Politics
- Yahoo
New KIDS COUNT Factbook outlines what's a stake for vulnerable R.I. kids
Toys sit on a table in an empty Head Start classroom in the Cranston Child Development Center. Enrollment in Head Start has dropped from a decade ago, but the waitlist for the early childhood education program remains long, according to the latest Rhode Island KIDS COUNT Factbook released Monday. (Photo by Alexander Castro/Rhode Island Current) Data-crunching policy and advocacy nonprofit Rhode Island KIDS COUNT presents what it does every year in its 31st annual Factbook scheduled for release Monday: scores of charts, graphs and numbers to illuminate how things have changed for the babies, kids and teens of Rhode Island in the past few years. But as the executive summary for this year's Factbook notes, things are not the same as last year. The new report highlights what could be at stake for kids within the context of sweeping proposals to cut federal social services and programs, like Medicaid, SNAP (Supplemental Nutrition Assistance Program), Head Start, and programs promoting child immunizations and healthy school meals Nearly 50,000 Rhode Island schoolchildren could no longer be eligible for breakfast and lunch at no cost during the school day. The wait list for Head Start early education programs could grow even longer. And the percentage of children living in poverty who visit a dentist each year, already alarmingly low, could continue to drop. 'We must ensure that families will be able to access the programs that help them thrive,' the executive summary states. More than 44,951 children in Rhode Island were on SNAP as of October 2024, with a family of three receiving an average monthly food stamp benefit of $766. Of these SNAP households, 70% made under the federal poverty level of $25,820 for a family of three. National school meal programs are another source of nourishment for kids. In December 2024, 35,314 Rhode Island kids received free breakfast at school, and 75,933 ate free lunch. But the executive summary notes that a Congressional GOP proposal to retool the Community Eligibility Provision would reduce the number of eligible schools in the state, as it would require schools to have a higher percentage of low-income students to qualify. Raising that threshold from 25% to 60%, as the House proposal in February suggested, would reduce the number of students in Rhode Island eligible for free school meals from 98,092 to 49,155. Advocates are also concerned about federal budget proposals targeting programs like Medicaid and Children's Health Insurance Program (CHIP), which together enrolled 117,890 Rhode Island children through the managed care health insurance program RIte Care at the end of 2024. Finally, there's the early education program Head Start, which has shuttered five regional offices, generating unease amongst providers. There were 1,438 children enrolled in Head Start in Rhode Island in October 2024, with 493 children still on a waitlist. In an email Sunday ahead of the report's release, Paige Parks, the executive director of Rhode Island KIDS COUNT, emphasized diversity, equity, and inclusion (DEI) as also being 'under attack from the federal government despite the persistent and unacceptable disparities in child well-being by race, ethnicity, income, disability, language, sexual orientation, gender identity, neighborhood, and zip code.' 'These disparities will continue to persist among children and families if equity and equitable policies and investments are removed and if federally collected data becomes less available,' Parks said. 'We must use data as our compass to address disparities and to ensure all children have the opportunities needed to thrive.' The report adds three new 'indicators' this year — family structure, maternal health and mental health — for a total of 67 categories of insight into the state's youth population. Those indicators are grouped into five major areas of family and community, economic well-being, health, safety and education. The report also breaks down data at the community level, with specific stats for indicators as observed in Rhode Island's 39 communities. 'Communities and neighborhoods do matter — the actions of community leaders, government leaders, elected officials, businesses, faith organizations, and parents greatly influence children's chances for success and the challenges they will face,' the Factbook reads. This year's report clocks in at 198 pages, and as in past editions, spotlights continuing disparities linked to race, income and geography. One example: Rhode Island's racial demographics are gradually becoming less homogenous, and in 2020, about 47% of Rhode Islanders under 18 were people of color, compared to only 28% of adults. Those figures may not represent the state's entire population of children of color either; the Factbook notes that the 2020 Census undercounted the demographic even more than it did in 2010. But poverty, a perennial concern of the Factbook, continues to disproportionately affect this growing segment of the population. While only 7% of Asian/Pacific Islander and white children lived in poverty between 2019 and 2023, 25% of Hispanic children and 24% of Black children lived in poverty. Among American Indian and Alaska Native children, that figure rose to 29%, and 28% among children who identified as 'Some other race.' 'Children in poverty are most at risk of not achieving their full potential,' the introduction states. Between 2019 and 2023, Rhode Island had a 13% child poverty rate, which equated to 27,224 children living in families with incomes beneath the federal poverty threshold. Other data points forming this year's Factbook: Homelessness is up again, as it was last year. Public school officials noted 1,966 children as homeless during the 2023-2024 school year. Since the 2021-2022 school year, the number of students identified as homeless has risen by 35%. Additionally, In 2024, 951 children stayed in shelters or hotels funded by the state's child welfare agency, and 100 children were reported sleeping outdoors for at least one night during January 2025. In 2023, 78% of children were fully immunized by age two — a slight decline from 82% in 2013, but still above the national average of 67%. Meanwhile, vaccine exemptions are rising: 185 kindergartners and 382 seventh graders received exemptions during the 2024–2025 school year, with over 90% citing religious reasons in both grades. Only 47% of children with Medicaid visited the dentist for preventive care in 2023, while 65% of children with private insurance did. That same year, 413 children were treated for dental issues in ERs, and 69 were hospitalized with dental problems. During the 2023–24 school year, schools issued 219 disciplinary actions to kindergarteners, with 182 of them given out-of-school suspensions. Of 9,208 out-of-school-suspensions across all grade levels that year, 54% were for nonviolent offenses. New indicators in this year's Factbook are family structure, maternal health and infant health, which consolidate or replace some previous metrics, including children in single-parent families, grandparents caring for grandchildren, preterm births and low birthweights. The 2025 Factbook is set to debut Monday morning with a breakfast event at the Crowne Plaza Hotel in Warwick. U.S. Sens. Jack Reed and Sheldon Whitehouse and U.S. Reps. Gabe Amo and Seth Magaziner are slated to attend, and Patricia Silva of the futurism-focused nonprofit FutureGood iss scheduled to give the keynote address. Classical High School student Mariah Ajiboye, who is also board co-chair of youth advocacy group Young Voices, is scheduled deliver the youth keynote. SUBSCRIBE: GET THE MORNING HEADLINES DELIVERED TO YOUR INBOX
Fox News
25-03-2025
- Politics
- Fox News
Bondi issues stern warning as DOGE uncovers ‘tremendous amount of fraud' and more top headlines
1. Bondi issues stern warning as DOGE uncovers 'tremendous amount of fraud.' 2. FBI Director Kash Patel sends memo calling CNN report 'entirely false.' 3. How reporter may have been added to Signal national security message, according to a WH official. 'THEY DESTROYED HIM' – Trump signals pardon for businessman 'screwed by the Bidens.' Continue reading … CLOCK'S TICKING – DOGE's new targets scramble to deliver report cards before the bell rings. See video ... THAT BITES – Health alert issued as 18th-century virus spreads among bikini-clad spring breakers. Continue reading … ROT AND ROAM – A real-life horror? Drug causing 'zombie-like' state spreading across America, doctor warns. Continue reading … OFF THE LEASH – Eight-hour flight ruined by nonstop noise — and it wasn't a baby. Continue reading … -- 'IT WILL GO NOWHERE' – Schumer warns any GOP bid to shutter the Department of Education will be DOA in Senate. Continue reading … COURT CLASH – Can Congress defund federal courts with key Trump budget process? Continue reading … 'RIGHT OF ACTION' – Tennessee bill aims to hold charities liable if migrants they house commit crimes. Continue reading … 'HUGE WIN' – NASA reveals astronauts' return 'would not have happened' without Trump's intervention. Continue reading … WRITING ON THE WALL – Trump claims Bezos fretted to him about 'out of control' people at Washington Post. Continue reading … 'JUST SCREAMING' – 'The View' host warns Democrats about how performatively 'screaming' at rallies is not fixing the country. Continue reading … OVERWHELMING EXPECTATIONS – Canada can expect a 'tsunami of illegal immigrants' thanks to Trump policies, professor warns. Continue reading … 'REAL POSSIBILITY' – National Religious Broadcasters urge Florida lawmakers to kill bill to avoid 'lawfare' against Christians. Continue reading … HUGH HEWITT – What is the Congressional GOP waiting for? Continue reading … LIZ PEEK – Trump, Zeldin bring a key ingredient to America's 'green agenda.' Continue reading … -- 'WANT MY VOICE HEARD' – Woman reveals three words real estate tycoon said after alleged assault. Continue reading … BEHIND BARS – Ex-UFC star Cain Velasquez gets prison time for 2022 California shooting. Continue reading … AMERICAN CULTURE QUIZ – Test yourself on famous figures, timeless tales and buzzer-beating basketball games. Take the quiz here … HIS TIME IS NOW – John Cena vows to 'ruin wrestling' in pursuit of WWE title. Continue reading … WILD ENCOUNTER – Woman surrounded by sharks during snorkeling adventure. See video … ELIZABETH BARCOHANA – There's a 'big shift' inside 'deep blue' California areas. See video … KAROLINE LEAVITT – The Democratic Party went woke, now they've gone broke. See video … What's it looking like in your neighborhood? Continue reading… Thank you for making us your first choice in the morning! We'll see you in your inbox first thing Wednesday.
