Federal Budget and Taxation Committee 2000 Annual
Meeting Summary July 15 - 20, 2000
Updated September 7, 2000
NCSL's Annual Meeting was held from July 15-20 at the Sheraton Chicago
Hotel and the Navy Pier Convention Center in Chicago, Illinois. Prior to
the start of the meeting, several members of the Federal Budget and
Taxation Committee participated in the eighth meeting of the Executive
Committee Task Force on State and Local Taxation of Telecommunications and
Electronic Commerce on Friday, July 14 and Saturday, July 15.
Members of the Federal Budget and Taxation Committee participated in
the following sessions:
Mandatory Social Security Coverage of State and
Local Government Employees: the 10% Solution or a $25 Billion Unfunded
Mandate? Approximately 25 percent of state and local government
employees do not pay into the Social Security system; instead, these
workers contribute to government retirement plans. The recent debate on
how to shore up Social Security has included proposals to extend mandatory
coverage to all newly hired state and local employees. This session served
as background for committee adoption of a new policy, which was
subsequently approved at the annual NCSL Business Meeting. Speakers for
this session included:
Covering Our Assets: Maintaining State Authority Over
Public Pension Regulation and Taxation. Since the 1980's, state
and local governments have faced constant efforts by Congress and the
executive branch to tax and regulate public pension funds and benefits.
NCSL policy, on the other hand, has maintained that state law and
regulation best protect state retirement systems, assets and employees.
This session provided background for committee renewal of a policy on this
topic, which was subsequently approved at the annual NCSL Business
Meeting. Speakers for this session included:
Nexus in Cyberspace. Since 1967, states have been
unable to collect sales and use taxes for phone and mail order purchases
made through out-of-state vendors. The U.S. Supreme Court has determined
that a vendor must have sufficient "nexus" in a state for that vendor to
be required to collect the state's sales and use taxes. Before the
Internet boom, it was estimated that states were losing about $4.5 billion
in sales and use tax revenues due to phone and mail order sales. The
growth of electronic commerce is expected to vastly increase the loss to
state treasuries. In this joint session with the AFI Commerce and
Communications Committee, Scott Mackey, Chief Economist for NCSL,
explored the nexus issue and provided background for joint adoption of a
new policy, which was subsequently approved at the annual NCSL Business
Meeting.
The Great Rebate Debate. Economic good
times have prompted a growing number of states to refund excess tax
revenues. This roundtable session explored state experiences with and the
pros and cons of tax rebates. This session was sponsored by the ASI Fiscal Affairs
Committee. Speakers included:
The Road Less Traveled: Innovative Transportation
Funding. This joint session with the AFI Energy and
Transportation Committee, the ASI Fiscal Affairs
Committee and the NCSL Transportation
Program highlighted innovative transportation finance methods using
state and federal funds. Speakers included:
See also this full summary
prepared by the ASI Fiscal Affairs Committee.
Federal Budget Disco. The budget debate in
Washington is in a state of flux now that surpluses have replaced
deficits. Not only is the budget process that was designed to reduce the
deficit no longer applicable to the decisions that have to be made, but
representatives and senators find themselves totally perplexed by the new
politics of federal spending, taxing and debt reduction. In this joint
session with the ASI Fiscal Affairs Committee, Stanley E. Collender,
Senior Vice President of Fleishman
Hillard, explored what is happening and why, and what that
means for continued state-federal program support. Marcia Howard,
Director of Federal Funds
Information for States, provided further details on the specifics
of federal proposals affecting key state-federal programs.
Telecommunications in the 21st
Century: More Than Just a Phone! The mergers of
major industry providers and the convergence of telephone, Internet, data
transmission and cable television services is challenging the way states
have traditionally regulated and taxed phone and cable services. Speakers
for this joint session with the AFI Commerce and
Communications Committee included:
Public Pension Innovations in the States.
Tight labor markets, an increasingly mobile workforce, concerns
about the solvency of Social Security and the brain drain that occur as
baby boomers transition out of the workforce have created new challenges
for state policymakers in formulating pension policy. This session
explored state innovations in providing retirement savings for their
employees. It also included an update on pending federal legislation that
would provide increased portability of pension assets and relief from
federal tax policy provisions that limit the states' ability to be
innovative. Speakers included:
What's Up With Gas Prices? Consumers around the
country are demanding relief from gasoline prices that are reaching record
highs. Is the price problem overstated? Will gas tax reductions help? This
session reviewed the makeup of gas prices, took a look at supply and
demand issues, and considered the pros and cons of gas tax reductions.
Speakers for the session included:
The Costs and Coverage of Pharmaceuticals. Drug
companies are under attack for high prices. Yet many "miracle" drugs
ultimately save millions of dollars by preventing more drastic problems or
interventions. Nonetheless, high prices leave some people without needed
prescriptions, while state budgets feel the impact of rising Medicaid
costs. States have proposed both modest and controversial solutions. At
this session, legislators discussed these issues and addressed proposed
solutions. Speakers included:
- Representative
Nancy Argenziano
Chair, Elder Affairs and Long
Term Care Committee, Florida
- Senator
Catherine Cook
Assistant Republican Leader,
Connecticut
- Senator Angela
Monson
Chair, Finance Committee, Oklahoma
- Senator
Chellie Pingree
Majority Leader, Maine
- Senator
Sandy Praeger
Chair, Public Health and Welfare
Committee, Kansas
- Senator Peter Shumlin
President Pro Tem, Vermont
- Senator
Jackie Speier
Chair, Insurance Committee,
California
The Digital Economy, the Internet and State Taxation.
The rapid development of commerce over the Internet raises
fundamental federalism questions and could threaten the long-term
viability of state and local governments. Electronic commerce also
presents state and local officials with the opportunity to simplify and
modernize their revenue systems. This panel reviewed both the threats and
opportunities posed by the expansion of electronic commerce. Speakers
included:
Taxing Telecommunications. On the whole,
the telecommunications industry files 55.748 state and local tax returns a
year. The present telecommunications tax structure dates back to the era
of the great Ma Bell monopoly. The monopoly no longer exists, but the
taxes do. Unless states begin to simplify telecommunications taxes, the
providers may find new ways to reduce their tax and administrative burden
through structural changes or even seek federal preemptive relief. This
session provided an overview of the major telecommunications tax reform
proposals. Speakers included:
- Scott Mackey
Chief Economist, NCSL
- Bruce Yancey
Bell
South, Georgia
When School Lets Out: State Support of After-School
Programs. Preventing crime, promoting school success, developing
job skills at a young age, and supporting parents: many state legislators
consider these factors when they turn to after-school programs, many of
which are linked to public schools. This session explored the funding,
structures, quality levels and effects of these policies. Speakers
included:
Legislatures and Performance Budgets.
Legislatures are still enthusiastic about the value of performance
budgeting, but it's turned out to be hard for lawmakers to integrate into
their budget practices. This session examines what actually happens when
legislators try to turn their budgets into performance budgets - the
obstacles they meet, the success stories, and why it has been so hard to
adopt what sounds like a common-sense reform. Speakers included:
The Economies of Tobacco: Myths and Realities.
Interest in, even obsession with, the economics of tobacco
reflects the old adage that "money talks." Session speakers debated
economic arguments used by the tobacco industry, the public health
community and tobacco growers. Fallacies underlying various economic
arguments were presented and challenged. Areas of discussion included: 1)
tobacco's role in a nation's, or region's economy; 2) economic hardships
of specific tobacco control policies in non-tobacco industries; 3) fiscal
burdens of health care costs to treat smoking-caused diseases and reduced
productivity; 4) tax implications on government revenues and legal
cigarette sales; and 5) whether or not advertising and other forms of
promotion affect smoking decisions. Speakers included:
- Dr. Kenneth E. Warner, Ph.D.
Director of
Tobacco Research Network, Department of Health Management and Policy,
School of Public Health,
University of Michigan
- Rebecca H. Reeve, Ph.D., C.H.E.S.
Program Manager,
Evaluation and Development, Institute for Quality Health, University of Virginia,
Health Services Foundation
What's Ahead for the Economy? In February, the
United States set a new record for the longest economic expansion in its
history. This red-hot economy has boosted state finances to their
healthiest level in two decades. How long can this robust economy last?
This session featured nationally renowned economist David Wyss of Standard
and Poor's, who addressed these and other economic questions.
For more information, contact Gerri Madrid, Committee Director
or Alysoun McLaughlin,
Policy Associate with the Federal Budget and
Taxation Committee.
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