The election results have been certified, the fiscal cliff has been averted, and the world didn’t end. Now state lawmakers are heading back to their state capitols to begin their 2013 legislative sessions.
States are expected to face many important issues this year, including Medicaid expansion and balancing their budgets. Each year there are a few issues that unexpectedly gain national momentum, as collective bargaining reforms did in 2012.
Here is a list of what I believe will be some of the top state issues to watch for in 2013 (no particular order).
Revenues and spending
Renewable portfolio standards repeal or freezes
Parent Trigger education reform
If you would like any more information about these issues or for Heartland experts to come and speak in your state please email me at [email protected].
This week’s edition of The Leaflet features research and commentary addressing Internet access taxes, the Medicaid “cure,” charter school economics, cybersecurity, high frequency trading, and Pennsylvania’s renewable mandate.
The Internet Tax Freedom Act of 1998 was designed to promote the growth of the Internet by placing a moratorium on state and local taxation of Internet access and the creation of discriminatory taxes on emails and other data. The moratorium is set to expire in 2014.
Despite the moratorium, Internet users in some states still pay access taxes on their Internet service provider (ISP) bills. When the Internet Tax Freedom Act was passed, ten states were grandfathered in and were allowed to tax ISP charges as part of a political compromise. These ten states are Hawaii, New Hampshire, New Mexico, North Dakota, Ohio, South Dakota, Tennessee, Texas, Washington, and Wisconsin.
There has been some confusion about which taxes the moratorium applies to. The only taxes prohibited by the moratorium are fees for Internet access, such as broadband or dial-up services; the moratorium does not exempt Internet sales from general state sales taxes. Critics of increased Internet access taxes argue that allowing these taxes could quickly make ISP bills resemble phone bills, with more and more taxes added and more people being unable to afford Internet access.
The threat of new Internet access fees has come from the Federal Communications Commission and the Connect America Fund. In 2011, the FCC created the CAF by taking $4.5 billion from the Universal Service Fund (USF) designed to provide advanced telecommunications services. Recently the FCC has proposed expanding the CAF by creating a new fee to be tacked onto the bills of all broadband Internet connections nationwide, even though nearly the entire nation (around 95 percent) already has access to broadband.
Internet access taxes would hit broadband users everywhere for billions of dollars of new government spending, placing an unnecessary burden on consumers in order to do something the market is already handling quite effectively. Extending the Internet access moratorium or, better yet, making it permanent would help broadband access and development expand while reducing the need for more government broadband spending.
What We’re Working On
Research & Commentary: The Medicaid “Cure”
Georgia Voters See Reality of Charter School Economics, Approve Schools Measure
Research & Commentary: Cybersecurity
News Story: Pennsylvania Renewable Mandate Crushing State Economy
Join the Legislative Forum
Topic: Education Reform in 2013
Phone number: 312/445-3641
RSVP by emailing Robin Knox at [email protected]