Colorado Likely to Vote on Income and Sales Tax Increases
By Josh Goodman, Staff Writer
BANKRUPTCY FALLOUT: Days after Central Falls, Rhode Island, filed for bankruptcy, federal court proceedings are underway, the Providence Journal reports . The struggling city of just under 20,000 has been under the control of the state since last year because it has lacked the money to pay its bills. Robert G. Flanders Jr., the state receiver, filed for bankruptcy on behalf of the town last week. One of the key legal questions to be resolved is whether the court will accept Flanders' plan to cut pension benefits for current retirees. Other courts have permitted reductions in promised cost-of-living increases, but Flanders' proposal goes further than that, cutting base pensions by as much as 50 percent.
NORTHERN LIGHT: After being hit hard by the recession, Alaska 's Permanent Fund — the savings account used to write state residents a check each year — is thriving, the Juneau Empire reports . The fund had $40 billion at the end of the fiscal year that concluded June 30. That figure represented 20 percent growth from a year earlier, as the fund capitalized on stock market gains. The state will announce in September how large the checks to Alaskans will be for this year.
ANOTHER BITE: West Virginia already reduced its sales tax on food earlier this year; now Acting Governor Earl Ray Tomblin wants to eliminate it entirely. Tomblin's plan could end the tax starting in 2014, but only if the state boosts its fiscal reserves, the Charleston Daily Mail reports . Under the proposal, the tax would disappear if a state rainy day fund equaled 15 percent of the state budget. Currently, the fund is at 12.6 percent. Under previously passed legislation, the tax will drop from 3 percent to 2 percent starting January 1.
CUTTING BACK: Expecting more fiscal challenges ahead, Maine Governor Paul Lepage is asking for $100 million in mid-year budget cuts, the Bangor Daily News reports . The $6.1 billion two-year budget the state passed earlier this year was said to carry a $25 million deficit, and by the time it passed LePage had assembled a task force to identify that amount in savings. Now, he's upping the figure to $100 million, saying it's necessary to identify more cuts because Congress' debt deal will reduce federal funding for states.