Archive for the ‘Connecticut’ Category

State Financial Health: Alaska, Dakotas on Top, Illinois, New Jersey, Massachusetts and Connecticut on the Bottom

Tuesday, July 7th, 2015

The Mercatus Center at George Mason University released a study today ranking the 50 states on their financial health. Here are the top six states:

1. Alaska (8.26)
2. North Dakota (2.97)
3. South Dakota (2.84)
4. Nebraska (2.75)
5. Florida (2.74)
6. Wyoming (2.67)

These six states have “Fiscal Condition Index” scores that are significantly higher than all the other states. Of course, where there’s good there’s also bad; here are the bottom seven states:

50. Illinois (-1.86)
49. New Jersey (-1.86)
48. Massachusetts (-1.84)
47. Connecticut (-1.83)
46. New York (-1.49)
45. Kentucky (-1.42)
44. California (-1.41)

Why are states ranked low?

High deficits and debt obligations in the forms of unfunded pensions and health care benefits continue to drive each state into fiscal peril. Each holds tens, if not hundreds, of billions of dollars in unfunded liabilities—constituting a significant risk to taxpayers in both the short and the long term.

Think unfunded pensions and you have one of the huge issues facing states. Illinois leads the way (which isn’t a good thing for the Land of Lincoln). There’s a reality: Whatever you make, spend less. Some states follow that creed; others give it lip service. California may have a “surplus,” but when you look at unfunded pensions things don’t look so good. Sooner or later, that bill will come due.

It’s an interesting analysis, and well worth your perusal.

Ledyard 3, Mashantucket Pequots 0

Sunday, August 11th, 2013

Back in mid-July the 2nd Circuit Court of Appeals ruled on an interesting case regarding tribal sovereignty at Indian casinos. The case pitted the country’s largest casino, Foxwoods, against the town of Ledyard and the State of Connecticut. The issue: Could Ledyard and Connecticut levy a personal property tax on non-tribal vendors who lease slot machines to Foxwoods? The original court decision held that various laws prevented Ledyard and Connecticut from imposing the tax on tribal vendors. However, the 2nd Circuit unanimously reversed the decision.

The main issue is whether or not the federal laws, such as the Indian Gaming Regulatory Act (IGRA) prohibits the tax. The court held that the interests of the state and town outweigh the federal interest.

The tax, imposed on non-Indian vendors, is likely to have a minimal effect on the Tribe’s economic development. While IGRA seeks to limit criminal activity at the casinos, nothing in Connecticut’s tax makes it likely that Michael Corleone will arrive to take over the Tribe’s operations.

Or, as the court put it,

The Town and State have more at stake than the Tribe. The economic effect of the tax on the Tribe is negligible; its economic value to the Town is not. The Tribe’s sovereign interest in being able to exercise sole taxing authority over possession of property is insufficient to outweigh the State’s interest in the uniform application of its generally-applicable tax, particularly where, as here, there is room for both State and Tribal taxation of the same activity.

Ledyard has begun to again receive tax payments. The other question is will the Pequots appeal to the Supreme Court or ask for an En Banc appeal to the entire 2nd Circuit? We’ll know the answer to that question soon.

Hat Tip: Victor Rocha

Bad States for Gamblers

Monday, October 22nd, 2012

It’s been a while since I’ve listed out the bad states for gamblers. Here’s an updated list. Make sure you read the notes because while all of these states have tax systems that are problematic for gamblers, some impact amateurs while others impact professionals. Note that I do not cover the laws that impact gambling here (such as Washington State’s law that makes online gambling a Class C felony).

Connecticut [1]
Hawaii [2]
Illinois [1]
Indiana [1]
Massachusetts [1]
Michigan [1]
Minnesota [3]
Mississippi [4]
New York [5]
Ohio [6]
Washington [7]
West Virginia [1]
Wisconsin [1]

NOTES:

1. CT, IL, IN, MA, MI, WV, and WI do not allow gambling losses as an itemized deduction. These states’ income taxes are written so that taxpayers pay based (generally) on their federal Adjusted Gross Income (AGI). AGI includes gambling winnings but does not include gambling losses. Thus, a taxpayer who has (say) $100,000 of gambling winnings and $100,000 of gambling losses will owe state income tax on the phantom gambling winnings. (Michigan does exempt the first $300 of gambling winnings from state income tax.)

2. Hawaii has an excise tax (the General Excise and Use Tax) that’s thought of as a sales tax. It is, but it is also a tax on various professions. A professional gambler is subject to this 4% tax (an amateur gambler is not).

3. Minnesota’s state Alternative Minimum Tax (AMT) negatively impacts amateur gamblers. Because of the design of the Minnesota AMT, amateur gamblers with significant losses effectively cannot deduct those losses.

4. Mississippi only allows Mississippi gambling losses as an itemized deduction.

5. New York has a limitation on itemized deductions. If your AGI is over $500,000, you lose 50% of your itemized deductions (including gambling losses). You begin to lose itemized deductions at an AGI of $100,000.

6. Ohio currently does not allow gambling losses as an itemized deduction. However, effective January 1, 2013, gambling losses will be allowed as a deduction on state income tax returns. Unfortunately, those gambling losses will not be deductible on city or school district income tax returns, so Ohio will remain a bad state for amateur gamblers.

7. Washington state has no state income tax. However, the state does have a Business & Occupations Tax (B&O Tax). The B&O Tax has not been applied toward professional gamblers, but my reading of the law says that it could be at any time.

Today Is the Day to Prepare (Hurricane Irene)

Thursday, August 25th, 2011

If you are a resident of New Jersey, New York City/Westchester County/Long Island, Connecticut, Rhode Island, or Massachusetts, you need to drop what you’re doing and get prepared for Hurricane Irene. Now.

Maybe we’ll get lucky and Hurricane Irene will veer out to sea. However, the current forecast track map puts Irene directly over the New York metropolitan area on Sunday. Unfortunately, there is no reason to think that Irene will veer away; the recent forecast maps have moved Irene toward the west rather than the east.

Hurricanes don’t strike New York City often, and I suspect residents of the Big Apple think this might be just another storm. The effects, though, of a direct hurricane strike might be truly horrifying: Flooding the subway system for weeks to months, devastation along the Long Island shore, flooding in lower Manhattan, millions without power, etc.

If you reside in a low-lying flood-prone area in the Northeast threatened by Irene, consider taking action today. The moment that government authorities announce possible evacuations, people will panic. Buy your supplies now. The National Hurricane Center has links to preparedness guides.

Again, I am hopeful I’ll be looked at in a week as a fear-monger. I just remember the last time I saw such a map, and the disaster that occurred (Katrina). I also remember a saying from my mother: Better safe than sorry.

Edit:
Some Resources:
National Hurricane Center (Irene Home Page)
Dr. Jeff Masters’ Blog
Ryan Maue’s Twitter Feed
Brendan Loy’s Blog

And, most importantly, your local office of emergency preparedness.

Hopefully, my writing this post is much ado about nothing. I just don’t like what I’m seeing on the maps.