On March 19 we launched a tracker providing a repository of information related to state fiscal policy responses to COVID-19. We are updating the tracker frequently and will be using the Tax Foundation blog to summarize new developments and provide analysis of relevant trends as they emerge. This post is part of that series. Past Updates: March 25 and March 24
Progress on State Budgets for Fiscal Year 2021
Since yesterday’s update, states have started making announcements signaling how the economic effects of COVID-19 might alter the state budget process for fiscal year (FY) 2021. The California Department of Finance on March 24 sent a notice to legislators tempering any expectations of full funding for new or existing policy proposals, while suggesting this year’s state budget schedule and underlying revenue assumptions will need to be revisited. In addition, the Illinois Commission on Government Forecasting and Accountability has released a new budget forecast for fiscal years 2021-23. It is too early for anyone to know how severe the economic impact of this pandemic will be, but the Commission’s preliminary estimates suggest a COVID-19-induced recession could result in a revenue hit to the state of anywhere between $2 billion and $8 billion, likely spread out over multiple fiscal years.
State Legislative Session Changes
Since our last update, two states with coronavirus-related legislative session suspensions have pushed their next legislative meeting date further into the future. Connecticut has postponed its next legislative meeting day to April 13 after initially postponing to March 30. Michigan legislators initially planned to resume meeting March 25 but have postponed their next meeting day to April 1.
Colorado’s next scheduled legislative meeting day is March 30, but further postponement is looking increasingly likely. Lawmakers have asked the Colorado Supreme Court to issue an opinion as to whether this year’s legislative session can legally extend beyond its scheduled adjournment date of May 6. It is unclear how soon the court will make its determination.
Income Tax Filing and Payment Deadline Changes
As of yesterday afternoon, 34 states and the District of Columbia have extended their income tax deadlines, with all but five matching the July 15 federal deadline. Of the states not matching the federal deadline, two states (Hawaii and Iowa) have deadlines that are more generous than the federal deadline, and three states (Idaho, Mississippi, and Virginia) have deadlines that are less generous than the federal deadline.
Among the 43 states (plus the District of Columbia) that impose taxes on wage income, all but seven (Illinois, Louisiana, Maine, Massachusetts, Michigan, Ohio, and West Virginia) have extended their payment and/or filing deadlines. In many states, the executive branch has been able to extend these deadlines under existing authority or under emergency powers, without the involvement of the legislature. In Ohio, however, where the governor lacks this authority, the legislature unanimously passed a bill, which Gov. Mike DeWine (R) said he will quickly sign, extending the income tax filing deadline to July 15 and waiving the unemployment benefits waiting period, among other provisions.
Other Tax Filing and Payment Deadline Changes
In addition to the many states that have postponed their income tax deadlines, at least 13 states have announced the deferral of other major tax due dates, such as for sales, property, and alcoholic beverage excise taxes, with many postponing March and April deadlines to June. However, some states have been more hesitant in extending tax deadlines. Mississippi has extended it income tax deadline to only May 15, citing concerns that extending the deadline into the next fiscal year would leave the state with a budget shortfall in the current fiscal year. Similarly, Oregon has moved its income tax deadline to match the federal deadline but has announced its new Corporate Activity Tax (CAT) will still be due April 30.
Original Article Posted at : https://taxfoundation.org/michigan-postpones-legislative-session-california-budget-forecast/