Economics and Finance

On Jan. 14, the U.S. Department of Justice issued a memo that reinterpreted a 1961 law designed to combat organized crime involvement in gambling. The Wire Act of 1961 specifically applies to anyone “in the business of betting or wagering” who “uses a wire communication facility for the transmission in interstate or foreign commerce of bets or wagers or information assisting in the placing of bets or wagers on any sporting event or contest.” Evolving telecommunications technology raised questions about the law’s applications, especially once online lottery sales became feasible.
In 2009, the New York State Lottery Division and then-Illinois Gov. Pat Quinn wrote to the DOJ separately to ask for clarification concerning interstate transmission of lottery data. New York argued that all lottery tickets would be bought and sold within the state, but that transaction data may be rerouted to data centers in other states to deal with heavy network traffic and weather issues. They also pointed out that New York had used this system since 2005, and over 40 state lotteries used similar systems. Quinn explained that their state lottery was a pilot program implemented to avoid “an unprecedented fiscal crisis,” and the program was “a key part of the State’s strategy to address this crisis and raise additional revenue to fund critical state programs…”

CSG Midwest
The U.S. Tax Cuts and Jobs Act, which became law in December 2017, included a $10,000 cap on the deductibility of state and local taxes from federal taxes, the so-called “SALT deduction.” Prior to the 2018 tax year, there was no cap on the deductibility of state and...

The issue the Supreme Court will decide in McDonough v. Smith is whether the statute of limitations for a due process fabrication of evidence claim begins to run when the criminal proceedings terminate in the defendant’s favor, or when the defendant becomes aware of the tainted evidence and its improper use.

Edward McDonough, former Democratic Commissioner of Rensselaer County Board of Elections, approved forged absentee ballot applications which he claims he didn’t know had been falsified. Youel Smith investigated and prosecuted McDonough. McDonough claims Smith “engaged in an elaborate scheme to frame McDonough for the crimes by, among other things, fabricating evidence.” After two trials, McDonough was ultimately acquitted.

Just before three years passed since McDonough was acquitted he sued Smith under Section 1983 for violating his due process rights by fabricating evidence and using it against him. Section 1983 allows citizens to sue state and local government officials in federal court for constitutional violations.

In The Law of Trusts and Trustees, George Gleason Bogert describes trusts as a “legal abstraction: a fiction created to represent the tripartite relationship among a settlor, a trustee, and a beneficiary.” The debatable location of a trust makes it difficult for courts to agree which jurisdictions may tax a trust’s income. For example, what if only a trust beneficiary is located in the state, may the state tax the trust’s income? 

In North Carolina Department of Revenue v. The Kimberley Rice Kaestner 1992 Family Trust the Supreme Court will decide whether the Due Process Clause prohibits states from taxing trusts based on trust beneficiaries’ in-state residency.

CSG Midwest
State fiscal conditions were the focus of several recent national studies — here are some of the key findings for the Midwest.

Ohio Gov. John Kasich signed SB 255 on Friday which puts an expiration date of 6 years on all state licensing boards unless they are renewed by the legislature. Prior to a board’s end date, the board must present to standing committees so that lawmakers can evaluate the usefulness, performance, and effectiveness of the board. Each board will have the burden of proof to demonstrate there is a public need for its continued existence. The...

A focus on serving the logistics sector is in part responsible for the business expansions and additions that have brought record job growth to Kentucky in recent years, a state transportation official told attendees at the CSG National Conference in December.

Eight states have launched projects aiming to provide opportunities for people who experience mid-career disabilities to remain in and return to the workforce. After a competitive selection process, the U.S. Department of Labor’s Office of Disability Employment Policy in partnership with DOL’s Employment and Training Administration and the Social Security Administration awarded eight states with funding for RETAIN Demonstration Projects.
The goal of RETAIN, or Retaining Employment and Talent after Injury/Illness Network, Demonstration Projects is to test the impact of early intervention strategies that improve stay-at-work/return-to-work outcomes. Stay-at-work/return-to-work initiatives provide timely and effective supports and services that allow employees to remain in the workforce and avoid long-term unemployment. Keeping people engaged in the workplace benefits all stakeholders including the employee, employer and state.

State legislators and government agencies from Hawaii hosted an "Empowering All Abilities" Job Fair for persons with developmental disabilities on Oct. 30 at the Hawaii Capitol. During the fair, each job seeker had a table set up with a presentation board that showcased their interests, strengths and abilities. Prospective employers visited each job seeker's booth. The idea came from Hawaii state Reps. John Mizuno and Lynn DeCoite, who wanted to create an environment where employers had the...

This session explored key issues, potential unintended consequences and implication for economic competitiveness of conforming to the new federal corpotate income tax. Speakers Joseph Crosby, Douglas Lindholm and Scott Roberti engaged in a highly interactive discussion of the questions facing states as they move to conform or to decouple from the federal tax provisions passed late in calendar 2017 that applied to 2017 taxes....

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