What the Midwest's governors want: State of the State addresses focus on tax cuts, worker training and early learning

In State of the State addresses reflecting improved fiscal conditions in much of the Midwest, the region’s governors opened the 2014 legislative year with proposals to cut taxes and invest more in worker training and early-childhood education.

Eight of the region’s governors gave State of the State speeches in January. Over the coming weeks and months, the region’s legislatures will decide the fate of the governors’ agendas for 2014. But these speeches provide a sneak peek at some of the priority issues for the Midwest’s political leaders in the year ahead.
Here is a look at some of the recurring themes in this year’s addresses.Projections for 2014 governors' races
Time for tax cuts?
Most of the January speeches included calls for tax relief of some kind, with the governors citing factors such as strong budget reserves and more-stable economic conditions. Michigan Gov. Rick Snyder made a general pitch to ease “the burden on low- and middle-income families.” Two other governors — Wisconsin Gov. Scott Walker and Nebraska Gov. Dave Heineman — were more specific in their State of the State tax proposals.
Walker’s plan, in part, is to cut the state’s lowest income-bracket from 4.4 percent to 4.0 percent. Most of his proposed tax relief, though, centers on two other changes: a reduction in the withholding tax for state income taxes and a cut in property taxes. In all, he told legislators, the plan amounts to $800 million in relief.
In Nebraska, the value of agricultural land has skyrocketed, with one effect being a rise in property taxes. To reduce this tax burden, Heineman told lawmakers, the state should make only 65 percent of the market value of agricultural land taxable; the rate is currently 75 percent.
He also wants a cut in Nebraska’s income tax rates, which he says are “higher than all of our neighboring states.”
Other governors, too, cited regional competitiveness as a reason for supporting their more-targeted tax-cutting plans. For example:
• Indiana Gov. Mike Pence wants to phase out the personal property business tax, which he says discourages investment and makes Indiana uncompetitive with neighboring states like Illinois and Ohio that don’t have such a tax.
• Iowa Gov. Terry Branstad wants to fully exempt military pensions from the income tax, which is already done in most other Midwestern states.
• Illinois Gov. Pat Quinn said his state should strive for a lowest-in-the-nation Limited Liability Company fee in order to encourage business start-ups. He also called on lawmakers to double the state’s Earned Income Tax Credit.
Plans for worker training, early learning
One commonality in many of the governors’ speeches was an emphasis on career training.
As part of his plan to better equip young people with job skills, South Dakota Gov. Dennis Daugaard has proposed more state aid to help high school students take dual-credit courses and allow local schools to expand their career-and-technical-education programs In addition, he called for $1.5 million in scholarships for students who attend South Dakota’s technical institutes and, upon graduation, agree to stay in the state and work in a high-need area.
Branstad, meanwhile, wants to triple Iowa’s investment in “earn while they learn” apprenticeship programs, which he says allows young people to reduce their student debt while receiving hands-on career training.
Walker’s new budget proposes an additional $35 million for Wisconsin Fast Forward — the state’s new worker-training program. In particular, Walker said more state resources should go to local technical colleges and dual-enrollment programs that target skills training in high-demand jobs.
In Illinois, Quinn called for an expansion of the Youth and Young Adult Conservation Corps — a program that employs teenagers and adults in state parks and provides grants to local governments and not-for-profit groups that employ or train young people.
Quinn also unveiled a new Birth to Five Initiative, which would focus on connecting expectant mothers to prenatal care as well as increase support and training for the parents of preschool-age children.
Other governors, too, unveiled new early-learning proposals.
Kansas Gov. Sam Brownback, for example, has proposed statewide funding of all-day kindergarten, and Pence wants Indiana to begin providing vouchers for parents to send their children to preschool. Indiana’s pre-K program should be voluntary, Pence said, and would be targeted toward low-income families.


Stateline Midwest ~ February 20141.69 MB