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WASHINGTON, D.C.—Many U.S.-based companies are in the process of reincorporating their headquarters to countries with lower corporate tax rates. This is commonly known as “inversions” or “expatriations” and takes place when a company merges or acquires a foreign company with the nearly exclusive purpose of paying lower corporate taxes.

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Every legislature and governor relies on a revenue forecast to build a state budget, but as a recent study shows, the process itself can vary considerably around the country. Indiana and Iowa were among the U.S. states that employ all five of the Center on Budget and Policy Priorities’ “best practices” in revenue forecasting.

Two cities in California—San Francisco and Berkeley—will be presenting voters with soda-tax initiatives in the upcoming November election. Soda and sugar-sweetened drinks such as sports drinks and energy drinks would be taxed, although infant formula, nutritional drinks, and diet drinks would not be taxed. Michael F. Jacobson, the executive director of the Center for Science in the Public Interest, said in an article in the New York Times that the soda industry has spent over $117 million since 2009 to combat soda taxes in the United States and is now paying attention to San Francisco and Berkeley.

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The State and Local Legal Center has filed an amicus brief in Alabama Department of Revenue v. CSX Transportation, a case that questions whether a state discriminates against rail carriers, or railroads, in violation of federal law even when rail carriers pay less in total state taxes than motor carriers, or trucks....

This session explored what’s in store for your state in 2015 and beyond as experts forecast fiscal and economic trends for states and the nation. The discussion focused on the most significant fiscal and economic issues facing states—such as public pensions, tax reform and ways to foster entrepreneurship—and included insights about how states are tackling similar concerns. 

The New York Court of Appeals in June 2014 overturned New York City's highly publicized soda ban that limited purchases of fountain drinks to 16-ounce cups in an attempt to reduce constituents' consumption of soda.  Most states have levied taxes on soda purchase intending to influence consumer choices, promote public health and generate revenue. 

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A few months after it ranked first in a national study of state spending transparency, Indiana has taken another step to provide more information online to the public. The Management and Performance Hub opened this summer. It includes details on the state budget, public retirement system and tax revenue. The site also lists and tracks indicators of performance for various state agencies.

A May 2014 state-by-state survey conducted by National Public Radio (NPR) finds that the costs of the criminal justice system across the U.S. are increasingly being shifted to defendants and offenders. Specifically, defendants are now being charged for government services that were once free, including those that are constitutionally required. From the study:

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Low-income workers in Ohio will get additional tax relief as the result of changes made in June to the state’s biennial budget. Following last year’s creation of an earned income tax credit, the legislature chose to expand it — from 5 percent of the federal credit to 10 percent.
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When the Great Recession began to hit states, they had a total of $59.9 billion in reserves. A year later, total budget gaps were nearly double that figure, $117.3 billion.

“States found themselves woefully short in terms of the amount of savings they had to offset the budget shortfalls created by the crisis,” Robert Zahradnik of The Pew Charitable Trusts told lawmakers at the Midwestern Legislative Conference Annual Meeting. “A lot of that is because savings is not the highest priority when it comes to making state budgets.”

The fiscal crisis is over, but it has opened new questions about budget planning and management. Prior to the Great Recession, for example, a fiscal reserve of 5 percent of the total budget was considered a sound target. Now, Zahradnik said, the preferred goal tends to be between 8 and 10 percent. Part of the reason is that state revenue sources have simply become more volatile, thus the need to better plan for more-extreme “rainy days.”

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