While federal legislation often captures the most attention and news coverage, state legislation activity also is very important because of its impact on your business and life.
State government treasuries collected record revenue surpluses in 2021 due to increases in state income tax revenue. So, what are the state governors’ offices focused on in 2022?
Multistate Associates, the American Rental Association’s (ARA) political consulting firm, researched and summarized this information from most of the governor’s state of the state addresses this year.
Public health, safety and wellness top the list as important priorities for many governors today. These are broad categories that include everything from health care funding to mental health, as well as social issues. Twenty-four governors mentioned general health care reform that includes cutting consumer health care costs and working to address health care staffing challenges
With historic budget surpluses, it is not surprising that many governors cited budget and tax policy as another high priority. Thirty-four governors mentioned tax reform, which includes everything from an overhaul of the tax system to the repeal of a specific tax.
Another 22 mentioned the importance of improving the state’s infrastructure.
Several state governors want to increase their state’s ‘rainy day’ fund, including Alaska, Arkansas, Hawaii, Idaho, Illinois, Kansas, Missouri, South Carolina, Tennessee, Washington and Wyoming.
Education is the third most popular category, with 34 governors citing the desire to revitalize education funding and reforming curriculum. Broadband access, infrastructure and addressing housing needs followed closely behind.
Other priorities included commerce and industry as well as employment and labor focusing on workforce development with the majority of mentions in this category about job training.
Not surprisingly, many of these priorities also fall in line with ARA’s federal and state policy initiatives for this year — workforce development, infrastructure and tax policy at the state as well as federal levels.
ARA state initiatives
California — ARA and the California Rental Association are deeply involved in providing the industry’s perspective to the Air Resources Board (ARB). The ARB regulates air quality in the state and plans to further regulate diesel and gas-powered equipment, replacing gas and diesel-powered equipment with equipment powered by batteries. Due to the impact this has on the rental industry, it is imperative that the ARB understands the rental industry’s ability to change to meet any new regulations. Market demand for the equipment must exist and the technology must be at a place where the equipment can be economically and successfully brought to the marketplace.
Florida — Florida doesn’t provide any relief from the state’s business tangible personal property (TPP) tax on heavy equipment rentals. Nearly all other states in the region provide relief, have adopted reforms, or don’t levy the tax at all. Alabama, Georgia, North Carolina and South Carolina all levy industry-supported replacement taxes or surcharges that have lessened the administrative and compliance burdens of the TPP taxes they replaced.
To make Florida more competitive, efforts were taken in the legislature to pass legislation that would treat mobile heavy equipment rental property as inventory — similar to other states. Unfortunately, despite heavy involvement from ARA and the ARA of Florida, these efforts were not successful.
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| Jeff Lignugaris testifying at a tax relief hearing in Georgia |
Georgia — Previously, equipment weighing 5,000 lbs. or more was the only equipment eligible for property tax relief. ARA and the ARA of Georgia worked to lower the weight limit to 1,500 lbs., and thus increase the amount of equipment eligible for tax relief. Working with lobbyists in Atlanta, Jeff Lignugaris, Northside Tool Rental, Atlanta, spent a lot of time and effort, advocating and testifying on behalf of this measure. The measure was recently signed into law by Georgia Gov. Brian Kemp. The new law goes into effect July 1, 2022.
Kentucky — The state association has asked for assistance in crafting a theft of services bill. A state representative is interested in supporting the measure and ARA will help based on success in other states.
Michigan — HB 4833 and HB 4834, which would provide property tax relief, passed the state House and Senate and were signed into law by Gov. Whitmer on March 25, the culmination of seven years of work in Lansing on this issue.
Nevada — ARA continues its work along with members in Nevada to advance property tax relief in that state. Nevada also is one of the few states that doesn’t provide any relief.
Alysia Ryan, J.D., is the ARA’s director of government affairs. To learn more about ARA’s government affairs efforts, visit ARArental.org/government-affairs.