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States Want Trump to Release His Tax Returns. What About Governors?

Democrats are pushing legislation to require presidential candidates to release their tax returns. The same rules don't apply for most statewide elections -- but that could change.

Trump pointing a finger at a campaign rally.
President Donald Trump speaking at a campaign rally in Grand Rapids, Mich.
(AP/Manuel Balce Ceneta)
July 8, 2019, 1:54 p.m. ET Update: New York Gov. Andrew Cuomo signs the Truth Act to require the state's tax department to release the requested returns of state and federal officials after they're elected.

 

SPEED READ:

  • 18 states have bills to make presidential candidates release tax returns.
  • Only some states set that requirement for candidates for governor.
  • A few bills would extend the rule to all statewide elections.
 
As the 2020 election approaches, states are ramping up efforts to require presidential candidates -- including Donald Trump -- to disclose their tax returns.

A total of 18 states this year, including Trump’s home state of New York, have considered bills that would require such a disclosure in order to appear on the ballot, according to the National Conference of State Legislatures. The push comes as the administration fights a Democrat-controlled House committee’s subpoena for Trump’s tax and financial records.

The president has repeatedly refused to release his tax returns -- something every major nominee for the White House has done since 1976. This week, Trump's personal lawyers sued House Oversight Committee Chairman Elijah Cummings to stop the subpoenas.

But state legislators' calls for financial transparency stand in contrast to their rules for state elections: Only one state, Vermont, requires candidates for governor and other statewide offices to disclose at least part of their tax returns.

Some of the bills in question, including Pennsylvania's, would extend the tax disclosure requirement to the gubernatorial election. Legislation in Hawaii would extend it to every executive office down to mayoral elections. But some bills, such as one in New Hampshire, would only apply to federal candidates. And others, like Illinois', would only apply to people running for president and vice president.

The debate raises questions about where the line should be drawn between privacy and politicians. 

Democratic New York state Assemblyman David Buchwald is the author of the NY Truth Act, which would require the state's tax department to release the returns of state and federal officials after they're elected. He says it's a needed change because state and federal officials are most likely to be in positions where they could propose significant tax changes. Therefore, he says, voters should know how those officials may or may not benefit from the legislation -- or whether there are any conflicts of interest.

He points to the 2017 federal tax reform as a prime example.  

“Although people can rightly speculate on what that law meant for the president or for those of similar wealth,” Buchwald says, “knowing more specifically how it implicates him is something that I think is valuable.”

Still, others say adding more requirements for candidates is a slippery slope.

In Illinois, Republican state Sen. Dale Righter opposes the measure there, noting that the U.S. Supreme Court has already ruled that states cannot alter ballot qualifications described in the U.S. Constitution.

Even some Democrats have qualms. Two years ago in California, then-Gov. Jerry Brown vetoed a tax disclosure bill, saying, “Today we require tax returns, but what would be next? Five years of health records? A certified birth certificate? High school report cards? And will these requirements vary depending on which political party is in power?”

Looking ahead, it’s unclear whether this year’s round of legislation will go any further than last year’s. In 2018, a total of 27 states considered some form of tax disclosure requirement for politicians -- none of them passed. This year, bills in Hawaii, Illinois, New Jersey and Washington have so far made it through their senates and are now before their respective House chambers.

What is clear is that this movement is driven by Trump's unconventional presidency.

“It is fair to say that none of this would have come up had not the president broken a 40-year norm and volunteered his tax returns,” says Buchwald. “I personally would have preferred the traditions of this county continue. But in the face of new circumstances, I think states need to take those circumstances into account.”

 

In Other Public Finance News:

 

Uber’s Plan to Steal Public Transit’s Customers

The ride-sharing company Uber is planning to go public and its initial financial filings contain some worrisome statements for public transit agencies.

The company’s offering document says it aims to bill itself to customers as “an alternative to … public transportation,” which it identifies as a $1 trillion market that it could cut into over time. The filing indicates that Uber’s business model depends on limiting transit as a competitor, says municipal analyst Joseph Krist.

That’s a problem, especially considering that rail ridership -- and therefore revenues -- in some cities is on the decline. It means that local governments “need to consider managing the role of ride-sharing services in an overall transportation scheme,” Krist writes in his weekly commentary for Court Street Group.

New York, for example, is implementing congestion pricing in Manhattan to offset issues arising from the now more than 100,000 ride-share vehicles in operation there. The new revenue will go mainly toward subway maintenance and improvements.

 
This appears in "The Week in Public Finance" newsletter. Subscribe for free.

Liz Farmer is a former GOVERNING fiscal policy writer.
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