State & Local Finance
On the Downslide. After a rebound to the plus side in February, Kansas revenues again fell below expectations last month, according to state Secretary of Revenue Nick Jordan. Though expectations for the current fiscal year were lowered in November, revenues for March still fell $11.2 million or 2.8% short of projections. Individual income tax receipts beat expectations by $8.7 million, but it was not enough to offset shortfalls in oil and gas severance, corporate income, and sales and use tax receipts, according to Sec. Jordan: Corporate income tax receipts were $8.2 million, or 18%, below expectations, while sales and use tax receipts were $7.8 million short, and oil and gas severance was $5 million lower than expected. In February, state revenues ran $22 million beyond expectations after falling $47.2 million below projections in January. The falling revenues are creating unnerving challenges in the state Legislature to erase a $600 million budget deficit. House Minority Leader Tom Burroughs (D-Kansas City) told the Topeka Capital Journal that sweeping state income tax reductions were marketed by the Republican-led Legislature and Gov. Sam Brownback as a “shot of adrenaline” to the heart of Kansas’ economy, but the Minority Leader likened said “shot” to be more akin to “an ax wound: Kansas continues to bleed revenue as is evident by this month’s numbers…How we resolve this issue remains unknown as the legislative session is nearly over and we haven’t seen a comprehensive balanced budget.” In February, the Kansas City Federal Reserve had reported that business activity moderated significantly during the month, likely related to the West Coast port disruptions as contributing significantly to the weakening. The composite index of 10th District factory sector activity fell to negative 4 in March, the lowest level since June 2013. The composite index is an average of the production, new orders, employment, supplier delivery time and materials inventory indexes. Kansas is rated AA by S&P, with a negative outlook after a one-notch downgrade last August. Moody’s rates the Sunflower State Aa2 with a stable outlook. With about $3.17 billion of tax-supported debt, Kansas’s per capita debt load of $1,112 is above the median of $1,074, according to Moody’s.
How Dry Can it Be? California’s long-running drought has officially reached crisis mode, with Gov. Jerry Brown yesterday ordering statewide water reductions for the first time in he Golden State’s history. Under the Governor’s order, state officials said household rationing will likely be implemented by some local water agencies to meet the new state goal of reducing overall water use in the state by a quarter over the next nine months. To put that herculean task in perspective, that would be the equivalent of enough water for a city of six million people for one year. A key focus will be on those ever so green lawns and other outdoor landscapes, which account for a large amount of water use, according to state officials: the Governor’s orders singled out large campuses, golf courses, and cemeteries as places where restrictions would be mandated. Electronic readings in the Sierra Nevada mountains in the state this week revealed the water equivalent of the snow in the range and other California mountains at 5% of normal―the lowest on record for that date: roughly one-third of the state’s water supplies come from snow that coats its ranges every year—and for which the state’s network of reservoirs was designed to capture the water from the annual spring snow melts; this year, however, those reservoirs are already near half-empty; they are not expected to see much more water. Mark Ghilarducci, Director of the California Office of Emergency Services, yesterday warned: “The situation is unprecedented and critical and requires the action of all hands on deck.” The new orders could have singular impacts on the state’s economy, especially agriculture, where imported water supplies have been cut to zero in some instances. California’s farmers left 400,000 acres of fields unplanted last year, resulting in a loss of 17,000 jobs; they will almost certainly farm even fewer acres this year, according to the state’s Secretary of the California Department of Food and Agriculture, Karen Ross. Gov. Brown’s order targets users that state officials say have not contributed their fair share of conservatism, especially in Southern California, where the concentration of estate-sized homes and golf courses, according to monthly surveys of water use by the State Water Resources Control Board, has been a significant drain, creating an imposing challenge to the Board, which is now charged with implementing the mandatory cuts. Felicia Marcus, chairwoman of the board, which will direct the state’s hundreds of local water agencies to achieve the reductions, notes that those that fail to meet goals may face penalties of up to $10,000 a day.
Should Illinois Cities Have Access to Muni Bankruptcy? Rockford Mayor Larry Morrissey (pictured below) testified this week before the Illinois Legislature that fiscally stressed Illinois local governments should have the option to file for municipal bankruptcy protection: “Simply put, if cities are put in a position where they can’t pay all of their bills, this provision would provide the best way amongst not a lot of good choices…to help cities continue to provide public safety to citizens while protecting our ability to access the financial markets and provide fairness to all creditors.” Mayor Morrissey, who currently serves as a Board Member and Presidents’ Circle Member of the Rockford Area Economic Development Council (RAEDC), not to mention Chairman of the Workforce Investment Board (WIB) and the Rockford Metropolitan Agency for Planning (RMAP), municipal member of the Chicago Metropolitan Mayors’ Caucus, Midwest High Speed Rail Association, and the Congress for the New Urbanism (CNU), stressed his city was not in need of the option. His testimony came during a recent hearing held by the House Judiciary-Civil Law Committee on House Bill 298, sponsored by Rep. Ron Sandack (R-Downers Grove), which would permit Illinois local governments to file for Chapter 9 municipal bankruptcy. Rep. Sandack said his proposed legislation would require municipalities to first demonstrate they truly are insolvent and have made a good faith effort to restructure their debts with creditors: “By sponsoring this bill, I am not encouraging municipalities to abandon efforts to regain financial stability on their own. The bill would simply provide municipalities with an additional tool to help them get their financial affairs in order.” The issue with regard to whether Illinois should amend its laws has gained traction since Governor Bruce Rauner proposed it; now the Judiciary Committee in Springfield has heard from representatives of the public finance community and civic organizations who pressed to make new options available for fiscally stressed municipalities and offered an alternative in the form of a new authority to assist local governments solve fiscal problems without bankruptcy. The proposals, however, have encountered opposition from police and fire unions, with a representative of the firefighter’s union testifying: “Our members provide critical service. It’s very convenient for people to place their woes at the feet of…police and firefighter pensions.” Nevertheless, the issue is becoming more pressing to local elected leaders: Illinois local governments confront big increases in their public safety pension contributions next year thanks to a pre-existing state unfunded mandate to shift to an actuarially required contribution level. The ever insightful and thoughtful Lawrence Msall, president of the Chicago Civic Federation, urged the legislators lawmakers to consider a measure backed by the Federation and developed by one of the nation’s godfathers of municipal restructuring, Jim Spiotto, to create an authority designed to intervene before a city or county’s fiscal strains reached a crisis stage: the quasi-judicial authority would help Illinois local governments deal with pension-related and other fiscal burdens threatening their solvency with a goal to avoid defaults and municipal bankruptcy while putting a government on a sustainable path, testifying: “Bankruptcy is a very dangerous place for us to be heading.” Illinois Finance Authority board Chairman William Brandt stressed the availability of help now through the existing Financial Distressed City Act; he warned of the toll bankruptcy takes on a city or county.
An Extraordinary Challenge to Governance: Local Government Consolidation and Unfunded Mandates Task Force. Every municipal leader is apprehensive about unfunded mandates—be they from the federal government or the state, so it was that one of Illinois Governor Bruce Rauner’s first actions upon taking office was to issue Executive Order 15-15, which created the Local Government Consolidation and Unfunded Mandates Task Force, charged to study “…issues of local government and school district consolidation and redundancy, and to make recommendations that will ensure accountable and efficient government and education in the State of Illinois―” challenges which, in many ways, go to the heart of some of the path-breaking analysis and work done by the Chicago Civic Federation, which has written about the recommendations included in the final report of a previous such commission under former Gov. Pat Quinn, the Local Government Consolidation Commission. Gov. Rauner’s Executive Order names Lieutenant Governor Evelyn Sanguinetti as chair of the Consolidation Task Force and directs that its members shall be appointed by the Governor and represent public and private organizations with additional membership made up of representatives from local governments, school districts, and members of the General Assembly. The Task Force is to make its recommendations to the Governor and General Assembly by December 31, 2015.
Dissolution of Coterminous Townships. Mirroring some of the path-breaking work done last year in Pennsylvania, Illinois State Representative Jay Hoffman recently introduced HB 3693, which would allow the dissolution of the township of Belleville via majority votes by the Belleville City Council and the Belleville Township Board (Belleville Township is coterminous with the City of Belleville), with at least some of the thinking that a consolidation could improve efficiency.
Any Port in a Fiscal Storm? Similarly, Illinois State Representative Elaine Nekritz has introduced HB 3758, which would transfer authority over the Illinois International Port District from the current governing board to the Chicago City Council and permit the Windy City to transfer the District’s open lands to the Forest Preserve District of Cook County and its golf courses to the Chicago Park District. Currently, the Port District is governed by a nine-member board of directors, five appointed by the Mayor of Chicago and four by the Governor of Illinois. In a 2008 report, the Chicago Civic Federation analyzed the Illinois International Port District’s finances and activities, contrasting them with five comparable ports along the Great Lakes – St. Lawrence Seaway. As a result of this investigation, the Federation concluded that the District appeared to be focused on golf, rather than shipping and port operations. (Harborside International Golf Center is the Port District’s only major construction project since 1981.) In contrast, the Federation found that none of the five other ports in the study focus their operations predominantly on recreational activities or entertainment facilities. Port authorities in the other cities derive most of their revenues from activities associated with the normal operations of a port, such as leases, rentals, contracts and grants. The Federation has recommended that the District be dissolved as a result of its findings.
Overcoming Wayne County’s Fiscal Path to Municipal Bankruptcy. Wayne County, Mich. (way down on the lower right) Executive Warren Evans is consolidating various departments and services in what he reports is the first phase of a restructuring to save money for the cash-strapped government―as part of an effort to stave off a fiscal crisis and state takeover of the county, which is on track to become insolvent as early as next summer. Mr. Evans yesterday reported the current reorganization would mean $3 million in general fund savings from various departmental reorganizations that include cutting 50 jobs: among them is the elimination of the Department of Economic Development Growth Engine, with the Michigan Economic Development Corporation taking over economic development for the county. Mr. Evans noted: “There are too many chiefs and not enough Indians.” He added that the county—which abuts and surrounds Detroit, needs to cut $70 million a year to achieve structural balance. Earlier last month he ordered a spending and hiring freeze across the county; he has also ordered $2 million in salary cuts. In February, Mr. Evans announced that the county’s fiscal condition was even grimmer than he had realized before taking office: a new Ernst & Young audit projects the county could run out of cash by August 2016 without major structural changes, showing the county’s operational deficit was higher than expected and, with a chronic structural shortfall, it was quickly burning through its remaining cash. The county for years has run a structural deficit, now projected at $50―$70 million; it has an accumulated deficit of roughly $161 million, and a pension plan with a funded status that has dropped to 45% from 95% ten years ago. A debt restructuring, state takeover, and even municipal bankruptcy are all on the table. Wayne County lost its last investment-grade ratings shortly after that, when S&P downgraded it into junk territory in mid-February. Moody’s dropped it into speculative territory in early February. Fitch Ratings, which already had junk ratings on the credit, downgraded it to B from BB-minus and kept the rating on negative watch in mid-March.
State Tax Expenditure Accountability. The fastest growing portion of the federal debt and budget comes from federal tax expenditures or breaks—federal expenditures which affect the federal deficit, but are not subject to the authorization and appropriations actions which govern federal assistance to state and local governments. They resemble a back door, secret way of spending that is outside the radar screen. Such budgeting unaccountability is not, however, limited just to the federal government: it has become an ever increasing feature of states. But maybe that will begin to change: Last month, Alabama State Senator Bill Hightower (R-Mobile) was successful in getting the Senate to unanimously pass his bill (SB 119) to require the state’s Legislative Fiscal Office to submit an annual tax expenditure report detailing the state’s tax incentives, credits, deductions, and exemptions—and estimating the costs associated with each. As David Brunori wrote this week: “In most states, the tax incentives are shrouded in mystery—there is little knowledge of who gets what. As a result, there is little accountability. For Alabama to consider adoption of a measure that would shed light on the practice is significant.” At the federal and state level, unsurprisingly, a disproportionate percentage of tax expenditures subsidize those least in need of state or federal subsidies.
As we observe the changing economy—what with the sharing economy, the impact of the internet on work hours and locations, we can anticipate it will lead to profound changes in transportation and housing. Because the internet is permitting more people to work from anywhere, anytime, the old model of cities and suburbs is becoming increasingly obsolete.
The Disruptive, but Sharing Economy: What’sApp? There was a time when we could connect two tin cans with string and sort of communicate, but now messaging services are exploding, with Facebook this week announcing at a conference in San Francisco that it has begun to convert its Messenger service into a “platform” that can carry, and be integrated with, all kinds of apps created by other software firms. So Facebook Messenger, which is itself an app for smartphones that run on Apple’s iOS and Google’s Android operating systems, will then be competing with those operating systems’ services for buying apps and downloads. According to Flurry, a market-research firm, the total number of users grew by more than 100% last year—that is, such phenomenal growth that texting seems on the wane, and now we have a surge of new messaging apps: In fact, according to the Economist, the ten biggest messaging apps, which include KakaoTalk, Viber, and WeChat, now include more than 3 billion users, with WhatsApp, the leader, boasting 700 million. Indeed, with the explosion, it appears the phenomenon will not be limited to just numbers, but also specialization: Snapchat snapped us to attention with its ability to enable the exchange of photos that disappeared in the wink of a blink; Secret, Whisper, and Yik Yak allow users to remain anonymous; Telegram incorporates strong encryption (creating apprehensions for police departments and national security services; FireChat works without cellular service: users’ phones communicate directly. WhatsApp handled more than seven trillion messages last year, about 1,000 per person on the planet. Across the pond in Merry Olde England, users spent as much time on WhatsApp as on Facebook’s social-networking app, according to Forrester, whilst in China subscribers to WeChat are estimated to use the app for about 1,100 minutes a month on average. Now the momentum seems to be moving to the corporate sector: Slack, a messaging service which works on both smartphones and personal computers, seems to be succeeding where other attempts to create “corporate social networks” have failed: it is replacing e-mail as the main communications channel inside firms, and claims that among its half a million users, they typically spend 135 minutes each working day on the service and altogether send 300 million messages a month—indeed, such a volume that the firm divides its communications into “channels,” each dedicated to a project or a team: users can create and subscribe to such channels, exchange messages, post links, and upload files—all of which are saved. Besides reducing the time everyone spends handling e-mail, the channels also help new employees to get up to speed quickly, instead of starting with an empty inbox. It is not clear, yet, whether states and local governments are using Slack—much less competing upstarts, such as Quip and HipChat, which offer similar features, but it is clear the Silicon Valley is paying attention: Cisco, a maker of networking gear, recently launched a service called Spark, which lets users switch to voice and video communication if needed; IBM will soon follow suit with Verse, a web-based e-mail service which lets users exchange instant messages, but also employs the firm’s artificial-intelligence engine, Watson, to sort messages and even reply, to reduce the communication burden.
Driving States Crazy. The National Association of Insurance Commissioners State regulators (NAIC) this week most helpfully provided insights into one of the significant new challenges in state and local governance in the sharing economy: insurance. NAIC approved a white paper for state legislators and regulators on insurance issues involved in what it calls “transportation network companies,” or TNC’s. The issue matters, because most current auto insurance policies exclude coverage involving the transport of passengers for a fee. But with the rise of Lyft, Uber, and other TNC’s which arrange transportation for a fee using a technology platform such as mobile application app or website, TNCs create online apps which connect riders and drivers, but the TNC terms and conditions generally indicate that TNC’s are not the transportation providers and, ergo, disclaim the safety of the driver among other disclaimers and notices. Thus, while TNC’s do, as a rule, have driver requirements, such as minimum age limits, valid driver’s licenses, current vehicle registration and insurance, at a minimum; there is apprehension with regard to insurance coverage, because ride-sharing drivers “use personal cars for that commercial activity, but do not have commercial auto insurance.” Participating drivers get some commercial coverage from both Uber and Lyft, but NAIC warns state legislators and other state and local policy makers there can still be coverage gaps which could affect the driver, the vehicle, and—perhaps most critically, the child or adult passenger—whether it be from an accident, or some kind of errant behavior by a driver. Personal automobile policies generally do not provide coverage when a car is used to provide transportation services for pay; indeed, some insurers believe that using a covered car thusly is grounds for cancellation at any time, according to the NAIC report. Commercial coverage, however, could be prohibitively expensive. Among insurers trying to fill the gap, USAA in February began a pilot program in the Mile High State offering specialized coverage for ride-sharing drivers. USAA said the coverage would add about $6 to $8 a month to policyholders’ bills; it now plans to extend the program to Texas in May. Geico currently offers ride-sharing coverage in Maryland and Virginia; MetLife is in Colorado. Last week, Uber said it and Lyft had reached an agreement with a number of major insurers and insurance industry associations on a model bill for state legislative action which is intended, they say, to address coverage gaps.
Driving Rents Crazy. Airbnb, the sharing service for short-term accommodations, has long been criticized for driving up apartment rents in cities and counties. Now, new research, commissioned by Airbnb by the University of British Columbia, appears to contradict that apprehension, indicating that Airbnb pushes up rents only slightly in some major cities across the country. The contretemps has arisen out of apprehension that people who lease apartments and rent them out to tourists through Airbnb are willing to pay more rent, driving up prices for everyone else and that landlords and ladies put units on Airbnb themselves instead of renting them, decreasing the supply of long-term rentals. However, research by Thomas Davidoff, an assistant professor at the Sauder School of Business, has undercut some of those fears. Mr. Davidoff determined, for example, that in the Big Apple, Airbnb increases the price of a one-bedroom unit by about $6 a month. In San Francisco, he determined that it increases rents by, on average, about $19 a month.
State & Local Leader of the Week
State & Local Leader of the Week. Christopher Lockwood, the Executive Director of the Maine Municipal Association for the past 36 years has announced his retirement effective this August. In a state comprised of many very small municipalities, Lockwood and MMA cast a long shadow not only in Maine state governance, but across the country. Mr. Lockwood engineered a significant growth in membership in MMA with 487 of the 492 Maine municipalities now as members. Much of that was accomplished by developing and delivering an array of programs making local policy makers and municipal employees able to focus on delivering high quality services to their constituents at affordable costs. When the Brookings Institution embarked on a lengthy research project “Charting Maine’s Future―An Action Plan for Promoting Sustainable Prosperity and Quality Places,” most assumed that one of the key findings would be the need for local government consolidation and calls for municipal efficiencies. Instead, when in 2006 the Report was issued, it instead stated “[f]or its part, local government appears rather frugal by comparison to national and rural-state norms.” Mr. Lockwood and his staff worked tirelessly supporting the research project and providing proof that small government governed through direct democracy can be among the most efficient forms and sizes of government. Over his tenure, Lockwood guided municipal participation in a series of citizen initiatives concerning the state-local revenue structure. MMA led the fight against local tax caps and even initiated its own referendum by challenging the actions of the state legislature which had diverted state funds pledged to reduce the property tax burden. They were so successful in these initiative struggles that they were sued to preclude them from lobbying and participating in such efforts. In what will be become a landmark decision, MMA proved that it – and governments and government associations across the country – are legally capable of such legitimate expression of government speech. Chris also took very seriously the MMA role in national government, through his active participation in the National League of Cities and directly with the Maine Congressional delegation. He will be sorely missed by his constituents in Maine and his compatriots across the country.
Double Your Pension. The Scranton Times-Tribune this week reports that the federal government has joined in the investigation into double pensions awarded to Scranton’s non-uniform workers, according to two people familiar with the probe. Joseph Schimes, a retired employee who waged a successful battle to qualify for the extra compensation, said he was interviewed Monday by a state police trooper and an FBI agent. The state/federal inquiry came in the wake of pension board officials discovering seven people were granted excess benefits, despite the fact they did not have 25 years of service as of Dec. 31, 2002, which was required to qualify for the incentive. According to Mr. Schimes: “They wanted to get information regarding the procedures that were followed.” The criminal investigation began in February after pension board solicitor Larry Durkin contacted state police based on questions that arose during his review of documents. The Pa. inquiry is among three investigations underway: Pennsylvania State Auditor General Eugene DePasquale’s office is also investigating the cases, as is Scranton’s composite pension board.
Politics & Public Pension Investments. While most of the attention to stat6e and local pension problems focuses on insufficient state or local contributions, James Bacon, Tuesday, in his Bacon’s Rebellion Blog, looks at the ticklish issue of politically motivated pensions: “State pension plans that manage their own U.S. equity investments tilt their portfolios to stocks located within their state. Amazingly enough, the in-state stocks tend to outperform the overall stock holdings ‘by a wide margin,’ conclude the authors of ‘The In-State Equity Bias of State Pension Plans,’ published by the National Bureau of Economic Research. The reason, they suggest, is that investing in companies close to home confers an informational advantage.” Mr. Bacon writes that the Virginia Retirement System is one of the 27 pension plans included in the study, although he noted that the paper did not break out the VRS’s performance, so there is no way for readers to know if “the pension system hewed to the general rule or was an exception from it.” But he did write: “The authors found evidence of political influence in the stock-selection process. But get this — ‘these politically motivated within-state holdings yield excess returns for the pension fund.’ The authors concluded that their results are ‘broadly consistent with the importance of networking in fund management.’” Tongue in proverbial cheek, he concluded: “My naive faith in the corruption of the system is shaken. Whatever happened to good old-fashioned cronyism, payola and screwing the public?”
Ethics & Public Trust
From the Richmond Times Dispatch: “Successful government relies on trust. The breakdown of comity at all levels reflects the citizenry’s lack of confidence in institutions and individuals. Washington’s woes are well documented. Local jurisdictions suffer self-inflicted damage as well.”
Federalism & Ethical Behaviors. U.S. Sen. Robert Menendez (D-N.J.) has been indicted on 14 federal corruption charges, including allegedly accepting hundreds of thousands of dollars in improper gifts and campaign contributions as bribes in exchange for using his office to help a close friend and donor. The 68-page indictment against Sen. Menendez was handed down by a federal grand jury in Newark yesterday afternoon. It includes eight counts of bribery against Sen. Menendez, as well as allegations of honest services fraud, violating the Travel Act and making false statements. Also indicted was Dr. Salomon Melgen, a longtime Menendez friend and close associate. The two men had been at the center of a lengthy criminal probe by the Justice Department and FBI. For this author, it brings back sad memories of the indictment and conviction of former U.S. Senator Pete Williams, for whom I served as an assistant counsel on the U.S. Senate Housing & Community Development Subcommittee. Sen. Williams was convicted on May 1, 1981, on nine counts of bribery and conspiracy for promising to use his office to further a business venture in which he had a hidden interest. He was fined $50,000 and sentenced to three years in prison, which he served at a minimum-security federal prison in Allenwood, Pa. It is characteristic of the former Senator that he devoted much of his time in prison to training minority prisoners how to take apart and put together truck engines—so that they would have meaningful employment opportunities after their releases.
Can a Municipal Employee Run for Office? The Fifth Circuit this week affirmed the dismissal by the lower court of a challenge by Micah Phillips, a former 12-year veteran of the Dallas Fire Department, who had announced his candidacy in the Democratic primary for a seat on the Dallas County Commissioners Court. At that time, the city’s ordinance (as does Dallas County’s) barred city employees from seeking office in any county overlapping the city of Dallas [“If any employee of the city becomes a candidate for nomination or election to any elective public office within Dallas County; or elective public office in another county within the state, having contractual relations with the city, direct or indirect; or any elective public office that would conflict with his or her position as an employee of the city, the employee shall immediately forfeit his or her place or position with the city.”] The City subsequently terminated Mr. Phillips for violating those laws. In this suit, dismissed on the pleadings by the district court, Mr. Phillips challenged those laws both facially and as applied to him. Addressing Phillips’s as-applied challenge to the City’s Charter, the court first considered whether Phillips’s candidacy amounted to speech on a matter of public concern (that is, whether he maintains a First Amendment interest in his candidacy), and second whether that alleged interest is outweighed by the City’s interest in limiting its employees’ political ambitions, finding that: “[We hold today, in harmony with those decisions, that candidacy alone constitutes speech on a matter of public concern.” Satisfied that Phillips’s candidacy touched on a matter of public concern, the court then turned to an evaluation whether his interests are outweighed by those of the City. “Put simply,” the court wrote, simply, the “governmental interest in fair and effective operation of the…government justifies regulation of partisan political activities of government employees.” Phillips v. City of Dallas, 5th U.S. Circuit Court of Appeals, No. 14-10379, March 27, 2015.
Challenging State Tax Regulations. In a divided opinion, the U.S. Supreme Court, in a case important to online retailers in the Mile High State, this month addressed the Tax Injunction Act—deciding upon a narrow interpretation of the federal law to cases that directly affect assessment, levy, or collection—but one that could have significant repercussions for challenges to state tax regulations. Importantly, in Justice Ginsburg’s concurrence, she framed the issue around the precedent of “state-revenue-protective moorings,” framing the question before the court to be “whether the [Tax Injunction Act] was intended to insulate state tax laws from constitutional challenge in lower federal courts even when the suit would have no negative impact on tax collection,” effectively limiting the federal law to cases that directly affect assessment, levy, or collection—but which could significantly open the door to challenges to challenging state tax regulations. Direct Marketing Association v. Brohl, U.S. Supreme Court, No. 13-1032, March 3, 2015.