Redistricting favors a rightward shift in tax policy

Several states are currently making headlines by pushing the legal boundaries of redrawing congressional and statewide voting districts to influence the midterm elections next fall and shift the balance of power in the House of Representatives. 

“There are a ton of moving pieces in redistricting, but in aggregate, the national House map will probably move at least a little to the right from where it was in 2024,” said Kyle Kondik, Managing Editor for Sabato’s Crystal Ball at the University of Virginia Center for Politics.

“How far right it moves will determine how much it impacts the House odds.” 

Tax policy flows through the House Ways and Means Committee, which along with every other congressional committee is currently controlled by the Republicans. 

Although the threat to tax-exempt municipal bonds appears to be muted, bond issuers, attorneys, and a bipartisan contingent in the House are still lobbying for the return of advance refunding and lifting the cap on bank qualified bonds. 

The BQ cap has been in place since 1986 while advance refunding was a casualty of the Tax Cuts and Jobs Act of 2017. 

History favors a change in the House via the midterms according to the “Iron Law,” which shows the sitting president’s party losing seats in 20 out of 22 elections as measured since 1950. Losses average between 25-28 seats.

“Based on usual midterm trends, Democrats would have been favored to flip the House next year had no districts changed,” said Kondik. “They may still be favored when the dust settles, but it’s hard to say at this point.”

The Senate is expected to remain in Republican control.   

States base their congressional districts on U.S. Census data to reflect population changes. In most states, the legislatures oversee drawing the lines that define the districts. 

Nine states, including California and New York use independent commissions to draw the lines. 

Drawing the lines to maximize political advantages is called partisan gerrymandering.

Tactics include “packing” which groups large numbers of similar voters in one district or “cracking” which spreads similar voters into different districts to limit their impact.  

“Safe seats” can be created where the opposition has little chance of winning while racial gerrymandering draws lines around concentrations of a particular race or ethnic group. 

Drawing the lines in between censuses typically results in court cases, which is what’s happening in Texas, North Carolina, Ohio, and California.  

“Gerrymandering itself is not new,” said Kondik. “The widespread elective use of it without being prompted by courts in non-census years is new and different, if not completely unprecedented in the wider sweep of American history.” 

Texas plans to add up to five Republican seats. North Carolina is doing the same thing with Republicans aiming to control 11 of the 14 congressional districts in the state. They currently have ten. 

Ohio is working on a bipartisan solution to a Republican pushed plan by allowing the state’s redistricting commission to make the map decisions as opposed to the state legislature. 

California’s redistricting efforts, which could add five Democratic seats is seen as a reaction to what’s happening in Republican controlled states and will be put to a vote next week as Proposition 50.  

Virginia and Indiana are working on redistricting bills, Missouri and Mississippi already have new maps. 

According to Kondik, the current slate of court cases could be anomaly attributed to the Trump administration or a look at what’s to come. 

“This may be the new normal, and there may be more to come, particularly if the Supreme Court rules against section 2 of the Voting Rights Act that allows Democrats to win in places like Alabama and Louisiana and also impact maps in other places,” he said.  

“Without guardrails from the courts or Congress, I don’t really see how the gerrymandering arms race doesn’t continue.”