State Tax Update Archive
[2003 - 2004] [2002 and Older]

New Procedure: Bill Retention in New Hampshire
State House Speaker Gene Chandler (R-Bartlett) embraced a bill-retention procedure with the ostensible purpose of reducing the workload of lawmakers who convene on a biennial basis. Lawmakers may now hold onto a bill while they go home for long intra-session recesses. All retained bills must be voted on early in 2002, however. Rep. Barbara Richardson (D-Richmond) commented, "It makes it seem like the session will never end" (Nashua Telegraph, 7/24/01).

South Dakota Surplus Estimates Fall Below Projections
The fiscal year ended 6/30/01 with an unexpected $5 million in surplus funds collected through sales taxes. About half of the surplus was money allocated to agencies and not spent. Governor William Janklow (R) estimated last November that surplus moneys could reach $15 million by the end of the fiscal year. By the time legislators left Pierre in February, that estimate had been revised to $6.4 million. The sales tax brought in $452.3 million last year, $20 million more than one year earlier, but $1.4 million less than lawmakers anticipated in February. Nonetheless, any surplus is a call to cut taxes, and lawmakers should cut taxes because tax money is income that taxpayers have earned, not money lawmakers feel they should have to spend.

Wyoming Governor Advocates E-Taxes
Governor Jim Geringer (R) urged Congress to allow states to tax e-commerce to replenish state revenue coffers. Gov. Geringer spoke on 8/4/01, the opening day of the National Governors Association in Providence, RI, reminding his audience that state coffers could win up to $30 billion a year by 2003 in Internet tax money. "The Internet is here. E-commerce is here to stay," Gov. Geringer told reporters. "The Internet as a marketplace will only grow" (Yahoo Daily News, 8/7/01). "Anyone who has ever purchased a ticket online has had a federal Internet tax collected," he continued. Gov. Geringer and others like him want to tax the sales transactions themselves, not the content of the sale. Which means that states would have the authority to tax transactions made by businesses without any discernible nexis in the state imposing the tax. If Congress agrees with Gov. Geringer, Americans will suffer a monumentous loss of liberty by way of a forgotten concept: federalism.

Oregon Death Tax Lives On, Despite Federal Action
The new law that President Bush signed this spring will gradually phase out the federal death tax. Most states "piggy-back" the federal tax, and as a consequence of the President's action, these state taxes will also shrink and disappear. But for residents of states like Oregon, a state that does not link its death tax to the federal tax, death taxes could rise. The state attorney general in Oregon thinks that the Oregon Constitution restricts state legislative authority to the state, and that for the state death tax to shrink the state would have to adopt a law linking the state's death tax to the federal tax. Voting last session to follow the federal government's lead would have saved taxpayers $20 million, but legislators refused, saying that state programs would suffer as a result of budget cuts. The issue is expected to return during the 2003 legislative session, but by then the state is expected to face a $1 billion spending shortfall.

New Mexico Surplus Tops $117 Million
The state of New Mexico collected $450 million more in taxes than expected during the fiscal year that ended 6/30/01. Governor Gary Johnson (R) recommended a $72 million tax cut in response to the surplus report. The New Mexico Legislature enacted a budget within $18 million of the Governor's recommendation, but a budget that did not include all of his recommended tax cuts. Gov. Johnson vetoed the budget because he wanted more income tax reduction. "A tax cut is affordable," said Gov. Johnson. "It is part of the economic-development equation that has to happen in New Mexico. My pledge is that I am going to push this until the day I leave office" (Santa Fe New Mexican, 7/24/01). Retaliation in the legislature stems from fears about natural gas production.

Alabama Governor Promises "No New Taxes"
Both Republican Fob James in 1994 and Democrat Don Siegelman in 1998 won after telling taxpayers that enough money was flowing to Montgomery, and that they would not raise taxes. Both Governors have stuck to their promise. Without raising taxes, Alabama approved tougher academic standards for K-12 schools, created two new universities with medical schools, and expanded its two-year college system.