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

Florida, Hawaii, New York Economies Hit Hardest
The terrorist attacks of September 11, 2001, will hurt states that derive greater revenues from tourism, say officials in Florida, Hawaii, and New York. Florida Gov. Jeb Bush (R) said he will likely call a special session later in the month because 32% of the state's $48.2 billion annual budget comes from sales taxes and tourism. The state already faced a $265 million shortfall before 9/11. Hawaii Gov. Benjamin Cayetano (D) said his state depends on the tourism industry for more than 25% of the state economy. New York officials have said within the last two days that the state economy is in dire trouble as a result of the attacks on the World Trade Center.

Iowa Governor Refuses to Raise Taxes
Gov. Tom Vilsack (D) said on 9/4/01 that he has ruled out across-the-board spending cuts as well as tax increases to keep this year's $4.9 billion state budget in balance. The Governor said that he would have a plan by the end of the month for review, but that he did not think a special session of legislative action would be necessary to approve his recommendations. State revenues were projected to grow 4.5% during the budget year, but a sluggish economy has forced analysts to revise these projections. Gov. Vilsack's advisors have said that selective cuts are preferable to cutting the whole budget. "[We increased taxes] in the 80s and 90s when we were faced with a situation like this," Gov. Vilsack said. "There are better ways. We can improve government, and we can manage this situation," (Des Moines Register, 9/6/01).

Tennessee Governor Likely to Announce Cuts
Gov. Don Sundquist (R) is expected to announce budget cuts of more than $50 million, impacting adoptions, libraries, audits of taxpayer money, care for the elderly and disabled, driver's licenses, and other numerous state agencies. The largest cut is to the Department of Corrections, saving taxpayers $20 million. The Governor is trying to meet a target of a $110 million cut set by the legislature. The $19.6 billion budget was passed over the Governor's veto on 8/7/01.

Virginia Regional Tax an Issue for Campaigns
Candidates for Virginia Governor Mark Earley and Mark Warner have chosen as a recent focus the regional sales tax referendum that will appear on the November 6 ballot. Although the referendum process is a positive one that allows voters (rather than their tax-and-spend "representatives") to decide issues themselves, this particular referendum, if passed, would create a regional sales tax to pay for transportation developments. The referendum would add a half-percentage point to Virginia's 4.5% sales tax rate, forcing local taxpayers and visitors to the region pay the same 5% sales tax that Marylanders do now. The referendum process is a good one, but the subject matter of this one leaves much to be desired.

New Jersey Legislature Canceled Vote on Stadium Fund
Financing for the Newark Sports Arena will not come from taxpayers, at least as long as opposition from both New Jersey residents and the legislature remains strong. The proposed $355 million sports arena project did not have a convincing self-finance plan to pay for future costs incurred, nor were the start-up costs put to voters in a referendum, according to legislators who opposed the project. Funding for the project would have come out of sales tax revenues, and if these funds proved inadequate to cover the issuance of $190 million in bonds, resident taxpayers faced a possible hike.

Georgia Legislator Has Vision of Chandra Levy
State Rep. Dorothy Pelote (D-149) announced 9/6 to her colleagues from the speaker's rostrum in the Georgia House, "The last person who visited me was - I don't know if I need to call her name. Maybe I should not, because it's a controversial death now. She's missing. You know who I'm talking about. She has visited me. She has." Rep. Pelote, a 71 year old former schoolteacher, later told reporters that she "saw" Levy lying in a ditch with her eyes closed. Pelote has filed bills in the past to keep grocery store sackers from licking their fingers to separate bags, to ban students in middle school and high school from having long fingernails, and to outlaw bungee jumping. Atlanta Journal Constitution, 9/7/01.

Indiana Representative Suggests Tax Reform
Dan Dumezich (R-15) sent a letter to Hoosier taxpayers 9/5/01 recommending that Indiana reduce its reliance on property taxes as a source of revenue for welfare and school funding, and that the state eliminate inventory taxes.