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

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Florida Committee to Fight McKay Tax Increases
House Speaker Tom Feeney (R) created the "House Select Committee of the Whole" to end debate on Senate President John McKay's tax reform plan that includes new taxes on services and a slight sales tax decrease. The unprecedented House committee (including all members of the Florida State House) will act to move forward on budget negotiations without considering McKay's tax reform plan.

Hawaii Governor Proposes Tax Increases to Fix Budget
Gov. Cayetano outlined a 3-part plan to resolve state budget woes before the legislative session began last month: use $213 million of Hurricane Relief Fund moneys, raise taxes on liquor products (costing taxpayers $40 million), fatten the state construction budget by $900 million and expect $40 million in increased tax revenue from the construction projects. State Senator Brian Taniguchi (D) has held town hearings around the state and taxpayers do not seem to support the idea. Many in the state Legislature, including Speaker of the House Calvin Say (D), support a 5% cut from the state's $3.61b budget, rather than use up all of the Hurricane Relief Fund.

Indiana Budget Battles Wage War on Taxpayers
Gov. O'Bannon makes $109 million in cuts to this year's budget (home health care, campgrounds, public swimming pools) and asked the legislature to hike cigarette and gambling taxes to plug the estimated $1.3b budget shortfall. Gov. O'Bannon plans to cut $782 million from the two-year, $20.7 billion budget; he has already cut 7% from state agencies across-the-board (saving $113 million), cut Medicaid ($250 million), and cancelled pay raises ($15 million). State Senate Finance Chairman Lawrence Borst (R) proposed a sweeping tax reform plan to raise taxes on sales, income, cigarettes, and gambling while also providing property tax relief. Borst expects his proposal to be amended to H.B. 1004. H.B. 1004 moved out of the Senate Finance Committee on 2/21/02 and will be up for a full Senate vote next week. It must pass before 2/28/02. State Senate President Robert Garton (R) opposes H.B. 1004 because it contains tax increases. The Senate version includes the elimination of business inventory and personal property taxes but also includes a payroll tax of 1.5% and fails to eliminate the corporate gross receipts tax. The House version includes higher sin taxes and less tax relief.

Michigan Fuel and Gas Tax "Equalization?"
The State House debated increasing the state diesel fuel tax by 4 cents/gallon this week. Rep. Jud Gilbert (R), chairman of the House Transportation Committee will introduce the diesel fuel tax increase, with the intention of equalizing the taxes per gallon (19 cents) for gasoline and diesel fuel. It's still a mystery why the House couldn't introduce a bill lowering gas taxes to equal those levied against diesel.

Where is Governor Jesse Ventura?
The State Senate approved a $1.2 billion capital building bill that would be the most expensive public works measure in state history; including every university expansion project requested. Gov. Ventura recommended a $845 million bonding bill to achieve the same. The House also is expected to come in with a bid of its own, albeit somewhat lower. Republicans in the House and Senate and Democratic-Farmer-Laborer majority members in the Senate support a budget balancing act without the gas, cigarette, and sales tax increases that Gov. Ventura supports. The three political groups carry enough weight to enact a veto override. The latest budget estimates include a $1.95 billion shortfall for fiscal year 2002-3. The House and Senate version of budget effectively erases the shortfall, but legislative staff could not find Gov. Ventura to deliver the new budget at his office, the governor's residence, or his private home.

Oregon Cigarette Taxes Tough on Smokers
Gov. Kitzhaber's and the Legislature's plans to solve state budget shortfall differ by $350 million. Gov. Kitzhaber's plan includes increasing beer, wine, and cigarette taxes and delaying an income tax cut scheduled to take effect during the 2002 fiscal year. Republicans assert that there is not enough support in the state legislature to pass tax increases. Republicans control the state Legislature. Gov. Kitzhaber ordered another special session to begin next week.

Friend of the Taxpayer: Treasury Secretary Paul O'Neill for calling the federal income tax an abomination. Villain of the Taxpayer: Gov. Tony Knowles of Alaska for proposing a state income tax.