Rep. Scott Ogan (R) introduced a bill to allow Alaskans to make voluntary donations from their dividend checks to local education as a possible solution to $1.1b budget shortfall. Gov. Knowles proposed an income tax that would cost the average Alaskan 3% of his/her income, costing all taxpayers $350m/yr. Scott Goldsmith, an economist with the University of Alaska Anchorage, estimated that Gov. Knowles\’s income tax would cost the Alaskan economy 3,500 jobs. Rep. Bill Hudson (R) sponsored H.B. 199, which would tax 1% of adjusted gross income the first year and an additional 2.25% the following year.
Gov. Siegelman proposed funding pay raises for state employees via oil and gas tax hikes; the State Senate agreed to a carryover after many lined up to fight the idea. Gov. Siegelman proposed a flat fee of 86.7 cents per barrel of oil and 9.2 cents per million cubic feet of natural gas, costing taxpayers an estimated $20m per year.
Republican and Democrat leaders in the State Senate could not compromise on a pay raise for state employees, and then failed to agree on a 2002 budget; leaders then agreed to shut down the Senate. The House of Representatives also shut down because of the proposed 5% pay raise for state\’s 60k employees. Gov. Hull postponed Employee Appreciation Day after 1k state workers rallied at the Capitol for the pay increase.
State Rep. Peter Groff (D) proposed a "Jock Tax" on professional athletes, costing them between $4 and $10 million/year.
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 pursuing consideration of McKay\’s tax reform plan.
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, and most seem reluctant to raise taxes or tap the Hurricane Relief Fund.
The House Revenue and Tax Committee voted 15-1 for H.B. 651, continuing to provide a tax credit of $500 per job for businesses that create new jobs. The tax credit was originally part of the 2001 tax cut package. An omnibus bill containing 3 and 4% cuts for state agencies may come up for a vote this week.
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 simultaneously 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.
Governor Patton supports tax reform that would result in neutral shifts in revenue, but many members of the Legislature say they are unlikely to raise taxes, although H.B. 147 passed the House 49-47. H.B. 147 would increase tax on drink containers and fast food cups by ½ cent, costing taxpayers $30 million/year. The bill is unlike to pass the Senate.
The State Senate voted against a pay increase of $70,000 for Gov. King. The House is expected to follow suit. Maine\’s estimated budget shortfall was revised early in the morning on 2/22/02, an improvement of $91.2m less than the anticipated shortfall. The unexpected windfall has already been allocated to human services, a project to index the state income tax rates to inflation, and to bring the ME tax code into conformity with the federal tax code.
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.
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.
Gov. Johanns reaffirmed his no-tax-increase promise when confronted with sales, income, and services tax increase proposals. He said he would veto increases in state tax rates and any expansion of the state sales tax base. The latest estimates indicate that Nebraska faces a $150 million budget shortfall.
Last June, lawmakers made the state property tax permanent after three years of temporary service in an attempt to fund public education. The bill passed the state House by a very slim margin last year. Rep. Terie Norelli (D) told the House Ways and Means Committee that in order to adopt funding alternatives for education, the legislature must pass her bill to repeal the property tax.
Gov. Johnson vowed to veto the budget proposed by the Legislature. The budget contains multiple tax increases on tobacco products.
State Senator Bryan Williams (R) promised to introduce a bill to expand school vouchers, including children in 35 school districts (Akron, Canton, etc.). Those districts affected would be those classified as "academic emergency" districts. Rep. James Trakas (R) proposed doubling the amount of the vouchers (currently a maximum of $2,250).
State House members debated whether to roll back income tax increases triggered by sinking revenue estimates. The bill, H.B. 2422, did not reach the House floor.
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.
Rep. Mike Jaspers persuaded House State Affairs Committee to add a temporary 2 cent/gallon gas tax increase to a bill that provides subsidies for ethanol producers. The Committee voted 11-2 to send the bill to the House floor. The tax increase would cost taxpayers $30 million/year and would allow the federal government to provide the state with $130 million in matching funds for transportation. Action was delayed 2/21/02 on the House floor and there may not be enough votes to move forward.
House Speaker Jimmy Naifeh unveiled a no-new-tax-increase budget on 2/21/02 called "The Downsizing Ongoing Government Services Budget," with acronym D.O.G. Rep. Naifeh\’s version trims Gov. Sundquist\’s proposed budget by $782 million.
The most recent budget shortfall estimate is a shortfall of $3.8 billion over the next 29 months. The House of Delegates and the Senate each adopted budget plans and rejected each other\’s; the budget must be agreed upon by 3/9/02. House Republican\’s were attacked for slashing $130 million in specific school programs and adding $160 million in funds for basic education. Gov. Warner has proposed raising the state sales tax from 4.5% to 5% to fund public education. Two House committees, Appropriations and Finance, may kill the sales tax referenda that have already passed the Senate. The referenda detail a state-wide sales tax increase and a regional sales tax increase for Northern Virginia. House Speaker Wilkins (R) said he didn\’t think the referenda would survive the committees. A 1-cent per-pack cigarette tax increase died a quick death in the Senate.
Recent budget shortfall estimates are $1.6 billion less revenue than anticipated. The shortfall may result in lawmakers imposing a state hiring freeze, raising taxes, cutting programs, and stalling pay raises for state workers. Gov. Locke shied away from overt support for broad-based tax increases on sales or business, but expressed mild support for the concept if other solutions weren\’t forthcoming. House Democrats proposed 2/21/02 to increase gas taxes by 8 cents/gallon, raising money for a $5.6 billion statewide transportation fund.
State GOP vice-chairman Kris Warner criticized Republican State Senators who voted for the Simplified Sales Tax Cartel (SSTP). SSTP will cause states like West Virginia to join an inter-state sales tax cartel studying how to tax Internet commerce.
The Joint Appropriations Interim Committee already cut $91 million from Gov. Geringer\’s $1.5 billion budget proposal. Wyoming is one of the only states in the Union to carry a surplus. Current estimates of the surplus are $127 million.