State Updates
Emily Sedgwick
Week Ending 4/12/02

Representative Russell Pearce proposed a plan to impose a constitutional cap on state spending linked to inflation and population growth and requiring a popular vote to approve tax increases. The plan is similar to Colorado\’s TABOR amendment. Pearce\’s bill failed by one vote 4/10/02 (Arizona Daily Star, 4/11).

The House voted 4/7 to increase per-pack cigarette taxes by $1 to fund a $1.3 billion school spending plan. The $1 increase was previously passed in the Senate (Washington Post, 4/8).

Senate Democrats backed down on a proposal to increase corporate fees, although they still maintain support for a 60 cents per-pack cigarette tax hike. House Republicans plan to rely on tobacco settlement funds rather than tax increases to solve the state\’s $439 million spending shortfall (Minnesota Public Radio, 4/12).

Governor Johanns cut $74 million from the budget, Legislative Bill 1309, so as to avoid tax increases (Omaha World-Herald, 4/10).

House Bill 2041 would cut the state income tax from 7% to 5% and repeal the state death and state business taxes. A tax reform task force has convened and supports reducing the state income tax to 4.35%, capping the capital gains tax at 2.35%, expanding the 4.5% sales tax to include services, and increases the per-pack cigarette tax from 23 cents to 60 cents.