The House considered a plan to institute a state-wide sales tax and tap Permanent Fund reserves 3/27. The House Republican Majority Caucus seems to favor a 3% state-wide sales tax in addition to the current 3% local option sales tax, thereby doubling the sales taxes for many residents and tourists (Juneau News-Miner, 3/27).
House Speaker Tom Feeney agreed to a ballot measure that would ask voters to approve the creation of a 12-member tax reform committee with the power to levy sales taxes against services by a 2/3 supermajority vote. A special legislative session is scheduled for 5/02 (Miami Herald, 3/24).
House Republicans support eliminating food and medical services taxes and cutting unfilled state jobs to help balance the state budget. Democrats propose using $100 million from the $217 million Hurricane Relief Fund, but the Hurricane Relief Fund board recommends using funds for hurricane emergencies only. The Senate began consideration of the House budget proposal, including less reliance on the Hurricane Relief Fund, less support for tax increases, and cutting empty state employee positions (Honolulu Advertiser, 3/25; 3/26).
Governor Angus King signed a $160 million supplemental budget into law 3/25, including school district, local education spending increases, and #37 million in spending to offset the impact on state revenues that federal tax cuts have on state piggy-back taxes like the death tax. Over the last year, the state Rainy Day fund has fallen from $100 million to $15 million (Bangor Daily News, 3/26).
The Senate voted 38-28 in preliminary action to approve $914 million in new cigarette taxes over the next four years. House Republicans remain steadfastly opposed to any tax increases and instead support cutting state spending. The Legislature must approve budget-balancing revisions before 5/21 or Governor Jesse Ventura can enact "unallotment" privileges and carve up the budget himself (Minneapolis-St. Paul Star Tribune, 3/26).
Governor Mike Johanns and many legislators support $110 million more in education, Medicaid, and corrections spending, as well as sales and cigarette tax increases, as the budget debate continues (Omaha World-Herald, 3/25).
The 2004-05 budget year will include a $200 million shortfall because the Legislature cannot approve a long-term spending solution this year. The state death tax was repealed, saving taxpayers $35 million annually. If the Senate and Governor Jeanne Shaheen agree to repeal the state-wide property tax, the state will have to cut $1 billion in spending to compensate. Gov. Shaheen has not said publicly whether she supports repeal or not; the vote will be close in the Senate (Foster\\\’s Daily Democrat, 3/25).
A 12-member bi-partisan legislative committee was formed to recommend budget revision. Governor Gary Johnson supports revenue-neutral budget revisions; revisions must be completed by 6/30 (Albuquerque Tribune, 3/25).
Governor Bob Taft alluded to tapping the state\\\’s rainy day fund and has not ruled out tax increases to deal with this year\\\’s spending shortfall (Columbus Dispatch, 3/26).
The House Appropriations Committee approved a state budget without increased health care spending or cigarette tax increases (Rutland Herald, 3/26).