NCPA - National Center for Policy Analysis

Some States Cut Taxes, while Others Hike Them

February 7, 2003

State spending has risen much faster over the past decade than Washington's, and increased last year by 3 percent. To deal with their budget problems, some Democratic governors are cutting taxes and spending, while some Republicans are advocating higher taxes, says the Wall Street Journal.

Among the Democratic governors:

  • Gary Locke (Wash.) says tax increases "will hurt, not help, our economic recovery."
  • Wisconsin's Jim Doyle is scaling back $2 billion in planned spending growth, Kathy Sebelius (Kan.) formed a citizens' commission to rein in spending, and Janet Napolitano (Ariz.) is talking about selling some state-owned assets.
  • Jennifer Granholm (Mich.) promises no delay of a scheduled income tax cut.
  • Bill Richardson (N.M.) proposes cutting the state's capital gains tax, eliminate a gross receipts tax, and chop the top income tax rate to 7.7 percent from 8.2 percent.

On the other hand, too many Republican governors support tax hikes, says the WSJ. For example:

  • Mike Huckabee (Ark.) wants to hike the state sales tax to 5.75 percent from 5.1 percent., John Rowland (Conn.) wants to increase the state's top income tax rate by one percentage point, Dirk Kempthorne (Idaho) wants a whopping 1.5 percent sales tax increase.
  • And Kenny Guinn (Nev.) wants nearly $1 billion in new taxes.

However, many GOP governors are holding the line.

  • Jeb Bush (Fla.) has held state spending down and proposes $600 million in tax relief, and Mark Sanford (S.C.) still plans the gradual elimination of his state's income tax.
  • Rick Perry (Texas) is making 7 percent cuts in state departments, and Bob Ehrlich (Md.) has put the brakes on a state budget that's grown 60 percent in the past six years.

Finally, Tim Pawlenty (Minn.) pledges to veto tax increases.

Source: Editorial, "Tax-and-Spend Role Reversal," Wall Street Journal, February 7, 2003.

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