Tax Pandemic Spreads to 10 States, 23 More At Risk

Now my advice for those who die, declare the pennies on your eyes. ‘Cause I’m the taxman.
—George Harrison

Following up on my post on state budgets and taxes last week, State Net Capitol Journal (May 4th edition) offers a useful, albeit depressing, review of the current tax and fee landscape in the states in this new article. Here’s a snapshot:

  • Thus far, tax and fee hikes have been passed in 10 states and are pending in 23.
  • Sales Taxes: Three states have already raised sales or income taxes (California, New York, and Kentucky). Proposals are still active in 10 other states (Arizona, Connecticut, Delaware, Illinois, Massachusetts, Michigan, Minnesota, New Jersey, Washington and Wisconsin).
  • Motor Fuel and Vehicle Taxes/Fees: Five states have already enacted motor vehicle tax or fee hikes (California, Colorado, New York, South Dakota, and Utah). Proposals to raise fuel taxes, increase vehicle registration fees, and/or rental car taxes are still active in 11 states (Connecticut, Florida, Idaho, Illinois, Maryland, Massachusetts, Michigan, New Hampshire, New Jersey, Oregon, and Texas).
  • Tobacco Taxes: Four states have already raised tobacco taxes (Arkansas, Kentucky, New York and Rhode Island), and 16 other states are considering doing the same (California, Florida, Hawaii, Illinois, Michigan, Mississippi, Nevada, New Hampshire, New Jersey, North Carolina, Oregon, Pennsylvania, Texas, Utah, Wisconsin and Wyoming).
  • Alcohol Taxes: Two states have already increased taxes on alcohol (Kentucky and New York), with proposals still active in 10 other states (California, Hawaii, Maryland, Massachusetts, Michigan, Montana, Nevada, New Jersey, North Carolina and Oregon.
  • Fee Increases: Fuhgeddaboudit—too many to possibly keep up with. Gov. Paterson alone pitched over 100 new or increased fees in New York State. If you drive, fish, boat, get married, die, and everything in between, get ready to pay more for the priviledge.

Not too long ago, current Atlanta Mayor Shirley Franklin quipped that “[o]ne of the best ways to find funds is to look in other people’s pockets.” Apparently, governors and legislators in California, New York, Kentucky and a number of other states have bought into this advice and are trying to avoid at all costs (literally) the real spending reforms that desperately need to occur.

Unfortunately, the taxpayers that get stuck with the final bill for policymakers’ perpetual spending bender don’t have any other pockets to pick but their own.

There is at least some silver lining to this story: the Heartland Institute reports that taxpayer advocates in both Maine and Florida are taking tax and spending limitation measures to the ballot. Hopefully activists in other states will follow suit.

To keep track of the ever-changing world of state revenues, be sure to check out the National Conference of State Legislatures’ handy “State Measures to Balance FY 2010 Budgets” web resource, which links to a variety of tables that break down state tax and fee hike actions/proposals by category.