In the News

Tax Alert
A bi-weekly Report by D. Ansell
Volume 6 Issue 5
March 4^th, 1999

*Minnesota surplus grows-- tax cuts are warming up!

The Star Tribune reports that the budget surplus is projected to grow to $500 million according to the Governor’s Office. This would be in addition to the $3.3 billion surplus reported late last year. This will be the 14th consecutive surplus projected, and taxpayers are anticipating a tax cut.

Gov. Jesse Ventura (I) proposes a $1.1 billion sales-tax rebate while House Republican’s are considering a $1.5 billion income-tax/property-tax rebate. One might think that if you have 14 consecutive surpluses over a six year period that the Legislature would consider permanent tax cuts! The Governor has indicated his desire to cut income taxes by $844 million by the end of FY 2001 and Republicans are urging deeper permanent cuts. Tax Alert will keep you posted.

*Michigan Governor signs tax cut into law:

Gov. John Engler (R ) signed an income tax cut into law on 2/26/99. The cut will drop income taxes from 4.4 percent to 3.9 percent in 2004, the lowest that it has been since 1974. "1974 seems like a long time ago, and it was the last time Michigan saw a tax rate as low as 3.9%," Engler said.

*Surprise Surprise vehicle owners get two-timed in Arkansas

As was reported recently in Tax Alert, car and truck drivers are facing a two- headed monster. First the Arkansas Highway Commission is set to apply for permission to establish 108 toll booths charging between 25 cents and a dollar on federal highways.

Now Gov. Huckabee (R) has given his blessing to a gas tax increase, both on diesel and gasoline. The plan (HB 1548) would raise the state tax on diesel fuel 3 cents per gallon and the tax on gasoline 3 cents, to be phased in over three years. Both now are 18.6 cents. The bill needs 75 percent majorities in the Legislation to be approved.

* Rainy Day Fund Clarification—

Senate Democrats in Oklahoma have done a great thing for Americans across the nation. On 3/3/99, they passed SB 101 and sent it to the House. SB 101 would require the Oklahoma Water and Resources Board to create a division responsible for increasing chances of rain, through cloud seeding.

The bill levies a $3 per every $1,000 fee on insurance policies for casualty, property and multi-peril insurance sold in the state, generating $3 million per annum.

"What more appropriate use of the Rainy Day Fund could there be than to make rain?" said Sen. Gene Stipe, D-McAlester.

Meanwhile Senate Democrats berated Gov. Frank Keating’s (R) plan to privatize the state golf courses. He has proposed selling 10 of 11 state-owned golf courses.

Sen. Littlefield (D) said of the governors plans to privatize, "It may look good on paper, but will it work?" He concluded by responding to the Governor’s demand that inefficient programs should be eliminated by saying, "What inefficient programs?, We need specifics."

We at Tax Alert could help you out on that, can you say rain creation? A question worth pondering...if Oklahoma thinks it can control the rain for just $3 million, how much could it cost for the federal government to create a national weather machine?

* Connecticut Governor becomes 8th incumbent to sign pledge--

Gov. John Rowland (R) signed the Taxpayer Protection Pledge on 3/3/99 against any and all efforts to raise taxes. He has been nominated for the monthly "Hero of the Taxpayer" award but faces competition from Gov. John Engler.

* Enemies of the Taxpayer:

Quite a few nominations have been received, but the North Dakota Natural Resources Committee (House) is leading the charge. They passed HB 1108 out of committee and pushed through the House this bill taxing Internet access.

This bill would tax Internet access by 2.5% on adjusted gross receipts of carriers. This bill violates the federal moratorium forbidding Internet taxation for a period of three years.

Fax/e-mail or call ATR with your nominations or votes for heroes and enemies of the month to Damon B. Ansell.