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1 Gregory S. Leong & Peter J. Neff, 1993 State Fiscal Prospects 1 (1992)

handle is hein.taxfoundation/srhxz0001 and id is 1 raw text is: TAXIThllfllr FOUNDATION May 1992 1993 State Fiscal Prospects B3y Gregory S. Leong IDirector of ,Special Studies lax Foundation and Peter.j. Ne/I lx AnaOysl lax loandation A new Tax Foundation survey of the 50 states reveals that new taxes in excess of $7.9 billion have been enacted or proposed for fiscal year 1993. After record tax increases of $17 billion in fiscal year 1992 and $10.3 billion in fiscal year 1991, the proposed FY'93 revenues will be the third largest increase since 1984. Three states, New York, Flotrida and Maryland, account for more than half of the total increase. New York has the largest tax increase on the drawing board - a plan to extract $1.6 billion in new revenue from a variety of measures, such as extending sunsetting provisions and increasing fees. Florida is contemplating $1.5 billion in new revenue, mostly from sales and business taxes. Matyland taxpayers, still adjusting to $90.1 million in new taxes from FY'92, are preparing themselves for a hit almost ten times as large, $875 million enacted in April of this year. Two symptoms of the nationwide recession, low personal income growth and sluggish personal consumption, continue to make a mockery of state revenue estimates. After last year's substantial increases in individual and corporate income taxes and sales taxes, lawmakers arc resorting to a variety of inventive revenue-raising measures: subjecting previously exempt items to sales tax, increasing existing fees and imposing new fees on new products and services, extending After last year's substantial increases in individual and corporate income taxes and sales taxes, lawmakers are resorting to a variety of inventive revenue-raising measures. temporary tax increases, deferring tax relief legislation, accelerating tax collections, and strengthening audit and administrative enforcement activities. All told, lawmakers will add another $7.9 billion to state coffers, totaling a record $35.2 billion in new revcnues in the past three years, $12.2 billion more than was added in the entire decade of the 1980s. A tax on video poker in Louisiana, a bigger lottery take in Texas, a new pollutants tax in Florida, doubled Dlii fines in (eorgia these new taxes and fees, along with accounting Proposed Fiscal 1993 Net Tax Increases by Major Type of Tax ($Millions) 1ax Net AiOtlt Personal Incomel $1,088.9 Busincss 880 5 Sales and ic so'137.9 Motor Fu ls i9 ,i. 2 Tobacco 467.6 Alc<h )l273.7 Alcohol Pf I Property 13. 0 Miscellancous 2,780. Total (a) $7,939.2 (a) Note: total includes $503 million in revenue ($500 million for Alabama and $3 million for W. Virginia) that is a combination of personal incomc, business, and miscellaneous taxes. Source: tax FoLindltion. changes, comprise the category known as misccllaneous taxes and make tip morc than- $2.8 billion of the newly proposcd revente. Spending more on audits is also included in this category and is an increasingly popular way to raise revenue; in fact, New York projects a whopping $165 million in new revenue from more vigilant collection efforts. By raising such prodigious sums from such obscure sources, states show how desperate they are to simultaneously raise revenue but avoid the ire of taxpayers that would be roused by higher income and sales taxes. Nevertheless, three states -Iowa, Mississippi, and Tennessee are planning to bring in nearly $1. 1billion by raising sales tax rates, and sales taxes are second only to miscellaneous taxes as state revenue-raisers this year. But far more popular than rate-raising is base broadening, that is, subjecting more products ad setwices to the current sales tax rate. Florida, Louisiana, Maryland, Minnesota,

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