Tax increases a regretted necessity for GOP governors

Mark Niquette
Bloomberg News

Washington – — Republican governors meeting in Washington this past weekend said financial conditions in their states have deteriorated so much that they must raise taxes, even if it means crossing their own party.

In the face of a historical antipathy deepened by the tea party movement, chief executives in Alabama, Nevada and Michigan among other states are proposing increases this year to address shortfalls or to spend more on faltering schools and infrastructure. They advocate higher levies on businesses, tobacco, alcohol and gasoline, in some cases casting the increases as user fees.

The governors are at a crossroads. They are choosing between the path of Gov. Sam Brownback in Kansas, who has refused to change course even after tax cuts provoked furious opposition, and that of Alabama's Robert Bentley, who has said the state's perennially precarious budget has reached the breaking point.

“I don't want to raise taxes, but I also know that we need to pay our debts,” Bentley said in an interview. “We don't have any choice.”

Governors in about 10 states, many led by Republicans, are proposing increases this year, said Brian Sigritz, director of state fiscal studies for the National Association of State Budget Officers in Washington. Several plans involve raising fuel taxes to pay for crumbling roads and bridges, while Republicans including John Kasich in Ohio and Maine's Paul LePage want higher sales or other levies to offset income-tax cuts. The burden of such taxes falls more heavily on the poor, who spend a larger proportion of their income.

In Nevada, two-term Republican Gov. Brian Sandoval has proposed $1.1 billion in new or continued business, tobacco and other taxes to pay for education and initiatives such as expanding full-day kindergarten.

He said he has no choice with a shortfall caused by declining mining and gambling revenue, as well as a need to spend more on an education system that has the worst high-school graduation rate in the U.S.

His proposal has drawn opposition from Republican officials such as Treasurer Dan Schwartz, who said voters rejected two similar proposals in November and that Sandoval has “divorced” himself from state Republicans.

Sandoval said there are Republicans who support his plan, and that business leaders want better-educated workers.