Plus: Growth & Taxes
How outdated state tax systems are undercutting economic vitality.

Penelope Lemov

The Insurance Lottery
When states subsidize health insurance, the hardest part is deciding who gets help and who doesn't.

Peter Harkness

Falling Bridges
As aging infrastructure becomes harder to ignore, governments look for new ways to finance solutions.

California

Democrats Eye Wide Range of Tax Hikes

Los Angeles Times

As lawmakers hunt for politically palatable solutions to the swelling budget shortfall, some Democrats are proposing unorthodox ways to generate cash. Strip clubs, six-packs, grocery bags and iTunes downloads are all in their sights. So are gas guzzlers and yachts—and a tax loophole for criminals. GOP lawmakers say the majority party simply has an insatiable appetite for taking money from Californians.

Georgia

Law Opens Way for High-Deductible Health Plans

Atlanta Journal-Constitution

Gov. Sonny Perdue signed legislation aimed at making high-deductible health-insurance plans more affordable and more widely available. Paired with new health savings accounts, the high-deductible plans encourage consumers to be more responsible for their own health care, Purdue said.

Massachusetts

Lawmakers Eye Taxing College Endowments

Boston Globe

Lawmakers desperate for additional revenue are eyeing the endowments of deep-pocketed private colleges to bolster the state's coffers by more than $1 billion a year, asserting that the schools' rising fortunes undercut their nonprofit status. Legislators have asked state finance officials to study a plan that would impose a 2.5 percent annual assessment on colleges with endowments over $1 billion.

Tennesee Governor Plans Buyouts to Cut 2,000 Jobs Nashville Tennessean

Tennessee state workers welcomed news from Gov. Phil Bredesen that his administration hopes to use voluntary buyouts rather than layoffs to trim the payroll by about 2,000 employees.

California

Senate Leader Drops Recall Push Against GOP Foe

Sacramento Bee

Citing the prospects of another lengthy state budget stalemate, Democratic state Senate leader Don Perata dropped his campaign to recall Republican Sen. Jeff Denham—a development that surprised even Denham. Perata launched the recall effort after Denham angered him during last year's 53-day state budget stalemate by joining his GOP colleagues in voting against the spending plan.

Texas

Oil Boom Brings $10.7 Billion Surplus

Houston Chronicle

The nation may be on the verge of a recession, but the Texas economy is doing well enough for Comptroller Susan Combs to predict that the legislature will have a $10.7 billion surplus when it convenes in January. Much of the extra money can be attributed to record oil prices: Oil and gas employment in Texas has been booming, the comptroller's office reported.

Alabama Lawmakers OK $2 Billion Budget Huntsville Times

The Alabama Legislature sent Gov. Bob Riley a $2.01 billion general fund budget that depends, in part, on an appeals court's restoring $63 million to the fund and an uptick in the state's economy.

California GOP Leader: No Tax Hikes Sacramento Bee

Saying the ailing economy is putting enough stress on California taxpayers, Senate Republican leader Dave Cogdill said Republicans will oppose any tax hikes to bridge the state's budget deficit.

Georgia

Governor Signs Tighter Dog-Fighting Law

Atlanta Journal-Constitutions

Five months after Atlanta Falcons star Michael Vick was sentenced to prison for his involvement in dog fighting, Gov. Sonny Perdue signed legislation stiffening Georgia's dog-fighting laws, which the Humane Society of the United States says were among the weakest in the country. The new law makes it illegal to train, transport, sell or own a fighting dog. It also will be illegal to promote, advertise or attend a dog fight.

Winfrey Boosting Pennsylvania Puppy-Mill Crackdown Philadelphia Inquirer

Talk about a lobbyist with clout. Oprah Winfrey is planning to appeal to viewers to back a crackdown on puppy mills in Pennsylvania, reading excerpts from a letter Gov. Ed Rendell sent her last month seeking support for the legislation.

California

GOP Leader: No Tax Hikes to Fix Deficit

Sacramento Bee

Saying the ailing economy is putting enough stress on taxpayers, Senate Republican leader Dave Cogdill said Republicans will oppose any tax hikes to bridge California's budget deficit. Cogdill suggested the deficit, which he pegged at $16 billion for the fiscal year beginning July 1, could be wiped out through service cuts and tapping into the reserves of voter-approved initiatives.

Colorado

Ballot Measure Targets ... Ballot Measures

Denver Post

Colorado lawmakers approved a ballot measure that would ask voters in November to make it harder to amend the constitution by increasing the number of signatures needed to put constitutional amendments on the ballot, while decreasing the number needed to change state law. Most lawmakers agreed that there have been too many initiatives changing the state constitution, sometimes at odds with each other.

Ohio

A.G. May Face Impeachment in Sex Scandal

Akron Beacon Journal

With Attorney General Marc Dann refusing demands from fellow Democrats that he resign over a sexual-harassment scandal and an extramarital affair with a subordinate, Gov. Ted Strickland said Democrats will begin drafting an impeachment resolution against Dann. Republican House Speaker Jon Husted said his chamber, which takes the first step in any impeachment, was already reviewing the process.

Rhode Island

Governor Vetoes 24-Hour Gambling

Providence Journal

While lawmakers have been counting on round-the-clock gambling on weekends and holidays at casinos in Newport and Lincoln to raise upward of $14 million in new money for the cash-strapped state, Gov. Donald Carcieri has vetoed the legislation. In his veto message, Carcieri repeated his reservations about forcing expanded hours on two communities that have said they do not want it.

Connecticut

Lawmakers OK Big Cuts in Greenhouse Gases

Hartford Courant

The state Senate gave final—and unanimous—legislative approval to a tough new bill requiring drastic reduction of greenhouse gas emissions connected to global warming, and the GOP leader in the Senate said he expects Republican Gov. M. Jodi Rell to sign it into law. The bill would force state agencies come up with strategies to meet the new reduction goals and start measuring the state's progress.

California

Cash Crunch Adds Pressure for On-Time Budget

Sacramento Bee

California is facing a cash crisis this summer, putting pressure on elected officials to submit an on-time state budget or risk asking taxpayers to pay a premium on loans. A lack of cash reserves this year combined with lagging revenues has led officials to predict that the state will run out of cash as early as August, giving lawmakers a smaller-than-expected window to strike a budget deal.

$5 Billion Sought for Crumbling California Courthouses Los Angeles Times

Higher fees for parking tickets, traffic school, criminal convictions and civil court filings would pay for $5 billion in improvements to California's deteriorating courthouses under a proposal announced by the state's chief justice and legislative leaders.

The Nation

Gas-Tax Holidays Getting State-Level Push

New York Times

Rising frustration with gas prices has led two presidential candidates, Sens. John McCain and Hillary Clinton, to promote proposals to suspend the federal gas tax from Memorial Day to Labor Day. But state gas taxes, which run as high as 45.5 cents a gallon, often add far more to the price of gas than the 18.4-cent federal excise tax. So lawmakers and candidates at the state level have been getting into the act.

Colorado

Speaker to Take Budget Fix to Voters

Denver Post

House Speaker Andrew Romanoff said he will take his case for undoing revenue-limiting mandates of the state's Taxpayer Bill of Rights directly to voters, a move sure to ignite a fierce ballot battle. Romanoff said collecting the 76,000 signatures needed for a ballot initiative will be easier than persuading two-thirds of the House and Senate to support the proposal and that he will pull the plug on the stalled legislation.

Arkansas Revenues Up Slightly from ’07 Arkansas New Bureau

Arkansas state revenues came in near target in April, beating the fiscal forecast by 2.4 percent, or $12.9 million. But while net available general revenues totaled $552.1 million in April, that was just $1 million more than in April 2007.

South Carolina

Study Set for Statewide WiMax

The State of Columbia

A fight is looming over whether South Carolina should become the first state to adopt WiMax technology statewide, providing wireless Internet to every home, school and business. Some lawmakers say only rural areas should get access; others want it available to everyone for an affordable rate. House lawmakers voted to appoint a panel of seven private-sector tech experts to study options and make recommendations.