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States Find Ways to Raise Taxes Without Saying So

Tom Corbett, governor of Pennsylvania, speaks during an interview in New York, U.S., on Thursday, Dec. 6, 2012. Corbett intends to propose a pension overhaul in his 2014 spending plan, for the year that begins in July, according to a report. Photographer: Scott Eells/Bloomberg via Getty Images
Scott Eells/Bloomberg via Getty ImagesTom Corbett, governor of Pennsylvania.
If Pennsylvania's Republican governor gets his way, the state will pay for $1.8 billion in transportation improvements largely by raising a wholesale tax on gasoline. Yet, his spokesman insists, "it's not a tax increase."

In New York, Democratic Gov. Andrew Cuomo and Republicans who share control of the Senate boast that they have balanced the budget without raising taxes, even though a critical part of the balancing act involved extending an income tax on high earners that both sides had campaigned against in 2010.

As state government leaders struggle to reconcile public demand for services with still sluggish post-recession tax collections, they have turned to tax increases - but will call them anything but. Governors and lawmakers in several states have labeled their ideas extensions, surcharges or fees and used verbal gymnastics to explain why they aren't tax increases.

"Anything to avoid using the 'T' word is explored. They're 'revenue enhancements' or 'lifting of caps' or 'impact fees,'" said Matthew Brouillette, president of the Harrisburg-based Commonwealth Foundation, a conservative think tank.

"Of course," he added, "the ultimate result is that more money is coming out of taxpayers' wallets."

Raising taxes this year also puts a little breathing room between the laws passed in state legislatures and lawmakers' 2014 campaigns for office. Still, any opponent would likely seize on such a vote no matter when it was taken, so the labels become part of a delicate dance for politicians searching for both sources of revenue and votes for their re-election.

Strategies include taxing corporations or the wealthy more heavily while emphasizing resulting tax cuts for the middle class, or taxing businesses that will inevitably pass along the increases.

In Georgia, Republican Gov. Nathan Deal engineered an end-run of a politically sensitive vote on the renewal of a tax on hospitals that generated more than $230 million, which was used to secure about $450 million in additional federal Medicaid money this year.

Lawmakers were reluctant to jeopardize the federal funding, but many Republicans feared primary challenges next year if they voted to extend the tax, so Deal and his allies proposed replacing it with a "provider fee" designed to work the same way. Both chambers overwhelmingly approved it and the governor signed it in February.

In Connecticut, where the governor and his Democratic allies in the General Assembly touted a budget with no new taxes, this year's adjustments included extending a 20 percent increase on the state corporation tax that had been set to expire June 30. House Speaker Brendan Sharkey said it's debatable whether such actions are tax increases and sought to focus on residents rather than businesses.

"What most people care about is whether their income taxes are going up, whether their sales taxes are going up, not whether corporate taxes are going up. Those are not happening," Sharkey said this month.

In Delaware, Gov. Jack Markell and fellow Democrats who control the Legislature suggested they were actually cutting taxes by making certain temporary tax increases permanent. In those cases, they argued, the permanent rates are slightly lower than the temporary rates were at their peak. But the permanent rates are higher than the rates in place before the temporary increases were approved in 2009.

Pennsylvania Gov. Tom Corbett, who ran for office on a no-new-taxes pledge, waited until the third year of his term to advocate a plan that would accelerate badly needed highway and bridge projects and bolster financing for mass transit. Negotiations on the details continued behind closed doors days before lawmakers are expected to take their summer break.

The projects would be paid for mainly by an increase in a tax on the fuel that distributors sell to gas stations.

Right now, the tax is assessed on only the first $1.25 a gallon. Corbett proposes to phase in an increase over five years, until ultimately the full price of wholesale gas would be taxed - increasing the tax by 28.5 cents a gallon at current prices.

"This is not a new tax, nor am I proposing to increase the rate of the existing tax," the governor said in unveiling the plan in February. "I am simply saying the time has come to apply it to the full value."
It remains unclear how much of the increase would be passed on to consumers. Corbett spokesman Kevin Harley asserted that fluctuations in crude-oil prices and other factors could erase the increases that the administration projects.

"You can't say that it's a tax increase ... because there are so many variables that go into the price of gasoline," he said.

In New York, the extension of the tax on millionaires and a $500 million tax on business that had been scheduled to expire next year were critical to this year's state budget deal.

The millionaires' tax was originally approved in 2009 at the height of the state's fiscal crisis and was slated to expire in 2011. Cuomo and Senate Republicans both opposed it during their 2010 campaigns, calling it a "job killer," but then approved two extensions. The second one kept the tax alive until 2016.

Politicians in both parties emphasize that the budget keeps spending in check and reduces taxes on the middle class. They also approved $350 rebate checks to be mailed out to most families with children next year, beginning weeks before Election Day.

"The public wants a free lunch" and that's part of why elected officials eager to please constituents respond by devising creative ways to raise revenue or giving new names to tax increases, said Doug Muzzio, a political science professor at Baruch College in New York City.

"Raising taxes is verboten. You can't do it, but you have to do it," he said. "It's ubiquitous."


___
Associated Press writers Michael Gormley in Albany, N.Y.; Randall Chase in Dover, Del.; Bill Barrow and Christina Almeida Cassidy in Atlanta; and Susan Haigh in Hartford, Conn., contributed to this report.

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Nobear

talk about tax increase without saying so. Just drive around and see the assinine lowered speed limits just in tompkins county alone. They have nothing to do with safty and all about revenue. Ever check the saleries of the N Y state police assininely ridiculous.

July 08 2013 at 7:55 PM Report abuse +1 rate up rate down Reply
maloontransllc

More lies by our Goverment. I would be ok with paying more if it was used properly in the first place.

July 01 2013 at 11:21 AM Report abuse +9 rate up rate down Reply
jaguar6cy

The answer is obvious for some. Just substantially increase taxes on business. The average voter, liberals and "progressives" will be very happy with that. Of course, the cost and price of everything will go up, but they never realize or even notice it. Government does that with gasoline taxes every day. The general public thinks it is just fine and they don't even know its happening. They still think oil companies get most of the money from gasoline, and blame oil companies when prices go up. But actually government takes 400% more than oil companies from each gallon. Liberals like it because It hides the cost of government from average voters.

July 01 2013 at 7:26 AM Report abuse -4 rate up rate down Reply
1 reply to jaguar6cy's comment
sam54ct

Read the article, the majority of the States with hidden tax increeases, are Conservative States, not Liberal States.

July 01 2013 at 8:24 AM Report abuse +3 rate up rate down Reply
2 replies to sam54ct's comment
h.hughjardon

Majority?

July 01 2013 at 8:52 AM Report abuse -5 rate up rate down
setanta54s_back

uuuuuuuuuuuuh maybe this article ONLY MENTIONS the stats for ALLEGED conservative states duckie ?

July 01 2013 at 9:26 AM Report abuse -4 rate up rate down
Tom Harrell

WAH, I don't want any Taxes.
WAH I want those Roads and Highways FIXED and I want the Government to Protect MY Family from terrorists and Criminals and I want better Parks and Schools and Courts and Firefighters and Healthcare and Bridges and Airport Safety and Maintenance
----------------BUT I DON'T want no more Stinking TAXES.

July 01 2013 at 3:44 AM Report abuse rate up rate down Reply
4 replies to Tom Harrell's comment
monkutare1

Yes, Jawmore. Right on to the Fair Tax. It's a shame more t.v. and radio hosts, and congressmen aren't talking about this possible solution to a lot of our revenue problems. At least TRY it.

July 01 2013 at 3:12 AM Report abuse -4 rate up rate down Reply
MIKEY'S SCREEN

In California, Governor Jerry Brown puts a Bobble Head on TV that says "watch my lips. No new taxes" and then raises taxes (including the gas tax) while saying that "He" never said that! But that's ok, because Jerry is going to have to come up with all that new State Money to pay for all the Illegals he's going to get AND all the new State Benefits for the LGBT folks. Glad I moved out of there last September.

July 01 2013 at 3:01 AM Report abuse +3 rate up rate down Reply
1 reply to MIKEY'S SCREEN's comment
topangak9

After the last California election when the majority have-nots voted the tax increases on top of the ridiculously high taxes, I said "That's it" and left last November :) The tax payers are leaving in droves.

July 01 2013 at 7:44 AM Report abuse -4 rate up rate down Reply
1 reply to topangak9's comment
setanta54s_back

and IMHO CW2 becomes a distinct possibility.

July 01 2013 at 9:34 AM Report abuse -4 rate up rate down
ga7smi

NEWSPEAK

July 01 2013 at 12:19 AM Report abuse -1 rate up rate down Reply
topangak9

Avid, (re your post "WRONG and please stay out of California") ...

I, like a lot of the other hard-working tax-paying retirees, have left California, taking my retirement to a RED STATE and am paying about 1/4 of the taxes (state, property, car registration, gas, utility, etc) I was paying in California. There is a REASON businesses and retirees are leaving in DROVES.
You can KEEP your godforsaken state.
I am happily on my 25+ acre ranch that cost ONE FOURTH the price of my home in California and paying ONE TENTH the property taxes I was paying in California. I can now spend my time volunteering and giving back to the community instead of working my a** off to support the deadbeats and 3 million illegals (and US born children of the illegals) in California.

June 30 2013 at 11:44 PM Report abuse +1 rate up rate down Reply
1 reply to topangak9's comment
sam54ct

And thats because Red States have the highest rate of entitlement usage, thus low taxes due to the State being supported by the Feds. Great choice.

July 01 2013 at 8:26 AM Report abuse +3 rate up rate down Reply
2 replies to sam54ct's comment
h.hughjardon

And therein lies the problem.....states relying on/ hooked on federal money.

July 01 2013 at 8:54 AM Report abuse -5 rate up rate down
setanta54s_back

BS
SUPPORTED by the feds ?
SUPPORTED ?

you think we're ALL MORONS and dweebes READING SCRIPTS ?

states with SURPLUS ARE PAYING MORE TO THE FERAL FEDS
AND ARE GETTING IT BAAAAAAACK
and IT'S ALL LEGIT.
and they're NOT BEING SUPPORTED-

ALL WELFARE STATES SEND OUT LESS
so they GET LESS
AND
remain infested with PARASITES SUKKING THEM DRY
on top
of businesses and TAX PAYERS fleeing the crime and TAXATION.


and EXPLAIN HOW
THEY CHANGED THEIR COLOR CODE
labeling PRODUCTIVE conservative states
as
RED-

why they're ALL F.O.S.
the SAME AS YOU and your bs.

July 01 2013 at 9:41 AM Report abuse -5 rate up rate down
d1anaw

"Raising taxes is verboten. You can't do it, but you have to do it," he said. "It's ubiquitous."

Then be honest about it and stop playing games.

June 30 2013 at 11:12 PM Report abuse +10 rate up rate down Reply
h.hughjardon

Funny that prior to 2009 the fault was all at the federal level ( read: Bush's fault ). And now nearly five years later the left wants to go with the whole red state/ blue state Governorship and legislators since obama's economy is so effed up...while all along voting for bigger federal control and less state and local power.

June 30 2013 at 11:03 PM Report abuse rate up rate down Reply
1 reply to h.hughjardon's comment
sam54ct

You can type, so you should be able to read, it was the GOP that added over 1/2 new jobs un der Bush, thanks to creating the department of Homeland Security, now the largest Federal employer. It was Bush who doubled the military budget, and increased the Earned Income & Child Tax credits. Unitl the fools in our country wak up and realize its both parties that over spend, over hire, lie, cheat and steal, our country will continue to flounder.

July 01 2013 at 8:29 AM Report abuse +2 rate up rate down Reply
3 replies to sam54ct's comment