State Legislators Convene in Indianapolis

Health care, education, crime, electric deregulation and tax policy dominate the agenda of the National Conference of State Legislature's (NCSL) annual meeting here, as over 1,100 state legislators representing all fifty states gather to share information and form policies for upcoming legislative sessions.

Highlighting the meeting's first two days was the release of the NCSL's most recent survey of state budget and tax actions.

The survey reports that at the end of fiscal year 1999, aggregate state balances (a combination of general fund and rainy day fund balances) totaled $33.4 billion. This figure represents 9.4 percent of fiscal year 1999 general fund spending.

Former North Carolina House Speaker and NCSL President Dan Blue pronounced the states' general fiscal condition excellent.

"States are in good shape. Each state is a little bit different, but the general picture is very positive," Blue said.

Continued strong revenue growth left most states with the dilemma of figuring out what to do with excess revenue. Seventeen bolstered their rainy day or other reserve funds, twenty cut taxes specifically to reduce excess revenues, thirteen targeted specific programs for funding increases and thirteen channeled surplus revenues into capital construction projects.

The tax cuts have been undertaken in a prudent fashion, allowing for more permanent tax cuts than single year reductions, Blue said.

State legislatures lowered taxes for the fifth consecutive year, approving a net tax reduction of $5.5 billion.

Spending priorities continue to include elementary and secondary education, job retraining and infrastructure investments, particularly in transportation systems. The high surplus levels have allowed legislators to attack problems in creative ways, Blue said.

"That's the magic of having 50 laboratories to experiment in," he said.

Some states have included anticipated tobacco settlement revenue into their budgets, even though no state will see a nickel before the end of fiscal 2000. According to the NCSL survey, at least 14 states have counted tobacco money in their fiscal 2000 revenue forecasts and 13 have appropriated all or part of that money.

Half the states created trusts funds to receive the payments, with most identifying specific purposes and amounts for those funds. Thirteen states have deferred action on the issue so far.

According to NCSL Executive Director William Pound, most states will use the tobacco settlement funds to target children's health issues, though education funding has popped up as another possible use for the funds.

In other action, the NCSL is expected to adopt a resolution calling for simplified and more uniform sales tax structures to deal with the thorny issue of taxing Internet commerce.

The resolution also calls for remote sellers to collect and remit sales taxes to each online purchaser's state and "continue to oppose any federal action to preempt the sovereign and Constitutional right of the states to determine their own tax policies in all areas, including telecommunications and electronic commerce."

The agenda for the rest of the week includes a Wednesday business meeting to elect a new NCSL president and special briefings on school violence, utility deregulation and suits against gun manufacturers.