Tax Talks Already Under Way

Emerging budget gaps already are leading to talk of new or higher taxes and fees in some states, well before lawmakers return for regularly scheduled legislative sessions early next year.

An opinion by the Colorado attorney general that medical marijuana “is a tangible property that is generally subject to state sales tax” could provide much-needed revenue for state and local governments, The Denver Post reports . Gov. Bill Ritter (D), meanwhile, is pushing for a new tax on candy and soda, one that would make Colorado “one of a growing number of states and localities going after candy bars and soft drinks,” The Post reported earlier this week .

Kentucky legislators and others were surprised to hear Gov. Steve Beshear (D) raise the possibility of raising the cigarette tax for the second consecutive year, the Lexington Herald-Leader reports . While even Beshear acknowledges that such a plan is unlikely to pass – Kentucky is a major tobacco state – a spokesman for the governor stressed that further revenue increases need to be on the table as the state deals with “tremendous budget challenges.”

In Washington state, “we just cannot afford to make another $2 billion cut out of state government,” one of Gov. Christine Gregoire (D)’s economic advisers told The Daily Herald of Everett . While legislative budget-writers haven’t uttered the ‘T’ word yet, “I absolutely think we should,” Jeff Chapman said.

In Florida, state officials are talking about hitting corporations with new, mandatory fees if they fail to file annual reports on time, The Miami Herald notes . The move could raise $30 million.

In Alabama, lawmakers are taking a different approach. They are talking about raising the income threshold at which low-income residents must paying taxes – a proposal that would shrink state collections, according to The Birmingham News . Recognizing that 2010 may not be the right year to shrink the state’s tax base, however, discussions are under way to find replacement revenue somewhere else, the paper notes, including middle- and higher-income earners.