Alabama, Tennessee In Special Session, Massachusetts Budget Okayed

Alabama and Tennessee legislators are in special session dealing with tax issues, while Massachusetts lawmakers cleared the way for adjournment by finally passing a budget.

The Massachusetts Legislature approved a $20.87 billion budget late last Wednesday night after four months of delays and continuous political wrangling. The House voted 155-2 and the Senate 31-4 in favor of the plan.

The budget allocates $2.8 billion for education and $42 million in new spending for prescription drug subsidies for seniors. It also makes several long-term commitments, including establishment of a tobacco settlement trust fund and modest tax cuts.

Under the plan, the state’s income tax rate will drop from 5.95 percent to 5.75 percent over the next three years. Low-income working families can also expect an increase in the state Earned Income Tax Credit of up to $180 per year.

One of the plan’s most controversial measures will occur – refinancing the Massachusetts Bay Transportation Authority (MBTA) – but without fare increases. Funding for the agency will come from 20 percent of the state sales tax with a guaranteed minimum dollar amount.

The budget also establishes a national precedent by extending Medicaid coverage to low-income people who are HIV-positive, but have not yet developed AIDS.

Legislative leaders also managed to attach a controversial measure that would dramatically weaken the state’s new campaign finance reform law, which grew out of a voter initiative. The provision would allow incumbents to raise unlimited campaign donations and still qualify for public matching funds late in their races.

With the budget finally out of the way, Massachusetts lawmakers hope to recess late next week. However, the session may be prolonged by Gov. Paul Cellucci, who is expected to veto a number of budget provisions.

Wisconsin legislators expect to wrap up their fall session by the end of this week. Still unresolved, however, is what to do about the state’s projected $1 billion surplus.

Democrats controlling the Senate delayed a vote on a sales tax rebate plan, which would send checks averaging $280 to 2.5 million Wisconsin taxpayers. The deadline for passage of the plan was midnight Thursday. Otherwise, a separate tax-cut plan that the governor shaped will go into effect. Senate Democratic leaders planned to go down to the wire in the hopes of mustering enough support for a rebate alternative.

The Senate’s inaction has also left a number of other items pending, including the lease of a private prison in Stanley and a rewrite of the criminal code before the “truth-in-sentencing” law takes effect December 31.

Tennessee lawmakers will continue their special session next week, as anti-tax legislators failed to force an adjournment of the legislature’s special session on tax reform.

Gov. Don Sundquist’s plan to impose a 3.75 percent income tax and lower sales taxes has brought protests from Tennessee residents who wish to continue to live in one of the nine states without an income tax.

The Senate Finance Committee will continue its efforts to produce a bill that the entire legislature can vote on. Although an opponent of an income tax, Committee chairman Sen. Douglas Henry (D-Nashville) said the Senate’s duty is to stay “until our business is done.”

Indiana lawmakers will return to work on November 16 to begin the General Assembly’s 2000 session. Governor Frank O’Bannon and legislative leaders agreed last week to get a head start on important business.

A number of proposals, including changing a financial tax to keep banks from moving out of state and continuing tax incentives for company investments in research, promise to receive early attention. Lawmakers will also consider what to do with Indiana’s share of the tobacco settlement money.

Other legislatures still in session include Michigan, Ohio and Pennsylvania.