2013 March Budget & Tax News

The March issue of Budget & Tax News reports on Virginia Gov. Robert McDonnell’s controversial proposal to end the state’s gasoline tax and replace it with higher sales taxes and fees. Neither his conservative allies nor his opponents were especially pleased by the plan.

Also in this issue:

• Illinois’ government pension system, arguably the worst in the nation, will continue to worsen in the months ahead as legislators failed in their January lame-duck session to do anything to reform the system.

• The Utah Telecommunications Open Infrastructure Agency (UTOPIA), a municipal broadband program organized in 2002 by a group of communities in the Wasatch Front area of the state, is facing massive debt, low enrollment, and, despite millions of dollars in taxpayer investments, difficulties raising enough revenue to keep the system running.

• Cigarette taxes have been in the news lately, and not just because politicians keep raising them. What’s new is that state and local levies have grown so onerous in some parts of the country that they almost could be called “prohibition by price.” And like other forms of prohibition, this has led to a spike in smuggling-related criminal activity as smokers turn to illicit distribution channels.

• Actor Gérard Depardieu’s decision to flee France for Belgium to avoid a 75 percent marginal tax rate on incomes above $1.3 million sends a message we here in the United States should heed: Those who are singled out for tax increases are not stationary targets. Ways to avoid and evade the taxman are legion.

• The Harrisburg, Pennsylvania incinerator was a successful waste-to-energy plant. Then, with the stock market rising, politicians hooked up with Wall Street in a series of exotic deals to finance plant upgrades. After a decade, they’ve incinerated not just trash but cash. The Harrisburg Authority and city officials have multiplied the facility’s $80 million debt to an astonishing $340 million. Now there is no way to pay down the massive debt, save a pending sale of the facility.