States turn to fee increases to make ends meet

Tobacco, permits, bullets, brothels are considered

April 20, 2003|By Tom Gorman | Tom Gorman,SPECIAL TO THE SUN

It's more expensive now to get a divorce in Colorado and register an all-terrain vehicle in Maine, and it may soon cost more to buy ammunition in California and visit a Nevada brothel.

State politicians, loath to raise income and sales taxes, are adopting new fees and "nickel-and-dime" taxes, or increasing old ones, to generate tens of millions of dollars across the nation to make up budget deficits without angering the public.

Some of the increases, including higher tuition at colleges and higher vehicle registration fees, are drawing complaints that they will disproportionately harm lower-income families.

But other revenue sources, from higher cigarette taxes to increased state park fees, are considered politically palatable.

"States have huge budget gaps to close, and they're shying away from increases in the major taxes," said Nick Jenny, senior policy analyst at the Nelson A. Rockefeller Institute of Government in Albany, N.Y.

"They don't want to cut budgets more deeply than they have to, and they're running out of rainy-day reserve funds.

"Fees are an attractive way of raising revenue without raising taxes. Nobody's ever been voted out of office for raising fees too much," Jenny said.

Smokers are among the most popular targets. Last year, 20 states raised cigarette taxes, collecting an additional $3 billion in income, said Gene Rose of the National Conference of State Legislatures.

More are expected to do the same this year, he said. New Mexico has increased its cigarette tax by 70 cents a pack, and Nevada is debating the same, while Washington is considering a 50-cent per-pack rise.

Michigan is considering raising its daily vehicle permit fee to enter state parks by 50 percent, to $6, while Utah will no longer exempt people older than 65 from paying state park entrance fees, which range from $5 to $7.

"The budget stress drives a look at state policy issues," said Lynne Warde, director of the Utah Governor's Office of Planning and Budget.

"Should seniors get a free ride if they're driving up in a $100,000 RV?" she asked.

Most fees, adopted or under consideration as state legislatures race toward budget deadlines, target users of specific services, minimizing widespread political fallout.

To offset state cuts to their courts budget, the Colorado state judiciary has increased some court-filing fees by 50 percent. Besides increasing the fee to file for divorce to $144 from $90, filings for adoptions and grandparent visitation rights, among others, also cost more.

"We have no programs that can be cut," Colorado Chief Justice Mary Mullarkey said in announcing the increases. "We simply cannot handle the growing caseloads with the shrinking resources available to us."

Universities are also raising tuition and fees to offset cutbacks in state support.

The University System of Maryland instituted a 5 percent midyear tuition increase. Trustees at Ohio's Miami University are considering raising the tuition of in-state students to $16,300, the same amount charged out-of-state students. Ohio residents currently pay $7,600.

Public universities in Iowa and Kansas have increased their tuition this year by about 20 percent, and across the country, increases are averaging 10 percent, according to the National Association of State Universities and Land-Grant Colleges.

Schools face higher costs and more students as they get less state support, said Sally O'Briant, spokeswoman for the association.

"It's not going to be a pretty picture," she said. "The impact on students will be severe."

In California, the Legislature is debating whether to assess a dime on the sale of each bullet and shotgun shell and to add a nickel tax on each drink at a bar or bottle of alcohol, to help pay for emergency hospital services.

The Nevada Legislature is debating an entertainment tax on admission to movie theaters and concerts as well as on video rentals. Assemblywoman Sheila Lesley wants the bill to include the state's legal houses of prostitution. She is supported by the brothel industry, she said, because it would add further legitimacy to their businesses.

"If we're going to have an entertainment tax, it should include all forms of entertainment, including charging customers of brothels," she said.

Projecting income from a proposed 6 percent brothel fee is difficult, officials say, because brothel charges are negotiated.

Tom Gorman writes for the Los Angeles Times, a Tribune Publishing paper.

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