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A newsletter covering news and views on government spending, published by The National Center for Public Policy Research, 501 Capitol Court, N.E., Washington, D.C. 20002, (202) 543-4110, Fax (202) 543-5975, E-mail [email protected], Web http://www.nationalcenter.org.


Issue #38 * May 15, 2000 * David A. Ridenour, Editor


 

Taxes in Louisiana May Skyrocket While Other States Cut Them

In an era of skyrocketing government revenues thanks to the booming economy the state of Louisiana is apparently concluding that $377 million in new taxes will be needed just to make ends meet.

The tax increase, proposed by Governor Mike Foster (R), and currently under consideration in the legislature, is in sharp contrast to a dozen other states that have recently cut taxes.

Arizona, Connecticut, Illinois, Kansas, Massachusetts, Minnesota, New Mexico, Oklahoma, Pennsylvania, South Dakota, Tennessee and Virginia have all approved significant tax cuts in recent years.

Recent State Tax Cuts

Arizona: $120 million in tax rebates
Connecticut: $124 million in tax rebates
Illinois: Income/property taxes cut $125 million
Kansas: $250 million across-the-board tax cut
Massachusetts: $770 million multi-year tax cut
Minnesota: $1 billion in tax relief
Oklahoma: $142 million in tax cuts
Pennsylvania: $123 million in tax cuts
South Dakota: 5% property tax cut
Tennessee: $2 million sales tax cut for farmers
Virginia: $435 million two-year tax cut

Source: Americans for Tax Reform

 

Post Office Ignores Potential Cost Savings, Proposes Hike Up to 15%

Americans are in agreement on one point: Gasoline prices, which recently hit record levels, are too high. But we do have something to be grateful for: Over the past four decades at least, gasoline prices haven't risen as much as U.S. postage.

In 1962, a first class stamp was four cents. Today it is 33¢, and the Postal Service wants to raise the price by another penny.

What's worse, over a hundred million Americans could be hit even harder by a postage rate increase 3-5 times higher than the 3% increase the post office is seeking for first class mail. The Postal Service wants to increase postage rates for magazines and newspapers by 10-15%.
The 166 million Americans who subscribe to magazines will be hit hardest by this. They'll have to eat these costs via subscription rate increases. If they don't, and in some cases, they won't, some magazines will cease to exist.

A price increase up to 15% isn't necessary. A two-year task force identified ways to cut the Post Office's costs in delivering magazines by $150 million.

If the Post Office adopted these measures, the postal rate increase needed to cover costs for magazine delivery would only have to be 7.5%, not 15%.

Postmaster General Henderson has indicated that he agrees that magazine postage rate increases could be kept below 10%.

Nevertheless, on January 12 the Postal Service announced up to a 15% rate increase in magazine postage. The potential cost savings identified by the task force weren't taken into account.
Why not? One theory is that Postal Service management simply hasn't gotten around to it.

But with the very survival of some publications in jeopardy if the 15% price increase is approved, and circulation numbers at risk for all publications, publishers are worried. And the increase could hurt the Post Office, too, because it is in the Postal Service's interest to make certain publishers aren't driven out of business or even suffer lower circulation rates.

by Amy Ridenour


Nothing written here should be construed as an attempt to help or hinder legislation before the U.S. Congress. Reprints of material in Budget Watch is permitted provided that original source is credited. ###


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