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Entries in Spending Cuts (11)

Wednesday
Mar022011

States in the Red Try Creative Ways to Balance Budgets

Photo Courtesy - Stephen Chernin/ Getty Images(HARTFORD, Conn.) -- From Connecticut to Wisconsin, states across the country are trying to fill budget gaps with new taxes and cuts in spending.

In Connecticut, Gov. Dan Malloy is even going after coupon clippers.  As part of $1.5 billion in new taxes in Connecticut, Malloy proposes a sales tax on the original price of something -- never mind whether you get a big discount when you buy it.

Larry Dorman, spokesman for the Connecticut State Employee Bargaining Agent Coalition, said the coupon tax and the governor's other budget proposals "hit the middle class disproportionately."  He said he is also concerned about the possible repeal of a $500 property tax credit and an increase in the income tax on middle-income wage earners.

Ben Barnes the Secretary of the Office of Policy and Management in Connecticut's budget office, said that the taxes were not preferred solutions to balance the budget.  He said they were painful but necessary features of a budget proposal.  He also said Gov. Malloy's budget proposal was a "good mix of revenue, spending cuts and concessions from state employees" to balance the budget.

Dorman said the state employees union has been "constructively engaged" with the governor and "hopes to continue that process."

"This isn't Chris Christie or Scott Walker," said Dorman, referring to the governors of New Jersey and Wisconsin who have played tough with labor unions.  "So there's some reason for optimism at this early stage."

Many states are also feeling the pinch and getting creative to find financial solutions.  In January, Illinois approved an increase in the sales tax and corporate tax rates, to the dismay of businesses there.

Jimmy Patronis, a Florida state legislator, said some companies in Illinois have expressed interest in moving south.

"We have been very frugal with how we've been doing business," said Patronis.  "The cost of doing business here is very reasonable.  It has made us a little bit of a safe haven."

But Florida has a budget deficit of its own.  Florida's state legislature will begin to try to fill a $3 billion budget shortfall when it convenes on Mar. 8.  Its spring lawmaking session will last 60 days.

Patronis, in his fifth year as a representative of Panama City, said Florida will have to make a number of tough decisions to constitutionally balance the budget.

Copyright 2011 ABC News Radio

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