|September 24-30, 2007||
Volume 5 Issue 39
FOCUS: Last-Minute Budget Agreement Reached; No Tax on Legal Services
Today’s update includes a report of the final votes cast to enact revenue enhancements and a continuation budget.
The state government endured a partial shutdown for only 4 hours, with a longer shutdown averted by early morning votes on several measures in the Senate.
Earlier in the night, the House voted out the 30-day continuation budget that would only gain final passage if one of two combinations was passed simultaneously: an increase in the income tax coupled with the extension of the sales tax to some services, or, an increase in the income tax combined with business tax loophole closures. The Senate ultimately passed the continuation budget with the income tax increase and the sales tax extension.
The income tax will be raised to 4.35%, effective immediately. The final vote in the Senate was 20-19, with Lt. Governor Cherry casting the deciding yes vote. The extension of the sales tax was also decided on a 20-19 vote, with Lt. Governor Cherry again breaking the tie-vote. The tax on services will NOT include legal services. Services to be taxed are described as being discretionary and not essential to daily life, and include some business-to-business services. The tax is effective December 1. A complete list of services to be taxed is included in the enrolled legislation, HB 5918.
With the revenue portion of the budget now decided, the legislature still must set the spending budget for the next fiscal year by enacting all of the department budgets. With the continuation budget, there are 30 days to act but leaders are hoping to act much sooner. It is expected that some $400 million in cuts will need to be made during this process.
Last Updated: October 1, 11:30 am
'Lack of Trust' Blamed for Budget Delay
Chaos Averted With Deal to Raise Income Tax, Add Tax to Some Services
At the Bar
Justices Begin Work on a Polarizing New Docket
Legal Aid Offer for Detainees is Retracted
Supreme Court Will Decide Constitutionality of Voter ID Law