At Least Some Republicans Are Opposing Tax Hikes

Several posts below detail how some Republicans are caving in and supporting higher taxes in states facing a gap between projected revenue and projected spending.

There's good news, too. The Milwaukee Business Journal is reporting that, despite the election of Democrat Jim Doyle as the next governor of Wisconsin, some are optimistic he will not resort to tax hikes to fill the gap. Doyle vowed during the campaign he would not raise taxes, but the state's business community is skeptical and fear the state's first Democrat governor in 16 years will try to raise taxes to cover a projected budget deficit approaching $3 billion.

"I don't think any of us understands the enormity of the budget deficit and the strong impetus to increase taxes," said Steve Sobiek, executive director of the 500-member Independent Business Association of Wisconsin. "We need something big and bold to improve the business community without a tax increase."

Sobiek suggests repealing Wisconsin's estate tax and allowing businesses to establish medical savings accounts for employees.

Jim Haney, president of Wisconsin Manufacturers & Commerce in Madison, says his membership is optimistic that taxes will not be raised because both Doyle and the Republican candidate ran on "no new taxes" platforms. "There seems to be a will not to look to taxes first to fix the deficit," Haney said.

The business community is hoping the Republicans, who took control of the state Senate and added to their majority in the state House in the Nov. 5 election, helps Doyle keep his pledge.

Meanwhile, in Minnesota, the election of a Republican governor has business leaders hoping Gov.-elect Tim Pawlenty "will reduce regulation, build coalitions to address tough issues and radically overhaul state government in an effort to uphold his promise to stave off tax increases," reports the Minneapolis-St. Paul Business Journal.

Pawlenty's no-tax-hike stance "means he will have to cut government and find new ways to fund projects to balance a projected $3 billion budget deficit rather than saddling businesses with added costs," the paper says.

But, so far, people believe he will do his best to keep his pledge. "This is about the most-friendly-to-business administration that we've seen in recent memory," said Lawrence Jacobs, a professor of political science with the University of Minnesota. Jacobs predicts Pawlenty will pursue an overhaul of state government that will shift many responsibilities to the private sector, a "thorough raking out."

In Minnesota, "state tax revenue is expected to grow 11 percent during the next two and a half years, while spending is expected to grow 11.6 percent," the paper reports.

Duane Benson, executive director of the Minneapolis-based Minnesota Business Partnership, says the new governor recognizes that the poor economy makes this a bad time to raise taxes. "What the governor-elect is doing is saying we don't have to raise taxes, and it's doable," he said. Benson says most business people could make up the difference in the state's projected revenue and projected spending through spending cuts.

Lucky Minnesotans. Not only did they get Norm Coleman in the U.S. Senate, they've got a governor who thinks the solution to a budget gap is to reduce the spending, not raise the taxes.