Nibbles by the Million

While the U.S. taxpayer goes through the $77 billion tax bite necessary to feed the new federal budget, he stands to be nibbled by piranha attacks of increased state taxes. Combined budgets of U.S. Governors as 46 legislatures convene this year*to consider fiscal matters: more than $17 billion, an increase over current expenditures of about $1 billion.

The bulk of state funds will go for the requirements of an exploding population: schools, mental hospitals, highways, new buildings, welfare--and interest costs on bond issues floated to pay for major projects already begun. Much of the increase will go to take care of schoolchildren and longer-living indigent old people, who pay no taxes themselves.

Pangs & Population. Where will the money come from? Mostly, from higher 1959 revenues due to improving business and increasing numbers of taxpayers. Also, from increases in the old reliables: taxes on cigarettes and whisky, plus sales taxes, higher income taxes, corporation taxes. Beyond that, states are searching sharply for untaxed revenue sources.

New York's Nelson Rockefeller has proposed more horse racing (betting is already taxed) by means of an extra race a day and five additional racing days a season. Texas, its oil producers already hilt-taxed, may tax natural-gas transmission companies as well. New Mexico may triple its severance tax on uranium; Nevada will collect one-fourth the state budget from legalized gambling; Florida taxes citrus growers and Maine its timber.

Nebraska has discovered with anticipation that it is the only state of the 25 allowing parimutuel betting that has neglected to tax the bets.

Sharpest percentage rise in state spending this year is taking place in well-heeled small-population states (Iowa up 19%, Indiana up 16%, Nevada up 15%). But the sharpest pangs will be felt in such big-population states as New York, California, Michigan and Illinois.

Lettuce Sandwich. Party labels are no guideposts to the spenders. In South Dakota, Ralph Herseth, first Democratic governor in 22 years, quickly tacked another third to the budget increase suggested by outgoing Joe Foss. Contrariwise, Kansas Democrat George Docking has been the only Governor to compile a budget lower than last year's. And New York's big-budget Republican Rockefeller (see New York) is sandwiched between Democratic Liberals Robert Meyner of New Jersey and Abraham Ribicoff of Connecticut, both with modest proposals and no tax increases.

Other gold-star states that intend to balance their budgets without any new or increased taxes: North Dakota, Georgia, Nevada, Indiana, Kansas, Louisiana, Maryland, Oklahoma, Tennessee.

*Not scheduled in 1959: Mississippi, Kentucky and Virginia, where a special session convened last week to consider only court-ordered integration.

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