Tax Hikes: A G.O.P. Thing

By KAREN TUMULTY

With states facing their worst fiscal pinch since World War II and all but one of them required by law to balance their budgets, nearly every Governor is facing unpleasant choices this year. And in an upending of conventional politics, it's the Republicans who are leading the way to higher taxes. Within two days of being sworn in last month as Georgia's first G.O.P. Governor since Reconstruction, Sonny Perdue proposed one of the state's biggest tax hikes ever. Though he backed off when legislators balked, other Republican Governors are forging ahead. Connecticut's John Rowland, elected as a tax cutter in 1994, began his third term by proposing a 1% income-tax surcharge on millionaires. G.O.P. Governors are also pushing new taxes in Idaho, Arkansas, Ohio and Nevada. The Democrats, meanwhile, are mostly relying on spending cuts to balance the books. California's Gray Davis is one of the few to back a big tax hike, seeking to plug part of the state's $35 billion deficit. But his Democratic counterparts in Wisconsin, Illinois, Tennessee and Michigan are all pledging to hold the line on taxes and trim their budgets instead. In New Mexico, new Democratic Governor Bill Richardson has just signed into law a Reaganesque cut in both income and capital-gains taxes.

"It's a very interesting role reversal," says Stephen Moore, president of the Club for Growth, an influential antitax organization. More than that, it could mean trouble for President Bush. Some G.O.P. Governors privately grumble that Bush's tax plan is making their own untenable political situations worse--a message they will offer in person when the National Governors Association meets in Washington this week. --By Karen Tumulty