The next big tax battles: state by state

Among the likely antitax efforts this year: resistance to California's Proposition 56 (on the March 2 ballot), which would eliminate the two-thirds legislative vote requirement to raise state taxes; opposition to a proposed tax hike in Pennsylvania; efforts to reduce the property-tax burden in Washington State; and proposals to reduce income, real-estate, and utilities taxes in Colorado.

Most political historians mark California's 1978 property-tax limitation measure (Prop. 13) as the genesis of the modern antitax era. "The tax revolt has ebbed and flowed over the past 25 years, but it has never really died out," says Peter Sepp for the National Taxpayers Union. More significant, he says, "Since the beginning of 2002, we've seen a major upswing in not only rejections of tax increases on the ballot, but approval [of], or at least more citizen groups circulating, measures that would reduce or limit taxes."

There now are an estimated 400 taxpayer groups across the country. In many places, the effort is led by governors and state lawmakers - most of them Republicans - who have signed a "taxpayer protection pledge" devised by Americans for Tax Reform. But it's also been the case, says Jonathan Collegio of Americans for Tax Reform, that some Republican lawmakers and governors have been "squishy on taxes while the activists and the Republican parties in the state are holding firm."

That was the case in Alabama, where the state Republican Party opposed Governor Riley's tax package. And it's true in Ohio. There, Gov. Bob Taft (R) signed a bill increasing the sales tax, while Ohio Secretary of State J. Kenneth Blackwell - also a Republican - is leading a repeal effort.

Mr. Collegio says it's significant that Republican governors with aspirations to national office - among them Jeb Bush in Florida and Rick Perry in Texas - have opposed tax increases. "Republican governors who are raising taxes - Kenny Guinn in Nevada, Bob Taft in Ohio, and Bob Riley in Alabama - have said, 'This is as far as I'm going in politics,' " he says.

A related antitax trend is the growing push for a state-level "Taxpayer Bill of Rights." This would limit increases in per capita state expenditures to the inflation rate, and any surplus revenues would have to be refunded to taxpayers. It's an idea being discussed in Idaho, Kansas, Minnesota, New Hampshire, Tennessee, and Wisconsin, says Max Pappas, a policy analyst with Citizens for a Sound Economy.

Colorado adopted such a measure in 1992, and supporters note that the state has done well financially since then.

"Having this system in place has made weathering the last recession substantially easier for Colorado because they didn't have all these programs that other states enacted during the boom years of the 1990s," says Mr. Pappas.

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