Wyoming community colleges are funded primarily by county property taxes. Right now, the seven counties containing community colleges levy a special property tax for this purpose, but most other Wyoming counties don't... even though these other counties benefit from the services the community colleges provide. An interim legislative committee is exploring a statewide property tax as an alternative to this inequitable state of affairs. The committee has identified an important tax fairness problem that residents of most major cities are all too aware of: when local governments provide services that benefit a broader geographical area, how can they ensure that other localities pay their fair share of the cost for these services? A statewide property tax seems like a good place to start.

A voter initiative in Missouri to increase the cigarette tax by 80 cents is back on the November ballot. At first, the ballot was declared invalid after many of the signatures were disqualified. However, the Cole County Circuit Court has overturned that decision, and the voters will now decide the issue this fall. The initiative is joined at the polls this fall by similar measures in Arizona and California. Many of the proponents of these measures argue that they reduce smoking. However, cigarette taxes are very regressive, forcing low-income smokers to pay a much higher percentage of their income in cigarette taxes than high-income smokers. A 2005 policy brief by ITEP showed that cigarette taxes are ten times more burdensome for low-income smokers than for the wealthy.

Further, both Arizona and California plan to use the revenue generated by this bill to pay for public services unrelated to smoking. As Bruce Fuller, a professor of education and public policy at the University of California at Berkeley, points out: "Most will agree this is a regressive tax[...] We all like to beat up on smokers, but if the program truly benefits all families, including upper class, then you're taxing blue-collar people to pay for everyone." Reducing smoking rates is a laudable goal, but lawmakers must find a way to do so that is fair and equitable.

There's some good news for state and national advocates fighting against harmful spending limits like the Taxpayer Bill of Rights (TABOR). Recently, a Nevada court ruled that the TABOR-like, Tax and Spending Control (TASC) initiative wouldn't be on the November ballot. The court rejected the initiative because TASC supporters failed to follow specific rules pertaining to the initiative process. Want to know more about the harmful impact of TABOR? Watch this excellent video from the Center on Budget and Policy Priorities.

Thanks to a special one-day legislative session earlier this week, Utah has two income taxes. Starting next year, wealthier Utahns will be able to choose between the current graduated-rate tax system (with a top rate of 6.98 percent) ;and a new broader-based tax levied at a lower flat rate of 5.35 percent. ITEP estimates that only 3 percent of the wealthiest Utahns will benefit from the flat-tax alternative, and that the wealthiest 1 percent of Utahns will see more than 75% of the benefit from the flat tax.

Taken on its own, the flat-tax alternative has its good points: it has virtually no exemptions, deductions or credits, which makes it a lot easier to calculate than the current tax. But the high rate on the flat tax ;makes it a losing proposition for virtually all low- and middle-income Utahns, which is why the legislation allows Utah families to choose which tax system they'd like to use. The legislative leadership's ;goal of enacting tax reform with ;"no losers" made the pick-your-own system the logical choice from a political perspective. The result? 97% of Utahns will pay taxes under the same old complicated income tax rules they've always had - and many of them will probably end up calculating their taxes under both systems to see if they'd benefit from the flat tax. Call it a tax cut - but don't call it tax reform.

Want to know more? Two ;columnists offer good retrospectives on this year's tax deform effort. For more details on Utah's income tax changes, check out the Talking Taxes weblog here.

The Kansas legislature's Joint Tax Committee is considering a proposal to create a series of gas tax " buffer zones" around the state's perimeter. Of the four states that share a border with Kansas, only Nebraska currently has a lower gas tax, allegedly prompting some motorists to cross state lines to fill up. The proposed buffer zones would allow any gas station in a "border town" to lower their gas tax to within one cent of that of the neighboring state. These areas are being promoted as a way to capture gas tax revenue that is currently lost to cross-border trade. However, it is likely that these zones will not eliminate the border problem, but instead simply move the lower gas border further inside Kansas. If these buffer zones become reality, instead of crossing the border to get cheaper gas, Kansans will be able to simply drive into a border town.

In a move that highlights election year gimmicks, Ohio legislators sitting on the Ways and Means Committee voted 17 to 1 to accelerate the phasing in of 21% across the board income tax cuts. If this plan is passed through the legislature these regressive and expensive tax cuts will be fully phased in by 2008 instead of 2009 as currently scheduled. The regressive cuts do little to help low and middle income families, and speeding up these tax cuts will leave an even larger hole in the state's budget. For more on the regressive nature of these tax cuts, read this release by Policy Matters Ohio.