http://www.nytimes.com/2009/03/01/us/01sin.html?_r=1&hp
As the saying amongst politicians goes, never waste a perfectly good crisis.
"Hawaiian legislators were also considering capitalizing on another
potential shift in public attitudes when they proposed legalizing
same-sex unions, which supporters say could help the slumping tourism
trade."
By JESSE McKINLEY
Published: February 28, 2009
In his 11 years in the Washington Legislature, Representative Mark
Miloscia says he has supported all manner of methods to fill the
state’s coffers, including increasing fees on property owners to help
the homeless and taxes on alcohol and cigarettes, most of which, he
said, passed “without a peep.”
And so it was last month that Mr. Miloscia, a Democrat, decided he
might try to “find a new tax source” — pornography.
The response, however, was a turn-off.
“People came down on me like a ton of bricks,” said Mr. Miloscia, who
proposed an 18.5 percent sales tax on items like sex toys and adult
magazines. “I didn’t quite understand. Apparently porn is right up
there with Mom and apple pie.”
Mr. Miloscia’s proposal died at the committee level, but he is far
from the only legislator floating unorthodox ideas as more than
two-thirds of the states face budget shortfalls.
“The most common phrase you hear from the states is, ‘Everything is on
the table,’ ” said Arturo Perez, a fiscal analyst with National
Conference of State Legislatures, who predicted the worst financial
year for states since the end of World War II.
Nowhere is that more true than California, where Assemblyman Tom
Ammiano, a freshman from San Francisco, made a proposal intended to
increase revenue, and, no doubt, appetite: legalizing and taxing
marijuana, a major — if technically illegal — crop in the state.
“We’re all jonesing now for money,” Mr. Ammiano said. “And there’s
this enormous industry out there.”
In Nevada, State Senator Bob Coffin said he would introduce
legislation to tax the state’s legal brothels, a fee that would be
“based on the amount of activities.” And unlike the Washington porn
proposal, which drew the ire of the adult entertainment industry, Mr.
Coffin’s plan has the backing of the potential taxpayers, in this case
brothel owners who employ women as independent contractors.
“I think they figure if they become part of the tax stream, the less
vulnerable they will be to some shift in mores,” he said.
Hawaiian legislators were also considering capitalizing on another
potential shift in public attitudes when they proposed legalizing
same-sex unions, which supporters say could help the slumping tourism
trade.
In Massachusetts, meanwhile, state legislators have introduced a
proposal to build two resort-style casinos, including one in Boston. A
similar push died last year in the State House of Representatives. But
Representative Martin J. Walsh, a Dorchester Democrat and co-author of
the new casino bill, said a $2 billion budget deficit might have
changed some minds.
“Every state in the nation, including Massachusetts, needs to figure
out a way of raising revenues,” Mr. Walsh said. “So we need to be
creative.”
Scott Pattison, executive director of the National Association of
State Budget Officers, said many lawmakers were loath to tap more
traditional tax sources during a downturn. “What’s pushing it is this
incredible desire to raise revenue,” Mr. Pattison said. “But it’s
coupled with the desire not to raise the general and sales and income
taxes.”
Whether such proposals can pass is another issue, though each idea has
its supporters. Betty Yee, chairwoman of the California Board of
Equalization, the state’s tax collector, said that legal marijuana
could raise nearly $1 billion per year via a $50-per-ounce fee charged
to retailers. An additional $400 million could be raised through sales
tax on marijuana sold to buyers.
The law would also establish a smoking age — 21 — effectively putting
marijuana in a similar regulatory class as alcohol or tobacco.
Marijuana advocates argue that legalization could also decrease
pressure on the state’s overburdened prison system and law enforcement
officers.
All of which, Ms. Yee said, at least makes the proposal worth talking
about in a state with chronic budget problems and a law already on the
books allowing the medical use of the drug.
“We know the product is out there, and we know marijuana is available
to young people as well, but there’s no regulatory structure in
place,” Ms. Yee said. “I think it’s an opportunity to begin the
debate.”
Such a debate, of course, does not always favor tax innovators.
Several law enforcement groups have already objected to the idea of
legal marijuana, which would conflict with federal law.
John Lovell, a lobbyist for several groups of California law
enforcement officials, said the plan would create a large, illicit —
and thus untaxed — black market, in addition to magnifying substance
abuse problems. “The last thing we need is yet another legal substance
