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<DIV><FONT face=Arial size=2>Visionaries:</FONT></DIV>
<DIV> </DIV>
<DIV>Legislative News</DIV>
<DIV>
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"urn:schemas-microsoft-com:office:office" /><o:p> </o:p></P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt"><B
style="mso-bidi-font-weight: normal">Governor Otter recommends a change in the
grocery tax credit.<SPAN style="mso-spacerun: yes"> </SPAN></B>This is a
timely recommendation, since the sales tax was increased to 6% as a result of
legislative action taken during the special session last August.<SPAN
style="mso-spacerun: yes"> </SPAN>Currently, the grocery tax credit is $20
per person for most people and $35 per person for those at least 65 years
old.<SPAN style="mso-spacerun: yes"> </SPAN>The Governor’s proposal would
target the credit to people with lower incomes.<SPAN
style="mso-spacerun: yes"> </SPAN>Depending upon circumstances, the credit
may reach $90 per person.<SPAN style="mso-spacerun: yes"> </SPAN>As
incomes increase, the credit eventually is phased down to zero.<SPAN
style="mso-spacerun: yes"> </SPAN>The additional cost of this modification
to the grocery tax credit program is $22 million.</P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt"><o:p> </o:p></P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">Although the notion of completely
removing the tax on groceries frequently receives attention, it should be noted
that there would be a revenue loss of about $200 million.<SPAN
style="mso-spacerun: yes"> </SPAN>By reforming tax laws, that revenue
could be recovered.<SPAN style="mso-spacerun: yes"> </SPAN>However, there
has not been much support for comprehensive tax reform.</P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt"><o:p> </o:p></P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt"><o:p> </o:p></P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt"><B
style="mso-bidi-font-weight: normal">The public education budget has not yet
been presented to the Joint Finance and Appropriations Committee, but
information is available.</B><SPAN style="mso-spacerun: yes"> </SPAN>State
Superintendent Tom Luna requests a 3% increase in money for teacher salaries,
and a 1% increase in money for administrator salaries.<SPAN
style="mso-spacerun: yes"> </SPAN>The Governor’s request for additional
salary money is 5%.<SPAN style="mso-spacerun: yes"> </SPAN>This is
consistent with his requests across state agencies.</P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt"><o:p> </o:p></P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">During the State of the State
message, Governor Otter mentioned his support for Mr. Luna’s request for
additional money specified for textbooks and supplies, rural schools, and other
programs. The Governor’s budget reflects no appropriation in these areas.<SPAN
style="mso-spacerun: yes"> </SPAN>However, indications are that Mr. Luna
has been given discretion to take from the Governor’s proposed salary funds to
cover other things he would favor.</P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt"><o:p> </o:p></P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">Statutory requirements dictate
the great majority of funds for public schools.<SPAN
style="mso-spacerun: yes"> </SPAN>Thus the “discretionary money” in the
budget is important to local districts.<SPAN style="mso-spacerun: yes">
</SPAN>For the next school year, the Governor recommends no increase in $ per
support unit, while Mr. Luna recommends only a 1% increase.</P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt"><o:p> </o:p></P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">Please let me know if you have
specific questions.<B style="mso-bidi-font-weight: normal"><o:p></o:p></B></P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt"><B
style="mso-bidi-font-weight: normal"><o:p> </o:p></B></P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">Shirley Ringo</P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt"><o:p> </o:p></P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt"><o:p> </o:p></P>
<P class=MsoNormal
style="MARGIN: 0in 0in 0pt"><o:p> </o:p></P></DIV></BODY></HTML>