Texas State Senator John Carona is the very image of a Republican lawmaker, right down to the salt-and-pepper hair, the monogrammed tie and the day job in real estate. He represents north Dallas and the adjacent suburbs, a bastion of country club Republicanism, whose residents are not typically enthusiastic about either taxing or spending. So it was more than a little surprising to hear him say that it was high time the State of Texas raised taxes. “No one likes to pay higher taxes,” he told me when I interviewed him in Austin earlier this spring. “But the people who elect us send us to the capital to do what is best for the state. The vast majority didn’t send us so that we would never raise new revenue. Somehow along the way, the conservative movement–and I am a political conservative–has taken the definition of conservatism to mean the unwillingness to ever raise taxes for any purpose no matter what the need. And that is just foolish and wrongheaded.”
Carona’s not alone. Over the past few years, momentum has begun to build, bit by bit, against the antitax movement, and it has largely flown under the radar of the national media. A number of governors, from Democrats Jon Corzine of New Jersey and Mark Warner of Virginia to Republicans like Mitch Daniels of Indiana, have pushed through significant tax increases and been rewarded with high approval ratings. Daniels’s apostasy was particularly meaningful, since he was once Bush’s budget director and had been a lifelong fellow traveler of antitax warrior Grover Norquist. This year, other states are emulating Indiana. A recent article in the online publication Stateline noted that many states facing budgetary shortfalls are proposing significant tax hikes, in stark contrast to just a few years ago, when “legislatures…bent over backwards to avoid major tax hikes, instead raiding rainy day funds, borrowing money or expanding gambling to raise more revenue.”
This is big news, because for much of the past two decades states have been the sites of Norquist’s greatest victories. Conservative activists pushed through the disastrous Taxpayer Bill of Rights in Colorado, which made raising taxes nearly impossible, and have cowed thousands of state legislators and governors into signing a pledge to “oppose and vote against any and all efforts to increase taxes.” The antitax fever spread to Democrats as well. Even Rod Blagojevich, running for governor in the friendly blue confines of Illinois in 2002, pledged to somehow address the state’s fiscal woes and expand state services without raising sales or income taxes.
Unlike the federal government, which has the luxury of cutting taxes, increasing spending and selling its debt to finance the gap, many states are legally required to balance their budgets, so they’ve resorted to a grab bag of tricks and gimmicks to keep the government funded. Gambling has exploded, pension funds have been raided and many states are now reduced to selling off public assets. But eventually the bill comes due. Having spent the past four years running through every conceivable gimmick and trick, Blagojevich is now proposing $7 billion in new taxes, the largest increase in the state’s history. What’s more, the lion’s share of the money would go not to closing a budget shortfall but to greatly expanding the state’s medical coverage of the uninsured. He seems to think the politics are on his side. “It will be Armageddon,” he said at a recent rally. “But we are on the side of the Lord, and we will prevail.”