How To Balance A Budget

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In Nebraska, during the most recent session of the legislature, lawmakers increased taxes on retail sales (to 5.5%, up from 5%), cigarettes (to 64¢, from 34¢ a pack) and income (a new average rate of 5.1%, up from 2.36%, starting in 2003). The hikes were vetoed by Republican Governor Mike Johanns, but the veto was overridden. The sales-tax increase targets some services, including software training, pest control, automobile cleaning and roadside assistance. That tax hike is expected to raise $100 million a year.

Coming Soon: More Casinos

More states are looking at starting or expanding betting--seen as an easy way to boost revenues--by adding new casinos, state lotteries and racetrack slot machines. In New York, Governor George Pataki signed contracts to permit three more Native American casinos in the western part of the state. He expects the 13-year deal to bring in $1 billion. Indiana and Illinois have raised taxes on riverboat casinos.

In the recent election, Arizona voters approved more slot machines, as well as tables for blackjack and poker. In Tennessee, one of only three states that had no legal gambling, voters overwhelmingly accepted a state lottery for next year. Critics have long argued that gambling revenues are a mixed blessing, increasing revenue but amounting to a tax on those who can least afford it.

Get Out of Jail Free

To balance their budgets, many states are going soft on crime. In Oregon, starting March 1 and continuing until at least June 30, courts will stop processing small-claims cases and certain misdemeanors including shoplifting, trespassing and prostitution. The state's appellate, circuit and tax courts will be closed on Fridays. In all, the measures are expected to save $13.6 million.

A local prosecutor in Virginia Beach, Va., announced a similar plan: no new prosecutions of misdemeanor domestic-violence cases. "I deeply regret that the victims of domestic violence will not have a prosecutor on their side, while the defendants will be able to retain their own attorneys or have attorneys appointed for them if they are considered indigent," said commonwealth attorney Harvey Bryant, a Republican. "I can't afford to do everything." A spokesman for Governor Warner called the move by Bryant, an elected official, unfortunate, adding that "to throw out the whole category of domestic-violence cases is irresponsible."

Nebraska has cut spending for the 2003 budget three times over the past year, including closing a minimum-security prison in Hastings. It reopened the next day as a federal holding facility for people detained by the Immigration and Naturalization Service. Missouri is considering cutting the sentences of inmates to save money, and Illinois has closed prisons and mental-health facilities, prompting critics to warn of more crime.

Robbing Peter to Pay Paul