WASHINGTON -- As Barack Obama lobbies for his aid-to-the-states economic stimulus plan, governors are preparing to sharply raise taxes and fees that will hurt the low-to-middle-income families he wants to help.
A review of budget proposals being cooked up by governors across the country shows they intend to raise next year's taxes on clothes, shoes, soda, hospitals, health insurers, gasoline, auto licenses and many other expenses that most Americans consider necessities.
State officials say they are required by law to balance their budgets and that some tax hikes are necessary to do that, but fiscal analysts say that raising taxes in the middle of an economic downturn will only worsen local economies and prolong the recession.
"Middle-income families do not get wage increases during a recession, but neither should the states. Families have to cut back and so should state governments. They should cut spending," said fiscal analyst Chris Edwards who tracks state budgets at the Cato Institute.
"These states should have been retrenching after budget increases of 7 percent over the last two years, but they repeated the same mistakes they made in the late '90s, assuming the good times were going to last forever," Edwards told me.
In its annual report on the states, the National Governors Association reported last month that, "Most states experienced poor fiscal conditions in 2008, with conditions for fiscal 2009 expected to continue to severely decline as the national recession deepens."
But spending critics said that not enough attention was being paid by the national news media to the plight of taxpayers whose incomes were being depleted by rising sales taxes, fees and higher property taxes.
"Most reporters are covering the state budgets and thinking 'Oh, the poor states' and no one is looking at this from the perspective of the taxpayers who are the ones whose wallets are going to be on the line," said political strategist Trent Duffy.
While states are generally holding the line on income taxes, analysts said many are pushing tax and fee increases on the necessities of life:
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