Dread My Lips Not Bush's, but those of the Governors asking for taxes

Taxpayers who relaxed when they read George Bush's lips now have something else to fret about: Michael Dukakis, Mario Cuomo, Jim Thompson and other Governors are mouthing a different message. Their states face deficits or pressing needs, and, unlike the Federal Government, they are barred from deliberately shelling out more than they take in. Unless they sharply slice spending, they will be unable to echo the President's "no new taxes" pledge. / To cover their budget gaps, 23 states are considering or have already adopted tax hikes.

Overall, these jurisdictions hope to raise an extra $5.1 billion next year. More than a third of that would be levied in just three Northeastern states -- Massachusetts, New York and Connecticut. The main sources of new revenue are so-called sin taxes on smoking and drinking. Confronting a deficit of as much as $300 million in Massachusetts, Dukakis has proposed tobacco- and alcohol-tax increases as well as a phased 10 cents rise in the gasoline tax, to 21 cents. New York's Cuomo last week reached agreement with legislators on $1 billion in extra revenue, raising the tax on a pack of cigarettes from 21 cents to 33 cents and on an average bottle of liquor from 81 cents to $1.05, and imposing a host of license and fee increases. Even the cost of dying will triple: a death certificate goes from $5 to $15. Connecticut's Democratic Governor William O'Neill has sliced spending $150 million, and expects to close a remaining $97 million deficit mainly with sin taxes and a 15% surcharge on corporations.

Illinois' Thompson, a Republican, is considering a boost from 20 cents to 35 cents per cigarette pack that would net $170 million. California's voters last November approved raising the tax on a pack of cigarettes from 10 cents to 35 cents, which should bring in $300 million this year. Texas legislators are pondering a possible 7 cents increase, to 33 cents, in the same tax. Louisiana may raise the gasoline tax from 16 cents to 20 cents per gal.

State budgets have been severely strained by a combination of dwindling help from the debt-ridden national Government and Washington-mandated increases in spending for catastrophic health care and nursing homes. State officials also blame some unexpected consequences of the 1986 federal tax-reform law. Late in 1986 taxpayers rushed to sell securities and property before capital-gains taxes jumped from 20% to a current maximum of 33%. Some state planners rosily assumed this high revenue would continue. Cigarette smokers will pay for the miscalculation.