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Governor Stands By Tax Hike

Despite an improving economy that enabled lawmakers to increase education spending, the governor's spokeswoman says Bob Holden still supports higher taxes on big business and cigarettes. KSMU's Missy Shelton reports.

The head of the Economic Development Department Kelvin Simmons says trends indicate the state's economy picture is good.

The news comes one day after lawmakers sent Democratic Governor Bob Holden an education budget larger than the governor's recommendation.

Republican legislative leaders have said all session they believed the improving economy would allow them to increase education funding without higher taxes recommended by the governor.

With one of the state's chief economists sitting by her side, the director of the Revenue Department Carol Fischer says it's surprising that the state's economic recovery has continued.

News of an economic turn around comes as no surprise to some Republican lawmakers.

The chairman of the House Budget Committee, Carl Bearden blames the administration for predictions that have been off the mark.

The head of the Economic Development Department Kelvin Simmons says the economic turn-around began last July and became evident last fall...The governor asked lawmakers in January to raise taxes by more than half a billion dollars.

The governor's spokeswoman Mary Still says the governor was being cautious in looking at the state's economic future.

Still says even though lawmakers' education budget exceeds the governor's recommendation, it's still not enough.

She says lawmakers should still consider the governor's proposals to raise taxes on cigarettes and big business.

Lawmakers still have work to do on the budget...They haven't approved the bills that allocate money for the departments of social services, agriculture and public safety.