To date the Governor and the Senate have each proposed a revenue package to accompany their proposed 2010 supplemental operating budgets. The House’s revenue package is expected any day.

The Governor was first out of the gate with her revenue package last week (February 17) for $605 million.  The Governor’s revenue package is a two-pronged approach: (1) Closing tax loopholes ($112.35 million) and (2) Increasing “sin” taxes ($493.1 million).

The Governor’s revenue package restores funding to a variety of public services and programs in the areas of education, health care and human services.  Specific to higher education, the Governor restores full funding to the State Need Grant.

The Senate’s revenue package is $313 million dollars larger than the Governor’s proposed package (Total revenue increase of $918 million).

The Senate, like the Governor, targets closing tax loopholes and increasing “sin” taxes. However, the Senate only raises a single “sin” tax (i.e. cigarette tax) and also incorporates revenue from a  temporaray sales tax increase and savings from the implementation of various Senate Bills.

As eluded to above, the Senate used a four-pronged approach in the development of its revenue package: (1) Closing tax loopholes ($518 million); (2) Temporary 0.3%  increase in sales tax ($313 million); (3) Increase cigarette tax by $1 per pack ($85.7 million); and Enactment of various Senate Bills ($1.3 million).The Senate restores funding to many of the same public services and programs that the Governor’s revenue package identifies. Specific to higher education, the Senate restores full funding to the State Need Grant, restores partial funding to the State Work Study program, and maintains commitments to recipients of several smaller financial aid programs that are suspended for the second year of the biennium.

Any revenue increase proposal still has a long way to go in the legislative process before it is law. The Senate and the House must first move their revenue proposals through the appropriate committees in their respective chambers as well as the committees in the opposite chamber.

Any differences between the House and Senate proposals, after the process has been conducted, will need to be settled through conference committee and both chambers will have to concur on any final legislative revenue package.