Lowry Vetoes B&O; Tax Cut, Says State Faces Cash Crunch Both House, Senate Leaders Expect Override Of Veto

Gov. Mike Lowry vetoed a $130 million business tax cut on Monday, calling it a bad idea in light of expected federal spending cuts.

Leaders of both houses said they would hand him his first veto override.

Senate Majority Leader Sid Snyder, D-Long Beach, said that chamber will vote to override the veto of a business-and-occupation tax cut Wednesday or Friday, probably the former.

Republican House Speaker Clyde Ballard said his chamber, which first proposed the reduction last year, will vote to override as soon as the measure arrives from the Senate.

Snyder said Democrats, who hold a one-vote majority in the 49-member Senate, are saddened at the prospect of overriding Lowry, a fellow Democrat. But he said to do otherwise would be to “break a promise we made to the voters last spring” when the Senate refused a similar tax cut on grounds it would be fiscally imprudent.

“We said then we’d take another look at it this year, and if it looked as though the economy was strong and we had a good surplus, we’d pass it. We took a look, and things look good,” he said.

The tax, for service industries from lawyers to barbers, would be reduced by varying amounts depending on the service. Overall, though, the measure would cut by half a B&O tax increase passed by the 1993 Legislature when it was controlled by Democrats.

At a noon speech to state community college trustees, Lowry said an override would be “extremely irresponsible” given looming federal budget cuts and uncertain revenue projections.

At an earlier news conference, Lowry alluded to the fact this is an election year and, as he has in the past, suggested one of the Senate’s motives is to curry taxpayers’ favor.