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States prepare to spend again

7:24 AM, Feb 4, 2013   |    comments
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A healthy jump in tax collections is letting states spend money on things they haven't been able to afford since the recession struck five years ago.

Big spending turnarounds are underway this year in education, tourism promotion and worker pay.

Many of the nation's 30 Republican governors are among those advocating for spending more freely now that tax collections have risen steadily for three years.

Florida Gov. Rick Scott, a Republican who announced his candidacy at a Tea Party rally, wants to give every teacher a $2,500 pay raise and boost state funding for schools by 6.5% to $6,800 per student. The cost: $1.2 billion.

"This is the right proposal at the right time," says Florida Education Commissioner Tony Bennett. "We now have a healthier economy that supports investing in education."

Since hitting bottom in 2009, income and sales tax collections have risen about 15% nationwide, the Bureau of Economic Analysis reports. During that time, states, cities and school districts have been frugal. Total spending rose 1% last year and 6% since 2009, the BEA reports. The result: Most states have budget surpluses.

Spending hikes on the horizon:

Ohio. Republican Gov. John Kasich rolled out his education spending plans Thursday to a wary group of 500 school administrators. His surprise proposal: a 6.5% spending increase next year. "The mood changed as the governor went, and you started to see nods of agreement," says Kirk Hamilton, executive director of the Buckeye Association of School Administrators.

Pennsylvania. Republican Gov. Tom Corbett cut education spending his first two years in office. Tuesday, he will release a budget proposing an increase.

Tennessee. GOP Gov. Bill Haslam wants more education spending and pay raises for state workers.

"If you're a Republican in Washington, you see out-of-control spending and you can't flip enough levers to make it stop," Haslam says. "When you're a governor, you think, 'I can make this work.'"

Indiana state Rep. Greg Porter, a Democrat, says the education increases are a mirage. "You need to restore the money that was cut before you call something a spending increase," he says.

Dennis Cauchon, USA TODAY

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