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State Journal: Faint rays of hope; Political testament

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After many months of unremitting bad news, states may be getting some "faint glimmers of improvement'' on the fiscal front as the nation's economy improves.

The early rays of hope were spotted by Steven D. Gold, the director of the Albany, N.Y.-based Center for the Study of the States.

In a report based on a 49-state survey this spring, Mr. Gold found that sales-tax revenues had improved by 2.8 percent over last year, due to a rebound in consumer spending.

Still, Mr. Gold observed, "The first three months of 1992 produced a little good news for many states, but not much.''

Although total state revenues in the first quarter were up 7.8 percent, all but 1 percent of the rise was due to tax increases approved by the state legislatures last year.

Given the overall improvement in the national economy, the relatively modest uptick in state revenues might seem "somewhat surprising,'' Mr. Gold noted. One factor working against the states, he explained, is the unusually large income-tax refunds going to taxpayers who were unemployed in 1991.

Looking ahead, Mr. Gold sees slim prospects for state tax hikes in 1992, with "the normal reticence about raising taxes in election years'' reinforced by "anti-incumbent sentiment among voters this year.''

In a speech that he described as his "ultimate statement and final political testament,'' Gov. James G. Martin has urged North Carolinians not to adopt private-school choice.

Mr. Martin, who is leaving office this year after two terms as Governor, was addressing the convention of the state Republican Party late last month.

"Reform means we decontrol, shift responsibility to the most local level, and give schools incentives to perform better, as measured by student outcomes,'' he said. "And we're not going to improve our public schools by taxing and spending millions more on private schools.''

"What do you think you'll get by spending federal and state dollars on church-related schools?'' the Governor asked. "I'll tell you what you get. With this Congress, you get federal control of the parochial schools--control over who can teach, what to teach, textbook approval--you name it.''

The state G.O.P. is divided over the issue, however. The convention approved a resolution backing President Bush's "schools of choice'' proposal.

Teena Little, an ally of the Governor, last week barely edged Vernon Robinson, a vocal advocate of private-school choice, in a runoff election for the Republican nomination for state education chief.--H.D.

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