With a number of state legislatures heading toward the end of their legislative session for 2004 and general fear of most lawmakers of anything that would be considered a tax hike, many credit unions are breathing a sigh of relief that their states won't be tackling CU taxation legislation this year.
But it's too soon to assume the tax exemption is safe, said CUNA's Colleen Kelly during a GAC session on state bank attacks. "We are keeping our eyes open because we could still see [CU taxation bills] come in as amendments to other bills, especially any bill that credit unions might be seeking to strengthen their position," she said. "This may be an election year, but lawmakers still have to deal with the budget."
Fellow CUNA panelist John McKechnie agreed, noting that some 44 states are experiencing a shortfall in revenue. And even though that shortfall is generally much smaller this year than last year, Kelly added, it's still an issue.
"Remember, the fact that they had to deal with this last year means they have already used up all the easy ways of dealing with this," she counseled. "Now, they have to start looking at other ways of dealing with the budget, ways that aren't so simple."
Moreover, it won't be an election year forever, Kelly noted, adding, "Taxation could end up right back on the table after November, especially from those lawmakers campaigning on balancing the budget."
