CHICAGO -- Gov. Terry Branstad of Iowa last week vetoed a proposed one-cent sales tax increase that would have been used to trim the state's $338 million budget deficit.

The governor rejected the recommended sales tax increase during a special session of the General Assembly, said Richard Vohs, the Republican governor's press secretary. The proposal, intended to generate $272 million a year in revenues, would have begun July 1, the start of fiscal 1993.

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