Shaheen and some legislators believe an income, sales or other broad-based tax is needed to restructure the state's tax system, lower the state property tax and provide a stable funding source for schools. House Republican leaders back a more traditional New Hampshire approach of raising smaller taxes to produce just enough money to take care of the immediate shortfall. They would use some state property tax revenue generated by rising property values to lower the rate of the tax in 2003. The House voted down Shaheen's proposed sales tax package as well as taxes on income and gross business receipts. The House-passed tax plan faces a bleak future in the Senate, which has its own favorites.
Some senators favor legalizing video poker machines while others back an income tax.
Other tax ideas have not yet emerged. The Senate also gave preliminary approval last week to a plan to drastically change how the state determines its school aid obligation and distributes the money. A gambling supporter, Shaheen has not ruled out working with the Senate on its proposed aid changes. She also told the analysts she was heartened that the Senate was more willing than the House to work on a long-term, bipartisan solution.