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State officials have long been campaigning for an agreed division of tax sources among Federal, state and local governments. Part of the question of division depends on which taxes yield the most net revenue for which governments. Obviously the Federal Government can much more cheaply collect a gasoline tax (by imposing it at 100 refineries) than state governments can collect a similar tax (by watching every filling station and patrol ling borders for gas bootleggers). And the Federal Government can better collect income taxes because wealthy men cannot move out of a district where the local rate is high. Hence there was considerable sentiment that the Federal Government should collect such taxes, and refund at least part to the states, just as some states collect income taxes and refund part to local governments. Yet state tax officials are inclined to oppose such a scheme be cause it would give the Federal Government still more power over them. Other Topics last week on the minds of Governors and Governors-elect included:
¶ Enactment of laws to enable banks, mortgage companies, etc., to buy insured mortgages under the terms of the Federal Housing Act. President Roosevelt last week sent letters to 44 Governors pointing out that Administrator Moffett had found that their state laws hampered, if they did not totally forbid, financial institutions from joining in the Federal Government's housing drive.
¶ Revamping of many a state's liquor laws, hastily passed after Repeal. A round dozen Governors were planning new state liquor laws.
¶ Old age pensions and unemployment insurance, brought to the fore by New Deal proposals.
Among the 34 Governors taking office in January, three are going in for their third term, 12 for their second, 19 for their first. Of these: New York's Herbert H, Lehman comes first in point of time, because he takes office on New Year's Day; in point of importance, because he heads not only the most populous state in the Union but the government which is financially the third biggest in the land;* in point of fame, because as Governor he is Franklin Roosevelt's successor, personal friend and model supporter. When "Herbert" first took office on Jan. 1, 1933, his friend "Franklin" was there to wish him well at his inauguration. Friend Franklin was invited to be present again for Herbert's second inauguration but had to decline because the opening of Congress kept him in Washington.
With his $25,000 a year salary (biggest of any Governor), with a $390,000,000 State debt (biggest of any state), but with the State credit boastfully asserted to be better than that of the U. S. Government, Governor Lehman may well be the envy of his 47 colleagues. But he is not short on State worries. The number of people on relief in New York is around 2,000,000, more people than there are in Connecticut or Kansas, or Florida or Nebraska. In 1935 Governor Lehman will need about $100,000,000 of new taxes to balance his budget, enough money to run half a dozen good sized states.