You Want to Tax What? Government Gets Desperate

March 23, 2009— -- In Chicago, surveillance cameras may someday help the city to fine more uninsured drivers. In Ohio, a city court is limiting its new cases because it can't afford more printer paper. In California, there's a loud call to tax marijuana sales. And in Georgia, one lawmaker says he's not giving up on his proposal for a state strip club surcharge.

Across the country, these and other unusual money-saving and money-making efforts have been volleyed by government officials desperate for funding.

"A new wave of creativity is sweeping across budget offices these days," said Pat Hagan, national audit partner for state and local governments at Deloitte and Touche LLP.

Because the recession has cut so sharply into property tax, sales tax and income tax revenues, Hagan said, state and local officials are looking for nontraditional sources of cash.

"There are funny stories, although they're quite serious topics," he said.

Among the efforts drawing the most attention are so-called "sin taxes" -- taxes on products or services that many associate with vices like alcohol, smoking, pornography, strip club visits and in Nevada's case, prostitution.

Some sin taxes, though, Hagan said, aren't as effective as proponents may hope because they target only a limited number of people -- those who smoke or visit strip clubs.

Certain efforts to cut government spending, likewise, may result in only limited savings.

But, Hagan added, "Sometimes people want to do this in their communities because it sends the right signal that these are tough times, and you don't want your government to be spending frivolously."

Following is a look at unusual efforts -- both large and small -- to help governments boost their bottom lines.

It's been dubbed the "pole tax," but Georgia State Sen. Jack Murphy insisted his money-making proposal is really a surcharge, not a tax.

The Republican lawmaker is asking the state government to charge a $5 fee per visit to patrons of strip clubs. The revenue from the surcharge, he said, would go to fund new rehabilitation centers for teenage prostitutes.

"This bill is strictly to try to get some of these 13-, 14-year-olds off the street to give them a place to go, give them some therapy," he said.

If Georgia was flush with cash, Murphy said, he wouldn't include a proposed funding source -- the surcharge -- in his campaign for new rehab centers.

But right now, according to the Georgia governor's office, the state is $2.6 billion in the red.

"I couldn't see sending forth a bill without having some sort of funding source in it because we need money," Murphy said.

It's unclear how far Murphy's proposal will get. The bill didn't make headway in the state legislature, so now, the state senator said, he'll try to attach it as an amendment to more successful bills.