Governor Bob Holden has given the legislature a package of tax increases and spending cuts that he says will deal with an anticipated one-billion dollar budget shortfall in the next fiscal year. Holden proposes $260-million in further budget cuts. But he also is asking the legislature to pass a 55-cent-per package cigarette tax increase that will raise 280–milion dollars; to approve closing some business tax loopholes that he thinks will raise another $186 million dollars; and to place a five percent income tax surcharge on families earning more than $200,000 a year. Holden also wants to change gambling taxes and fees to raise another $200-million. He proposes removing the $500 loss limit at casinos, increasing the gross receipts tax on casinos from 20 percent to 22 percent, and increasing the boarding fee by two dollars. Holden, a democrat, must convince the legislature–controlled by republicans–to buy into his plans. Several of his proposals drew applause only from democrats. Republicans showed little or no support for Holden’s plan to close loopholes, change casino fees and loss limits, increase cigarette taxes, and put a surcharge on high incomes. Holden concluded his remarks with specific messages to republican lawmakers. He told them he would not sign a budget that deals with the one billion dollar shortfall just by cutting programs. He also said he would not support a republican proposal to take gambling money away from the general education distribution plan and distribute it to certain schools, which he says already are the richest in the state. Lawmakers on the republican side of the aisle did not applaude those parts of his speech either. Holden is the first governor in ten years to face a legislature controlled in both houses by the opposition party.