Tax returns of the nation's governors this year include questionable deductions and income from prior years they had failed to report, according to a survey by The Associated Press.
Massachusetts Gov. William F. Weld will file amended federal tax returns and pay thousands of dollars in back taxes because he mistakenly deducted home mortgage interest the last two years.The mistake was caught when The Boston Globe hired an accountant who found that Weld should not have deducted interest on a mortgage refinancing. It will cost Weld $10,000 in additional taxes for 1991 and thousands more for 1990.
"I think you check your privacy at the door," Weld said after the error was found. "At least I don't mind checking my financial privacy at the door."
Newspaper scrutiny of Arkansas Gov. Bill Clinton's returns turned up apparently improper deductions related to the Clintons' business dealings with the owner of a failed savings and loan. The deductions saved the Democratic presidential hopeful about $1,000 in taxes in 1984 and 1985.
When the deduction was first questioned, a lawyer for the couple, Susan Thomases, said the deduction "clearly is an error." But since the filing error occurred more than three years ago, the Clintons under federal tax regulations are no longer liable for the taxes.
In Iowa, Gov. Terry Branstad had to admit he owed the federal government back taxes of $1,946 because he failed to report a windfall in 1990. He had bought a van from his campaign for $7,000, $13,000 less than market value.
The disclosure was ironic for the three-term governor. He won his first term against a candidate seriously wounded by voluntary disclosures that she and her husband had owed no state income taxes one year because of deductions for their real estate holdings.
Governors in at least 18 states said they have released their income tax returns or indicated they plan to do so. At least nine others file financial disclosure reports. Hawaii Gov. John Waihee releases data, but not the forms themselves.
Failure to release returns often pops up as a campaign issue. Alabama Gov. Guy Hunt's refusal to release his returns was an issue in his 1986 and 1990 campaigns when Democratic nominees released their returns and challenged Hunt to do so.
California Gov. Pete Wilson releases his returns, but he found out when he ran for the U.S. Senate in 1982 that they often contain campaign fodder.
His return that year revealed an investment in a tax shelter that involved producing methane gas from cow dung.
Wilson's opponent for the Senate, then-Gov. Jerry Brown, had a lot of fun with Wilson's return, but Wilson had the last laugh. He won the Senate seat, and got out of the cow-dung business.