Van Hilleary website
Posted on 05/16/2002 5:58:46 AM PDT by GailA
Sales tax expansion legislation stalls in Tennessee House
By TIM WHALEY
KINGSPORT - Tax-protesting motorists, a threatened walkout by a crucial block of votes and, ultimately, no House tax votes Wednesday. Must be spring in Tennessee.
As the annual budget crisis arises again - although with even more serious implications than in past years due to a lack of reserve funds - horn-blowing motorists serenaded lawmakers in Nashville Wednesday morning.
Meanwhile, at least 12 key pro-income-tax votes in the Black Caucus threatened to walk out Wednesday unless the delegation saw the establishment of a minority member of the Tennessee Regulatory Authority.
And finally, by the time lawmakers got to the House floor session in the afternoon, an expanded sales tax plan faltered and was sent back to the Calendar Committee.
The expanded sales tax plan offered by Reps. Bob McKee, R-Athens, and Chris Newton, R-Cleveland, ran into trouble early Wednesday when the state comptroller determined the plan raised $180 million less than it first appeared.
That forced McKee and Newton to raise their proposed sales tax rate from 5.5 percent back to 6 percent.
"Instead of reducing the rate, they have gone back to leaving it at 6 percent," Rep. Steve Godsey, R-Blountville, said. "Plus, they have an amendment in there that would put a 30-cent-per-pack tax on cigarettes, which would be awfully hard on our farmers."
As a result, Godsey said he could no longer vote for the plan.
"I told the sponsor I could not go along with it," Godsey said. "If we were lowering the rate, I could go along with that."
The revised McKee-Newton plan would raise $966.7 million in fiscal 2003 at a 6 percent sales tax rate.
But the rate would be dropped to 5.5 percent in fiscal 2004, although that move would cut the revenue collected to $758 million.
Services that would be taxed include administrative and support, construction services of all types including labor, real estate agents and brokers, information/data services, personal services, and professional services such as legal, accounting and engineering/architectural.
Exempted items that would be taxed under McKee-Newton include aviation fuel, vending machines, utility poles, pay phones, manufactured homes, newspaper subscriptions, the first $150 of club memberships, physical fitness dues, and property rentals with crews.
The measure would cost $13 million each year to administer, as well as $7.7 million in one-time startup costs.
Due to a number of changes in the bill, the sponsors pulled it from the floor Wednesday rather than put it to a vote.
The measure is said to have the support of at least 27 Republicans, as well as an unknown number of Democrats who similarly oppose an income tax.
Rep. Jason Mumpower, R-Bristol, another supporter of the expanded sales concept, instead focused on the need to vote an income tax up or down.
Mumpower also said lawmakers must raise $800 million or so to cover mandatory increases and continue services, but no more.
"I continue to hold my position that for four years we have debated the issue of an income tax, and it is past time to have a vote on it," Mumpower said. "So maybe we can take that vote before (McKee-Newton) comes back for a vote.
"I think we will see (McKee-Newton) again, and the sponsor of the bill told me he thinks we'll see it again."
Rep. Keith Westmoreland, R-Kingsport, wasn't so sure. Westmoreland, who planned to vote for McKee-Newton, said the measure may never make it back out of the Calendar and Rules Committee.
"It's looking worse and worse as they have seriously decreased the numbers it would raise," Westmoreland said. "And now it is not reducing the rate - just broadening the base - and it came up short of what was projected yesterday."
Westmoreland has also said he can vote for a 4.5 percent flat income tax proposed by Speaker Jimmy Naifeh, D-Covington.
Rep. Bob Patton, R-Johnson City, is yet another vote for a sales tax expansion.
But Patton also said he is "leaning toward" voting for the Naifeh plan if that's what it take to avert a "disaster" in state government.
"If we don't do anything, we're into the (Downsizing Ongoing Government Services) budget, and the DOGS budget is awful," Patton said. "I have a lot of people calling and saying don't do this and don't do that. I can tell them right now, they don't want the DOGS budget either.
"When you start wiping out departments and start really cutting schools and things, that is tough. People may think they don't want something now, but wait until they see DOGS."
One lawmaker who won't be voting for an expanded sales tax is Rep. Ken Givens, D-Rogersville.
"As a soon-to-be full-time real estate agent and real estate company, I'm looking at about 15 to 20 new taxes I'd be paying whether I have any income or not," Givens said. "You either raise taxes on income or pay them out of income. But in this case, you'd be paying taxes whether you have income or not."
Start contacting these legislators: BE AWARE THEY ARE RECEIVING A TON OF EMAIL BETTER TO CALL IF YOU WANT HEARD!
On the left side of the page are these choices: Information, Senate, House, Joint, Bills and Other Links. These options should get you to any information you need including office numbers, phone numbers, email addresses, committee assignments, legislative bills, etc.
Toll Free calling 1-800-449-8366 + extension or call the switchboard at (615) 741-3011.
Regarding the tax swap proposals, there are so many holes in it I don't know where to start.
One piece of advice. THEY WILL BE BACK.... They will not give up on this, so continue to fight it.
READ OUR VOTES
NO NEW TAXES
You people in Tennessee already have your election year issue. Anyone who votes for this, SEND THEM PACKING....
When this battle comes to Texas (it might soon), I hope we are ready...
Make up business card (use plain copy paper if necessar) with the legislative contact info on it. Get it into the hands of as many folks as possible. You'd be surprised how many folks don't know where or how to contact their congress critters.
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