Posted on 05/29/2002 3:33:12 AM PDT by GailA
Edited on 05/07/2004 9:20:02 PM PDT by Jim Robinson. [history]
A vote on a new tax on services could be up in the state House this morning, and proponents of an income tax could take another stab at passing it today as lawmakers continue their quest to balance the state budget by raising taxes.
(Excerpt) Read more at tennessean.com ...
State considers closing Brushy Mountain prison facility
By Jim Balloch, News-Sentinel staff writer May 29, 2002
State officials said Monday they are considering closing the Brushy Mountain prison facility, but the possibility is not directly tied to the budget controversy or income tax proposal.
Last week, Alex Fischer, chief of staff to Gov. Don Sundquist, advised Morgan County Executive Tommy Kilby that the prison was in danger of being closed "because of deficiency reasons," Sundquist spokesman Sean Williams confirmed Tuesday. But Williams said a suggestion by Democratic U.S. Senate-hopeful Bob Clement that the move was an effort by Sundquist "to bring pressure on state legislators who represent Morgan County to support his state income tax proposal" is not true.
"Absolutely not," Williams said. He described Fischer's contact with Kilby as a courtesy call made because "it was appropriate to give him a heads up." "According to Kilby, he asked the governor's representative if the announcement was tied to the state income tax," Clement's campaign states. "Kilby said he was told that without the tax the state would not have the money to operate the prison." Kilby could not be reached for comment Tuesday.
"We think it is unfortunate that Congressman Clement issued a news release without understanding the context of the entire situation," said Sundquist's press secretary, Alexia Levison. "We've been working on a prison plan for a long time now and we've been exploring all of our options. Its tough to say (when a decision will be made) when you don't know what the budget is going to look like."
Department of Corrections spokesman Steve Hayes said the state has been considering a number of options "for several years" in developing a comprehensive prisons plan, including building new facilities, closing or expanding old ones, contracting with local governments, and combinations thereof.
One possibility being looked at is closing Brushy Mountain and expanding the Morgan County Regional Correction Facility, Hayes said.
But no decision to close any facility has been made, he said. "Whatever decisions are made will be on a cost effective basis," he said.
The deficiency to which Williams referred, Hayes said, was the high cost of maintaining and operating a facility as old as Brushy Mountain, which opened in 1896.
Jim Balloch may be reached at 865-342-6315 or balloch@knews.com.
DON'T BE SHY MAKE THOSE CALLS bring your signs and horns. PROTECT YOUR PAY CHECK!
The General Assembly's server is being OVERLOADED. So I strongly suggest PHONE CALLS!
Folks to target:
Ralph Cole (R) Ron Davis (R) Stancil Ford (R) Steve McDaniels (R-chair of House GOP) Raymond Walker (R) Zane Whitson (R) co-sponsor of benedict naifeh's IT Keith Westmoreland(R) Chris Newton (R) co sponsor of expand sales tax to services Frank Buck (D) George Farley (D) John Tidwell(D) John Mark Windle(D) Stratton Bone (D) General Assembly
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 (1 + last 4 digits of their Nashville legislative office) or call the switchboard at (615) 741-3011.
PLEASE NOTE THE MEDIA AND BOSS HOGG HAVE FAILED TO INFORM THE PUBLIC THAT SENIOR CITIZENS WHOSE SOCIAL SECURITY CHECKS AND PENSION CHECKS ARE CURRENTLY SUBJECTED TO THE FEDERAL INCOME TAX WILL HAVE THEIR CHECKS SUBJECTED TO THE STATE INCOME TAX. AS WILL UNEMPLOYMENT CHECKS.
Tennessee House unlikely to vote on income tax this week
By TIM WHALEY
Leading House Democrats say an income tax vote appears to be on hold Wednesday, with attention shifting to raiding upwards of $480 million from state reserves to balance the budget ending June 30.
Democratic Caucus Chair Randy Rinks, D-Savannah, said Tuesday that there "appears to have been little movement one way or another" over the long holiday weekend.
Lawmakers have only one session day left with pay, and the state's budget year ends next month.
"I think what we're trying to do is to get something to raid the reserves and balance the budget for the year we're in now," Rinks said. "And then after that, I guess we're just going to start on a continuation budget in case no revenue is passed, which it doesn't look like there is much of a possibility right now."
A continuation budget essentially amounts to $800 million in cuts, since that much new revenue is needed just to continue today's service level in fiscal 2003.
Rinks did say a sales tax expansion plan that places a 6 percent tax on personal and professional services appears like it will have a vote Wednesday.
"They can put it on the floor, and they will have an opportunity to like it all they want to," Rinks said.
Rep. Ken Givens, D-Rogersville, questions if the measure will get the 40 votes sponsors said the measure had last week.
"I have said all along that it is far easier to say you will vote for something than to actually ... press a green light when the official tally is taken," Givens said.
Rinks, Givens and Rep. Bob Patton, R-Johnson City, were among the 45 votes last week for the 4.5 percent flat income tax plan that eliminates sales taxes on most grocery items, clothing and non-prescription drugs, while also deleting the 6 percent Hall income tax on investment income.
Rinks said his tax vote drew mixed reviews back home, adding that "most of the ones against it are the people who would pay nothing or less than they do under the law today."
Patton said he received far more positive comments at home.
"I was pleasantly surprised. ... There were some negatives, but nothing like I thought," Patton said. "I had a lot of positive calls and congratulations for doing what they felt like was the right thing.
"I had far more negatives from outside my district, and I hear them, but they don't vote for me, and they didn't put me here."
Unlike Rinks and Givens, Patton said he will vote for the services tax if the bill sponsors run the legislation for a House floor vote Wednesday.
"At the point we have arrived at now, we are really in trouble with the state budget as far as I'm concerned," Patton said. "Some people say cut, but if we cut like some are talking about, there will be some really unhappy people when they find out what that really means."
Meanwhile, Givens argues that "Main Street businesses" will be punished under a service tax as badly as those state employees and TennCare enrollees who lose their jobs and health insurance if lawmakers cut the budget by $800 million.
That's because everyone from florists to exterminators, day-care providers to accountants, would collect a 6 percent sales tax on the value of their services "whether they make a dime in profit or not."
"It's time for those who say they are redoubling their efforts to step up with a plan," Givens said. "But if they are redoubling their efforts and have contributed nothing so far, then that redoubling doesn't give me much hope."
Givens was referencing a comment by state Rep. Jason Mumpower, R-Bristol, who promised to "redouble" his efforts to find a solution to the state's budget woes.
Mumpower has only said that in "concept," he could support a service tax.
http://www.gomemphis.com/mca/politics/article/0,1426,MCA_1496_1174339,00.html
By Paula Wade wade@gomemphis.com
May 29, 2002
NASHVILLE - Tennessee lawmakers might raid $700 million in funds earmarked for local governments to help balance next year's budget, a measure that legislators admit would force massive local property tax increases statewide.
Although representatives may try again today to pass an income tax or other tax measure, House leaders appeared to be bracing for the likelihood that little or no significant revenue measures will be approved this year.
That sets the stage for balancing the budget with cuts, raiding funds now earmarked for state and local governments, and raising relatively small amounts through so-called sin taxes.
It would take about $1.2 billion in new revenue to fund Gov. Don Sundquist's recommended budget, and about $850 million just to continue current state services next year.
One taxing measure that could come up for a vote in the House today is a $965 million extension of the state sales tax to most services except medical care. Representatives could also vote again on House Speaker Jimmy Naifeh's income tax plan if Naifeh (D-Covington) feels he has the votes this time. That measure went down in defeat last week, five votes short of House passage.
On Tuesday, Naifeh repeated that he would bring up his bill again only if he's sure he has the votes. Meanwhile, House Finance Committee Chairman Rep. Matt Kisber (D-Jackson) set the stage for "putting everything on the table" for possible budget raids, cuts or adjustments.
House committees, acting in quick succession, passed several major budget-related bills Tuesday, including the one allowing raids on previously earmarked funds.
"I would imagine that after (today) we'll have a feel for what we'll have to work with in order to put the budget together," Kisber said.
Tennessee now earmarks a share of its road funds, sales tax, Hall investment income tax, and other taxes to city and county governments, sending $700 million into local government coffers statewide. Memphis got $78.9 million in state-shared taxes last year, according to the Tennessee Municipal League, and Shelby County got $19.5 million. Germantown got $5.7 million and Collierville $3.5million.
But that predictable flow of state funds would cease under a bill scheduled for a House vote today, part of a larger bill allowing lawmakers to take other earmarked reserve funds to balance the state's current-year budget shortfall of $480 million.
Under the bill, cities and counties would only get whatever was allocated to them each year by the General Assembly, turning a large stream of revenue into one that would be both unstable and unpredictable.
Joseph Lee, the director of finance and administration for the city of Memphis, said about 13 percent of the city's revenues come from the state.
If that amount varies from year to year depending on the whims of state legislators, Lee said, planning a municipal budget would be a daunting challenge.
"It's going to make budgeting horrific,'' Lee said. "It'll be a real cat-and-mouse game."
Lee said the city's lobbyists are trying to persuade legislators not to take action that would impact the flow of revenues from the state.
Ross Loder, deputy director for Tennessee Municipal League, said, "We've known for quite some time that if the General Assembly ran out of other options, the two things remaining would be to go to state-shared taxes or to the road funds. Local governments will have to raise property tax to replace those funds. If this goes through, in some places we'll see property taxes more than double."
Besides the revenue shared with cities, the bill also makes the legal changes necessary so that lawmakers can raid the reserves of more than two dozen earmarked funds to balance this year's budget, including any carryovers in the Department of Transportation.
"Once we start taking highway funds for the general fund, it will undermine the whole of state government," said Rep. Shelby Rhinehart (D-Spencer). "The highway fund has always been sacred."
But others said that all state funds had to be part of framing a solution to the budget impasse. "We're all in this together and we're all going to sink or swim together," said Rep. Larry Miller (D-Memphis).
However, the transportation budget got better treatment than the cities and counties - the proposed bill allows a raid on DOT funds for this year only and does not do away with their earmarked status altogether.
Also on Tuesday, Memphis Rep. Ulysses Jones requested that he become the sponsor of the so-called DOGS budget (an acronym for Downsizing Ongoing Government Services). Jones said he made the request so that he could "let people know what's going to happen to their schools and in their communities if this passes. I plan to vote against it. But some people say they want cuts, and they're going to know what that means."
The DOGS budget prepared by Kisber cuts $400 million from K-12 education, $78 million from higher education, closes all parks that are not self-sustaining, eliminates the departments of Tourism and Economic Development, and cuts or eliminates hundreds of other programs to balance the state budget with existing revenues. However, DOGS does not take state-shared taxes or raid the state's transportation fund.
Despite pleas for lawmakers to come up with alternative revenue measures, the House budget subcommittee refused Tuesday to move on Rep. Bill Dunn's "sin tax" proposal, which increases taxes on alcohol and tobacco products and raises $217 million.
Subcommittee members didn't move Dunn's measure to a vote, telling him that they preferred tax measures that attacked the full scale of the revenue problem. Rep. Joe Armstrong (D-Knoxville) teasingly asked Dunn if he'd amend the measure to allow liquor-by-the-drink throughout Tennessee in order to raise more money.
"If you're going to kill the bill, have the guts to kill the bill, but don't try and put liquor-by-the-drink on it, that's outside the purview of this committee," said co-sponsor Rep. Frank Buck (D-Dowelltown).
Afterward, subcommittee member Rep. Joe Kent (R-Memphis) said he didn't support Dunn's bill this time because the committee wanted to give the major tax bills a chance to pass. "The reality is, we're going to see this one again when we have to try and piece something together."
Contact Nashville Bureau reporter Paula Wade at (615) 242-2018.
Susan Adler Thorp: Tax reform lost to legislators' self-interest
http://www.gomemphis.com/mca/opinion_columnists/article/0,1426,MCA_539_1173666,00.html
May 29, 2002
When Tennessee House Speaker Jimmy Naifeh's tax reform bill went down to stunning defeat last week, the vote was clear: House members, mostly Republicans, opposed tax reform that included a broad-based, flat-rate state income tax.
Their reasons were as numerous as the lawmakers who voted against the measure. Yet the anti-tax reformers have this in common: Most are more interested in hanging onto their legislative seats than trying to prevent the disaster that awaits the state's economy.
No one can accuse these lawmakers of being in the vanguard of economic progress. The bottom line is: The future is bleak for any constituency whose elected representatives care more about the next election than they do the next generation.
And that's what we have in Tennessee. Based on last week's House vote, 54 House members - most of them Republicans - voted against the tax reform measure, or took an ostrich's way out and abstained.
Of the House members who voted against the measure, six are Republicans in the Shelby County delegation. They are Reps. Joe Kent of Memphis, Tre Hargett of Bartlett, Paul Stanley of Germantown, Bubba Pleasant of Arlington, Larry Scroggs of Germantown and Curry Todd of Collierville.
Their votes beg the question: What would they vote for?
Not one of our representatives has come up with an alternative to Naifeh's proposal that at least could serve as the foundation of a compromise.
Do they support the talk radio hosts and their horn-honking sympathizers who have huffed and puffed their way around the state Capitol threatening any lawmaker who might favor real tax reform?
How would they solve the state's financial crisis? Do any of them have a better idea?
I called all six of Shelby County's no-voters. Four returned my calls. Here's what they had to say:
Todd said he supports eliminating hundreds of sales tax exemptions for services, but not taxing doctor visits or any other area of the health care industry.
"If we expand the sales tax base, I'd be in favor of lowering the sales tax rate. Folks would be better off paying this than an income tax. The middle class will carry the water on an income tax plan. If you expand the sales tax base, only the people using those services would pay.
"I'm not saying I have a better idea. I don't think anybody has a better idea right now.''
Scroggs, who lost his bid for county mayor in the May 7 GOP primary, says there are alternatives to an income tax. "I believe one of those is a combination of increasing the sales tax and increasing some so-called sin taxes. However that package is made up, it probably won't produce more than $800 million in revenue. There's a large distance between that figure and the $1.4 billion revenue gap in the governor's proposed budget.
"Approximately $800 million is required just to continue state services at current levels, without any improvements such as increases in salaries for teachers or state employees or additional money for higher education.
"I proposed an idea last year that would have resulted in a compromise between proponents of an income tax and a plain sales tax increase. It called for the expansion of the sales tax base and the application of the sales tax to some services. It's not a perfect solution by any means, but it's a better proposal than an income tax because you could achieve a lower sales tax rate and expand the tax base.
"Is that better than an income tax? Everything is relative.''
Stanley said he is interested in a plan that could include an income tax component. It would allow Tennesseans to vote on such a proposal in November. But he doesn't have a better idea than those already proposed to solve the state's fiscal crisis.
"People aren't afraid of an income tax," he said. "They're afraid where that tax might be five years from now. The problem I had with Naifeh's plan is that it would add an income tax on top of our tax program. True tax reform looks at all areas of the tax structure and adjusts them accordingly.
"I think we'll wind up with a reform plan of some fashion. Will it be the one that tax proponents want? No."
Kent: "What do you do when you represent people who say they don't want an income tax?
"Governor Sundquist has done what he honestly believes is right and he has paid the price. And Naifeh believes he's doing the right thing, too. I support both of them and respect them. But when people call me at night and tell me not to vote for an income tax, well, what do I do? Do I vote against them and tell them they're wrong and I'm right?
"I don't have a better idea, but tell me who you've talked to who does have a better idea."
Sundquist and Naifeh, for starters.
Susan Adler Thorp is political columnist for The Commercial Appeal. You can reach her at 529-5843, write to her at 495 Union, Memphis, Tenn. 38103, or contact her by E-mail atthorp@gomemphis.com.
I think they SMELL a great recovery and want that INCREASED revenue to squander on PORK!
Legislators focus on cuts to governments, highways By Tom Humphrey, News-Sentinel Nashville bureau May 29, 2002
NASHVILLE - A key House committee voted Tuesday to authorize slashing state subsidies to local governments and, to a lesser extent, road-building.
The move came as legislators laid the groundwork for balancing the state budget without new taxes, even as a House floor vote was scheduled on adding the state sales tax to some services and goods that are not taxed now.
That bill is sponsored by Rep. Bob McKee, R-Athens, who said a growing number of legislators had indicated support for the measure, which would generate an estimated $965 million in new revenue per year. When fully implemented next year, it would also reduce the state sales tax rate from 6 percent to 5.5 percent.
House Speaker Jimmy Naifeh's proposal for a 4.5 percent flat-rate state income tax, meanwhile, was also maneuvered so a vote on it could come today. But that seemed unlikely as the services tax and fund raids moved to the forefront of the legislative focus.
Naifeh's bill fell five votes short of passage last week and several legislators say he has not gained appreciable support in private meetings since. Asked Tuesday if he planned to seek another vote, Naifeh said, "Not until we have the votes - for sure."
The bill on raiding funds, sponsored by House Finance Committee Chairman Matt Kisber, marks a major break from past discussions about a no-new-taxes budget. A proposal earlier in the year called for almost $400 million in cuts to education, but left so-called "state-shared taxes" and road-building funds untouched.
The bill has two major sections dealing with earmarked funds, those now dedicated to specific purposes. In general, the state budget bill, which dictates spending of tax dollars, cannot change those allocations.
The Kisber bill basically eliminates the earmarking. One section declares that money now held in 28 special reserve funds and by the Tennessee Department of Transportation (TDOT) can be used to cover the $480 million revenue deficit in this fiscal year, which ends June 30.
The other section authorizes all state-shared taxes, which totaled $640 million last year and are projected to reach $700 million next year, to be withheld from city and county governments and instead be spent by the state in its general fund. State-shared taxes are those collected by the state, then sent to city and county governments.
Latest estimates are that about $800 million in new revenue, cuts or a combination would be needed to balance the budget for the coming fiscal year. A package of budget additions including a pay raise for state employees and teachers pushes the figure to $1.1 billion.
The diversion of state-shared taxes could continue under the bill, but authority to raid TDOT and the special reserve funds would expire June 30.
Approval of the bill by the House Finance Committee on a voice vote - with seven of the panel's 31 members asking to be counted as voting no - prompted an outcry from city and county government representatives. They said a cut in state-shared taxes would force an increase in local property taxes.
Molly Pratt, director of government relations for Knox County, noted the county has already adopted a budget for the coming year and the vote, along with the general state budget picture, creates great uncertainty.
"Local governments cannot operate without state dollars," said Rep. Shelby Rhinehart, D-Spencer, in urging colleagues to defeat the proposal. "You never felt the ire of hell like you're going to with this."
Kisber, however, said the bill merely grants authority, which may not be needed if a tax increase is subsequently enacted. On the other hand, he said, all funds need to be on the table if there is no tax increase.
"I think there's a sentiment - we'll see if it's in the majority - that dollars raised from state taxes ought to be allocated by the General Assembly and not automatically allocated under general law."
The prospect of raiding the road funds, which come from state fuel taxes, also provoked an angry outburst from Rhinehart, the Legislature's most senior member.
"The highway fund has always been sacred," he said. "If you do this, you can say goodbye to good roads and goodbye to good progress for the state of Tennessee."
Besides TDOT, the 28 funds range from those maintained by the Tennessee Housing Development Agency to a "voting machines loan fund" set up to let county election commissions borrow money to buy new machines.
The House Finance Committee also approved a bill Tuesday by Rep. Larry Scroggs, R-Germantown, to implement "performance-based budgeting" in state government. Some have suggested the measure could make some legislators more comfortable with voting for a tax increase.
When the House and Senate meet today, they will be using the 89th of the 90 legislative days officially allotted by the state constitution for each session of the General Assembly. Legislators plan to use the remaining day next week. After that, legislators may continue to meet but will be denied their standard $114 per day allowance.
Tom Humphrey may be reached at 615-242-7782 or humphrey@edge.net.
Or, perhaps, they're unwilling to give up their seats because they aren't responsible for the problem to begin with. That would be those who spent wildly, beyond the means and willingness of the taxpayers to pick up the tab. Perhaps those who giddily voted for bloated spending should stand up and propose the cuts now necessary, and risk their own seats. Those who made the mess need to clean it up or go away and never return.
I'm glad I logged on tonight rather than when you flagged me yesterday. At least Tennessee has had relatively good news since yesterday afternoon. :)
But you guys only have a reprieve until June 19th (at which time the resolute protesters, I understand, have vowed to return. God bless 'em!)
Taxation is the art of plucking the goose, so as to obtain the largest amount of feathers with the smallest amount of hissing .... Jean-Baptiste Colbert, Minister of Finance under Louis XIV
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