Posted on 06/21/2002 6:04:19 AM PDT by GailA
A Snapshot of Budget Options Weekly Column: David Coffey, June 20, 2002
It was just a quick call with a simple question for an old legislative friend - a mid-state senator. But did I get an earful - 45 minutes worth!
He was at home last Saturday, sipping his morning cup of coffee. I asked how one of the budget proposals would work over the long run. I learned that and much more. Now I'm wiser but sadder.
Here's a snapshot of the options at play:
1. The Naifeh/Rochelle/Sundquist income tax (IT) provides the most money for the State and over-funds government as the years pass. Of course, two Supreme Courts have ruled a Tennessee IT unconstitutional, unanimously. Never mind, say the liberals, this Court will allow it. But so far the votes aren't there to pass it in the House and perhaps the same in the Senate.
2. The DOGS (Downsizing Ongoing Government Services) budget is a straw man - intentionally severe. It has been proposed to show how bad things can be without the IT. It is grim. It would require major cutbacks in government services and would leave a near-disaster situation in schools, higher education, health care, mental health and other areas. No legislator would vote for it, not even the sponsor.
3. The CATS (Continuing Adequate Taxes and Services) budget by Jackson/Bucks would provide minimal funding to continue until July 1, 2003.
Then hard decisions would be needed again under a new governor and hopefully out of the business slump. The sponsors say it is an option that should not come to a vote until the IT fails. IT supporters would like to shoot it down sooner.
4. The Fowler/Sharp budget would adequately fund the government by broadening sales taxes to include most services. It would also provide for a November vote by the public to choose between the IT and the broadened sales tax. At last, the people would be able to speak, though not with clarity on a constitutionally capped IT.
5. Finally, there's the do-nothing option to let the month pass without approving any budget. That would leave it to the Courts to resolve the dilemma. I call that the MESS (Most Embarrassing State Situation) budget. It would be irresponsible to allow a MESS budget, but it could happen.
Here's why. Some think that IT supporters will hold out for MESS if the IT fails to pass. If this dark, devious plan is real, they believe the Courts would adopt the DOGS plan until the Legislature could be called back into special session - probably in August - to again press for the IT.
Sorry to be the bearer of such tragic news, but there are indications that this plan is in play. You may have noticed recent news that the Supreme Court may soon rule on the teacher salary equity issue. That ruling could pile on more state obligation - some say as much as $1 billion more. The timing is suspicious.
Too, legislators complain that Administration officials will not talk seriously about spending excesses. All attempts at in-depth discussions are just blown off in the 3-year drive for an IT.
You know it's always darkest before dawn, so perhaps that is all this portends. But it may also be darkest before being dragged into a black hole. We will know soon.
A section in Article 11, Section 9, of the state Constitution expressly forbids cities from taxing incomes. It says: "The General Assembly SHALL NOT authorize any municipality to tax incomes, estates or inheritances, or to impose any other tax not authorized by Sections 28 or 29 of Article 2 of this Constitution."
Incidentally, that provision also means that Article 2, Sections 28 and 29, do not authorize the General Assembly to tax incomes, either.
Government is not the solution to our problem; government is the problem.... We've been tempted to believe that society has become too complex to be managed by self-rule, that government by an elite group is superior to government for, by, and of the people. Well, if no one among us is capable of government himself, then who among us has the capacity to govern someone else? All of us together, in and out of government, must bear the burden. The solutions we seek must be equitable, with no one group singled out to pay a higher price. - Ronald Reagan
Legislature puts off budget decisions House memorializes Rep. Westmoreland
By Tom Humphrey, News-Sentinel Nashville bureau
June 21, 2002
NASHVILLE - The Senate sidestepped several tax increase proposals Thursday while the House set aside its regular agenda to eulogize a colleague who killed himself.
Both chambers then adjourned until Monday - just one week before a July 1 deadline for enacting a new state budget to avert a state government shutdown. There was no indication of a break in the long-running stalemate on taxes and spending.
In the Senate, lawmakers did take a step toward covering an estimated $435 million deficit in the current year's budget. By a 26-5 margin, senators approved a bill that authorizes the use of various reserve funds to cover the revenue shortfall for the fiscal year that ends June 30.
The measure has already passed the House, but must return to that body for concurrence on a Senate amendment. The amendment says that, when raiding a reserve fund, the withdrawal cannot be so large that it endangers a state program.
A decision on which funds will be raided, and for how much, is still a subject of debate to be decided in the overall state budget bill.
Eleven different amendments to raise various taxes were proposed to the reserve raider bill, sponsored by Senate Republican Caucus Chairman Bill Clabough of Maryville. A handful inspired lengthy debate, but all were ultimately withdrawn or defeated by voice vote.
At the outset of debate on the bill, Clabough warned that attaching tax increases to the reserve raid authorization could endanger efforts to balance even this year's budget.
House rejection of an accompanying tax could wind up sinking the reserve raid bill as well. The House and Senate have long been at odds over tax proposals.
"I think we're playing with dynamite when we put amendments on this bill," Clabough told colleagues. "Amendments on this bill could shut down government."
"Let's not get panicky here," countered Sen. David Fowler, R-Signal Mountain, who offered a series of tax amendments to the bill. He said the Senate has been waiting too long on the House, where an income tax proposal fell five votes short of passage last month.
"All I'm trying to do is hand the stick of dynamite back to them" in the House, Fowler said, arguing that otherwise the House "on June 29 will send us a no-new-taxes budget and dare us to vote for it."
A tentative no-new-taxes budget - nicknamed the Downsizing Ongoing Government Services, or DOGS, budget - calls for $945 million in spending cuts, including $373 million for kindergarten-through-12th grade education.
Fowler first pushed a complicated proposal that would have had voters deciding in November whether to call a constitutional convention on the subject of taxes. If they voted "no" on the call, a 4.5 percent state income tax coupled with a rollback in other taxes - would take effect Jan. 1. If they voted "yes," the state sales tax would have been broadened to cover most goods and services now untaxed.
The Fowler proposal was rejected on a voice vote, meaning no senator is on record as voting either for or against the idea. A recorded vote is mandatory if three senators ask for it, but Fowler could not get two colleagues to join him in his request.
No senator would even second Fowler's motion for passage of another amendment, calling for a new car tax and an increase in the sales tax along with a constitutional convention. He then withdrew other proposals.
Sen. Randy McNally, R-Oak Ridge, offered two tax amendments. One would have raised taxes on cigarettes and alcoholic beverages and the other would have increased the state sales tax by a half-cent per dollar. Both were killed on voice votes.
Sen. Rosalind Kurita, D-Clarksville, offered an amendment that would have raised the tax on cigarettes only - by 30 cents per pack to 43 cents.
After considerable debate, it was also killed on voice vote. The debate included a proposal by Sen. Tommy Haun, R-Greeneville, to include a $200 per year tax on nurses. Kurita is a nurse.
Sen. Doug Jackson, D-Dickson, offered an overhauled version of his Continuing Adequate Taxation and Services, or CATS, proposal - but then withdrew it, too, after some discussion. He said he will try to move the measure through regular committee channels next week.
The bill, which Jackson called "CATS II," raises taxes on cigarettes and alcohol as well as business. It also raises the sales tax rate to 8.75 percent statewide and applies the sales tax to some currently untaxed items - including newspaper subscriptions, vending machines, coin-operated amusement devices and club memberships.
In the House, where attention has been focused on Speaker Jimmy Naifeh's efforts to win new support for his income tax plan, the scheduled session was transformed into an impromptu memorial service for Rep. Keith Westmoreland, R-Kingsport.
Authorities say Westmoreland, charged with indecent exposure during a recent Florida vacation, died of a self-inflicted gunshot wound at his home Wednesday evening.
Naifeh and 22 other members of the 99-member House - including Republicans and Democrats on both sides of the income tax vote - delivered often emotional speeches on Westmoreland.
A sampling of some remarks:
House Republican Caucus Chairman Jim Boyer of Corryton: "This (the Legislature) is a family. Every one of you are my brothers and sisters and Keith was my brother... He was my friend and I was his friend. I am going to miss him."
Rep. Joe Kent, R-Memphis: "He was ashamed of himself. He was ashamed for his family. He was ashamed of what he did to this body ... He paid the ultimate price."
Rep. Joe McCord, R-Maryville: "To Keith, I want to thank you for being a friend. You were a better friend than I was to you, but I'm going to keep trying. ... I'm fortunate that you were part of my life."
Rep. Ronnie Davis, R-Newport, described Westmoreland as "a tough person" and "a close friend," then added: "It's a sad day when we let the media drive us over the edge."
Rep. Kathryn Bowers, D-Memphis, said she approached Westmoreland on Wednesday, then "hugged him and told him that whatever happened I'm with you 100 percent ... He kissed me on the forehead and said, 'I love you.' "
Rep. Chris Newton, R-Cleveland, called Westmoreland "a man of principle and convictions" and rebuked the media, especially radio talk shows, for "the hatred that has been spewed by individuals who did not know the man himself. ... The simple fact of the matter is that you hounded the man to death. ... You don't kick a man when he's down." At the end of the speeches, the representatives - at the urging of House Speaker Pro Tempore Lois DeBerry, D-Memphis - held hands and sang the hymn "Amazing Grace."
Tom Humphrey may be reached 615-242-7782 or humphrey@edget.net
Options number 1, 4, and 5 are nothing more than permanent tax increases in one or more forms. Option number 3 is nothing more than a stop-gap temporary measure. The state budget issue is just tabled for a month.
Option number 2 appears to be the best option (cut spending) but if not even the sponsor will vote for it, it has no chance of becoming reality.
It looks like the entire TN legislature (with some exceptions I am certain) needs to be replaced.
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