Posted on 06/22/2002 9:39:03 PM PDT by GailA
Naifeh Optimistic About Income Tax Vote Reporter: Chris Bundgaard
An income tax vote looms for state lawmakers next week as they try to reach an agreement on how to balance the state budget. With a constitutional deadline in nine days, the House speaker now thinks he can pick up enough votes for his state income tax plan.
During his weekly news conference, House Speaker Jimmy Naifeh left no doubt about his commitment to a flat income tax and its chances of passing next week.
"See if we can't pick up necessary 3-4 votes that we need, and [I'm] optimistic that we are going to be able to," Naifeh said.
Naifeh remains optimistic that if it passes the House, the income tax will pass the Senate. He cited recent polls that asked more than if you are for an income tax.
"No one in the room would answer yes, but if you ask questions as advantages and disadvantages, then you get a different answer."
But lawmakers have only until June 30th to constitutionally balance the state budget. House finance members have meet three weeks straight looking at a no new taxes budget in case the income tax or any other revenue plan does not get majority support.
"We have got the responsibility to take to the floor an option that, should we not be able to agree on revenue, prevents the shutting down of government," Representative Matt Kisber said. On Friday, the group restored nearly all the K-12 education money that would have been cut under a no new taxes budget. Members did it by shifting $350-million dollars from various tax streams that normally go to local governments.
"If we have gotten to Thursday and Friday and haven't gotten any revenue measures passed, this is what we are going to have to look at." But first, expect that income tax vote, and possible votes on other tax plans.
Among the other revenue plans is the so-called C.A.T.S. 2 plan. It raises various fees and the state sales tax in order to fund state government at this year's level.
800-449-8366 + 1 + the last 4 digits of their Nashville legislative office or 615-741-3011 or TN GENERAL ASSELMLY
Plan cuts funds for cities, counties
By DUREN CHEEK Staff Writer
The House Finance Committee put the final touches yesterday on a budget plan that seeks to mitigate threatened cuts in K-12 education by keeping $368 million the state sends to Tennessee cities and counties.
The ''no-new-taxes'' proposal also would significantly downsize TennCare, lay off 2,500 state workers and reduce spending for higher education by $100 million next year.
Committee Chairman Matt Kisber, D-Jackson, said committee members do not like the proposal but must have a plan ready when lawmakers return next week to avoid a government shutdown, if no new revenue is found before the new fiscal year begins July 1.
Ross Loder of the Tennessee Municipal League, which represents the state's cities, said the group will wage ''an all-out assault'' on legislators to try to prevent them from passing such a budget.
''The committee plan that is now coming together I can describe only as a colossal act of stupidity,'' Loder said.
TML was scrambling to determine the town-by-town impact of the proposal, but Nashville would stand to lose about $40 million, according to Metro Finance Director David Manning. The Metro Council approved a new $1.3 billion budget Thursday night, including $80 million in new spending.
The state shares about $700 million with local governments each year.
The $363 million in ''state-shared taxes'' would help avert a possible $375 million cut in the state's Basic Education Program.
''The whole last two weeks have been devoted to preparing an alternative to shutting down government if we can't agree on new revenue,'' Kisber said after the committee approved the plan yesterday.
''While it is the desire of no one that I have talked to within the House … to implement these cuts, it is understood if we fail to agree on new revenue we are forced to shut down government or have a no-new-taxes budget.''
Still pending are House Speaker Jimmy Naifeh's $1.1 billion tax proposal that includes a 4.5% state income tax and an alternate proposal by Sen. Doug Jackson, D-Dickson, and Rep. Frank Buck, D-Dowelltown, to raise about $807 million in mostly sales and business taxes.
Naifeh's plan fell five votes short of the needed 50-vote majority last month, but he said yesterday he is working to pick up the ''three or four'' votes he needs to pass the plan in the House. He said he is still optimistic that he can pass it.
The speaker raised the possibility of calling a special legislative session to continue his quest for the money he thinks is needed for education and other areas.
After two weeks of hearings and votes on a variety of cuts and new fees, the committee yesterday turned its recommendations over to the legislative staff, which will work through the weekend to put the proposals into bill form so lawmakers can act on them next week, likely Thursday or Friday.
The committee also will consider any tax measures that are proposed.
Kisber said that those legislators who needed to attend the hearings the most were the ones who missed most or all of them, and they will be the ones ''moaning and groaning'' next week when the legislation is discussed.
''This galls the hell out of me,'' he said.
The committee voted to keep revenue it shares from the beer excise tax ($3 million), the beer wholesale tax ($94 million) and the Hall Income Tax ($71 million) on stock and bond earnings. The state also would take back the $200 million it shares with local government from the 6% state sales tax.
Rep. Tommy Head, D-Clarksville, made the motion to take the sales tax money, and Rep. Ken Givens, D-Rogersville, proposed the raid on the others. Several other state-shared taxes, including about $85 million in gasoline tax and motor vehicle fuel tax, were not touched.
The committee decided not to revert to the old Medicaid program but to recommend downsizing the TennCare program to take care of people who meet Medicaid eligibility requirement and about 50,000 who do not have and cannot get health insurance. There are about 300,000 people on the rolls in that category.
The committee voted to keep the Department of Tourism operating by taking away the ''premier resort'' status given to Pigeon Forge and Gatlinburg, which allowed those towns to keep $5 million in state taxes they collect.
State Comptroller John Morgan told the committee that taking away state-shared taxes would result in inequities in communities that cannot replace the lost money.
''When you start taking taxes that are not allocated based on fiscal capacity (to tax) and divert them to another purpose, and leave it to those local governments to replace it, then that unequal fiscal capacity really comes into play and creates wide disparities across the state,'' Morgan said.
TML's Loder said the no-new-taxes budget would do ''major damage to our system of government.''
''Those legislators who have been willing to vote for a plan like the speaker's income tax plan to prevent this from happening need to know that nobody's off the hook if this becomes law,'' Loder said.
''The blood will be on the hands of every legislator who votes for this to become law.''
Worries about job cutbacks, tight budget raising state workers’ tension
By EMILY HEFFTER Staff Writer
Huddled over their club sandwiches yesterday at a downtown cafe, Kathy Hargrove and her colleagues were discussing it again.
Their jobs. The state tax debate. The calendar approaching the end of the fiscal year.
''We have no idea what's going on,'' said Hargrove, who works for the state Treasury Department. ''We don't know whether we're going to have a job. We don't know whether to show up for work July 1 or not.''
Hargrove is one of 13,000 state employees in Nashville and 42,000 statewide. While legislators hash out the details of how to pay for state government, rank-and-file employees say tension is rising in their offices. They don't agree on whether there should be a state income tax — many agree with the horn-honkers circling Legislative Plaza. Most seem to agree they're caught in the middle of the hottest issue in Tennessee.
And if they forget, the protests outside their windows remind them.
''The morale of state employees is certainly not at an all-time high, but I don't think that there's any kind of panic or anything among state employees,'' said Nat Johnson, the assistant commissioner of the Department of Personnel.
Johnson said he thinks state employees have gotten used to the last-minute tax debates in the legislature.
''I think state employees are optimistic that there's going to be a reasonable solution to it and that the state government is going to continue to operate,'' he said.
Linda McCarty disagrees. McCarty is the executive director of the Tennessee State Employees Association, an advocacy group for state employees.
''Here we are past the middle of the month, and the discussion is that we might have 5,000 fewer employees … or that we might not even have a balanced budget,'' she said.
The House Finance Committee yesterday was finishing a no-new-taxes budget plan that includes laying off 2,500 state employees.
''We think the state employees are going to get shafted on either budget,'' said Rosa Jennings, who works for the Department of Children's Services. She said she feels annoyed legislators haven't worked for a state lottery, and she is tired of the negative view people have of state workers.
McCarty described state government offices as stressful and confrontational. She said workers feel defensive, demoralized and disgruntled.
''When you've got more on the plate to do … but you don't have the resources to get the job done, it's a humiliation, day after day,'' she said.
On top of all that, she said, is the uncertainty. Johnson said the state personnel department hasn't told employees what to do if there is no budget a week from Monday, when the next fiscal year begins.
''We're trying to be prepared for whatever scenario is going to come about,'' he said.
He wouldn't answer questions about how they have prepared for the scenario of no budget. Nobody knows what is going to happen, he said.
In the meantime, during smoke breaks and rendezvous around coffee machines in state office buildings, over club sandwiches and on the parking lot trolleys, state employees will continue to swap rumors about what the next week will bring for them.
''Our legislators need to do something,'' Hargrove said. ''They need to do it soon.''
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