Kentucky BUMP!!
Posted on 06/24/2002 7:39:34 PM PDT by GailA
Legislature nears end of fiscal year without budget solution Action on alternative tax plans was deferred Monday while House Speaker Jimmy Naifeh continued looking for the handful of votes needed to pass a 4.5 percent state income tax.
Gov. Don Sundquist met with legislative leaders to assess the chances of passing Naifeh's plan, with the end of the fiscal year less than a week away and the state needing $800 million in new tax revenue to keep services at their current level. Failure to pass a budget by Sunday night would shut state government down. "The most encouraging thing I heard today was that Speaker Naifeh thinks he can get the three votes he needs," said Sen. Jerry Cooper, D-Morrison, who was in the closed-door meeting with Sundquist, Naifeh and other legislative leadership. "Then we'll have to see if we can find 17 in the Senate." The Naifeh plan fell five votes short of a majority on May 22. There were discussions of altering the Naifeh plan in an attempt to pick up votes, but apparently no changes were agreed upon Monday.
The other tax plans up for consideration Monday included the so-called CATS II plan, a combination of sales, business and sin tax increases; and a proposal by Sen. David Fowler, R-Signal Mountain. Also on the table is a no-new-taxes budget that cuts $750 million from current levels of spending. "Timing is everything and patience is a virtue," said Sen. Doug Jackson, D-Dickson, sponsor of the CATS plan, which was on the calendars of both finance committees but discussed in neither. "We're going to hold this until it is clear the House cannot muster support for the income tax."
Fowler's plan is a combination of increased sales taxes, automobile taxes based on a car's age, sin taxes on tobacco and alcohol, and expanding the sales tax to some services and exempted items. It also would take money from the highway construction fund, but replace it by raising the gasoline tax by 2 cents a gallon. Fowler asked members of the Senate Finance Committee to study his proposal overnight, and said he would seek a vote on Tuesday. "We can't do nothing and I don't believe the income tax will pass," Fowler said. "We're past the day where you can't support anything. I believe the committee needs to act tomorrow (Tuesday)."
Sen. Robert Rochelle, D-Lebanon and an income tax supporter, said the plans of Jackson and Fowler would raise taxes on most citizens, whereas the income tax plan would mean many, if not most, would pay less state tax. "At some point we need to realize the majority of Tennesseans could have a tax cut," Rochelle said. "Speaker Naifeh's plan is the only one under discussion right now that does that." The income tax plan would remove the sales tax from food, non-prescription drugs, and most clothing. It also would eliminate the Hall Income Tax on dividend and interest income. State income taxes can be deducted from federal taxes, and it would apply to people who live outside Tennessee but work here.
Tax protesters returned along with lawmakers, lining the street between Legislative Plaza and the Capitol waving signs and encouraging passing motorists to honk their horns if they opposed an income tax. The Senate Finance Committee spent the morning discussing the no-new-taxes budget devised by its counterpart in the House. The budget would mean the layoff of 2,500 state workers. About 145,000 people would lose TennCare benefits. Higher education would lose $93 million. While public schools would get slightly more state funding than in the current year, the state would take away more than $360 million in taxes now shared with local governments to pay for it. Sen. Bill Clabough, R-Maryville, said it was ridiculous to take state-shared taxes to avoid K-12 education cuts. "I feel like we're breaking a contract with local governments," he said. "... We're going to take their tax money, and they'll either have to raise their property taxes or do without those basic services" such as fire prevention, police protection, roads and local schools funding.
Cities would take the biggest hit under a proposal to use the state-shared taxes, primarily raised through the sales tax; counties would suffer most if the state choses to cut $373 million in state funding for public schools. "Neither is a good choice. I don't think anybody is proud of the choices," said Sen. Jim Kyle, D-Memphis. Rochelle said he was afraid that taking state-shared taxes would force cities and counties to default on bonds. The House and Senate met briefly in afternoon floor sessions, but adjourned without voting on any significant issues. Votes on state budget plans were not expected until later in the week. The Senate was scheduled to meet Tuesday morning, the House in the afternoon.
Stephanie Rodrigues State employees wait for budget solution
Another day of waiting, means more frustration for the state employees who are anxious to know what their future holds.
State employee Lashunda Wiggins is asking for a solution to the state's budget crisis. "You come to work everyday and work for the state, and are wondering what's going on with the budget, how the funds are being spent, and why this problem hasn't been taken care of." Wiggins is one of the many state employees who stand to lose their jobs, unless lawmakers can make the budget work.
"It's something we go through every year, actually this isn't the first time we've gone around every year, when the time comes for the end of the fiscal year and we're told there's no money, and I'd like to get a raise for a change," said state employee Marietta Rudd.
But lawmakers say they need at least $877 million in new money just to maintain state agencies at their current levels. And as time runs out in Nashville, Lashunda Wiggins says all she can do is wait, and hope for the best. I had the chance to speak with several state employees this afternoon, while they say the budget is a concern, they think the idea of massive cuts are just a bluff.
Which plan do you think the Tennessee General Assembly should approve to solve the state's budget crisis? DOGS (drastic cuts in gov't services incl. education; no change in current taxes)
CATS (protect schools, some other services; sales tax maximized)
State income tax
None. There is no crisis
Kentucky BUMP!!
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