Press Release from Tennesseans for Fair Taxation, Oct. 11, 2010:
Tennessee Governor Candidates Unwilling to Address the Real Problem
Both major party candidates for governor addressed many issues facing the state at the Oct. 7 Knoxville debate and the Oct. 9 Memphis debate, but failed to offer real solutions to Tennessee’s continuing and growing revenue problems.
Tennessee is currently experiencing unemployment rates that hover near the 10 percent mark, skyrocketing college tuition costs, one of the highest violent crime rates in the nation, and increasing levels of children and seniors living in poverty — this is not the time to address recurring budget shortfalls with further cuts in vital programs and services.
However, both candidates have consistently failed to address the problem at its core: the fundamental flaw in Tennessee’s tax structure that leaves the state perpetually behind in funding and quality-of-life indices. The state relies far too heavily on the highest sales tax in the nation to garner state revenue. The lack of diverse revenue sources has underfunded Tennessee even when the economy was prospering — now in the midst of a national recession, Tennesseans are pinching pennies and we’ve seen almost two years of revenue shortfalls. “Their unwillingness to engage with the real problems of Tennessee shows a lack of leadership,” states former board chair of TFTF, Dave McIlwaine of Knoxville.
The $1 billion revenue shortage will only grow next year when federal stimulus and non-recurring funds expire. Vital programs that received one-time funding in 2010-11 and potentially face cuts next year include Early Childhood Education, Safe Schools, Child Care Subsidy for At-Risk Families, and Minority Health Initiatives, among dozens of others. Also targeted for further cuts are services for intellectually and developmentally disabled citizens whose programs have already suffered an 89% cut in state funding in the last six years. “Tennesseans need real solutions and not the short sighted, quick-fix of more painful cuts,” Dave McIlwaine says. “Our leaders must pursue new revenue options and address the fundamental flaw in our tax structure.”
Two-thirds of Tennesseans would receive a tax cut and $400 million in additional revenue would be raised under a bill introduced by Rep. Johnnie Turner and Sen. Reginald Tate. The Tax Cut and Job Creation Act would eliminate the tax on food, reduce the general sales tax, and introduce a tax on personal income with generous exemptions and a higher rate for the wealthy. “Tax modernization is vital to our state’s economic recovery and viability in the future,” SOURCE says. “Revenue options like the Tax Cut and Job Creation Act would put the state on the path to economic recovery immediately and improve economic security for our children and grandchildren with increased funding for public safety, public schools, higher education and a safe environment. Tennesseans need tax modernization now.”
“If the candidates are unwilling to embrace the Tax Cut and Job Creation proposal, then how will they balance the budget after they’ve made all the cuts they can make in good conscience and there is still a shortfall? And how will they jumpstart the state’s economy without a cut in the sales tax to encourage consumer spending?” asks Dick Williams, board chair of TFT.