Gov. Bill Haslam’s state government spending plan that he’s offering to the Tennessee Legislature now calls for a slight enhancement to the small food-tax cut he proposed initially, and opts to have taxpayers continue funding certain programs his administration had originally slated for cuts.
The proposal would cut the food tax by an extra nickel per $100 in groceries mainly because it’s easier for retailers to calculate on most cash registers, the governor said Monday.
The state tax on non-restaurant food is now 5.5 percent. The governor originally wanted to drop the tax to 5.3 percent, but now wants it set at 5.25 percent.
“Quite frankly, we just felt like again, if we were going to move it, we might as well do more now rather than later,” Haslam told reporters after talking to 4-H youth participants at the War Memorial Auditorium in Nashville.
The measure would save the average family of four buying $884 worth of groceries each month $26.52 a year. That’s $5.30 more in savings than the governor’s initial proposal.
Haslam’s long-term goal was to drop the tax down to 5 percent over three years, but he says he now wants to accomplish that in two.
The additional cut will slice another $3.3 million from the budget, for a total cost of $20.4 million from the food tax reduction. The tax cut is in addition to the governor’s decision to set a four-year timeline on the elimination of the tax charged when people inherit estates worth more than $1 million a year.
The governor also wants to restore funding to several programs that had been axed because they were paid for with one-time money.
They include these additions:
• $1 million for family support services run by the Department of Intellectual and Developmental Disabilities.
• $4 million from increasing the daily payment to local jails housing state prisoners by $2.
• $3.9 million for Healthy Start and Child Health and Development programs, such as home visiting programs for first-time parents promoting healthy lifestyles and child abuse prevention.
• $1.4 million for peer support centers run by the Department of Mental Health. These facilities act as halfway houses for people transitioning out of hospitals.
• $1 million for land acquisition and maintenance at Radnor Lake state park in Nashville.
The edits come weeks before the state funding board plans to meet to review the latest state revenue and economic trends and predict tax collections for the next year.