Gov. Bill Haslam stopped off Monday at a Monroe County family-owned market and hardware store and put ink to another reduction in the state’s food tax.
Flanked by a number of East Tennessee Republican state lawmakers, the governor told a crowd of about two dozen locals that any tax cut on groceries benefits “all Tennesseans.”
Last year, the Tennessee General Assembly passed an initial reduction on the state’s portion of the sales tax on groceries, lowering the rate from 5.5 percent to 5.25 percent. This year it dropped to 5 percent even.
“Some people say, ‘That doesn’t save the average Tennessean a whole lot of money.’ Think of it this way: Of the total food tax that you pay, we have cut it 10 percent of the total amount that you pay,” said Haslam. “That is a good start on saving every Tennessean money.”
Haslam also took the opportunity to boast on navigation of the state’s fiscal ship in the rough economic weather the past few years.
“Maybe the most important thing we didn’t do is that we didn’t raise taxes — as a mater of fact, we cut them,” the governor said. “We cut the death tax, we cut the gift tax, we’re cutting the Hall income tax for folks over 65. But the most important tax I think we cut is this one, because the grocery tax is one tax that every Tennessean pays, regardless of where you live and regardless of how much money you make.”
With respect to lowering the grocery tax in the future, while Haslam said “we want to keep that going,” he stopped short of promising Tennesseans to expect another slice taken off next year.
“We obviously have to wait and see what happens with the economy and revenue,” he said during a press conference after the signing ceremony. “Our budget has taken some pressure. The addition of the Affordable Care Act meant a lot of additional costs to the state and some other things. We obviously would like to (cut it more), but like with every other budget you have to wait and see how it develops.”
State Sen. Randy McNally, who chairs the Tennessee Senate Finance, Ways and Means Committee, also wouldn’t commit to cutting the sales tax on groceries again in 2014.
“You know, there are other issues — (like) the professional privilege tax, that’s not uniformly applied, and a lot of people would like to see it go away,” said McNally, a Republican from Oak Ridge. “So there are number of things we can do as far as tax relief.”