Amid Looming Budget Issues, Haslam Doubles Down on Tax Cut Rhetoric

Gov. Bill Haslam has acknowledged that decreasing state revenues will make producing a new budget more difficult this year than any other he’s faced since taking office.

But the governor, speaking to a Rutherford County Chamber of Commerce luncheon in Murfreesboro this week, said the tax cuts he’s supported in the past were intended to attract and retain capital in the state, and as such the right thing to do.

“Businesses do look at the taxes they pay — it’s just a fact of life. And so, we’ve worked on making certain that Tennessee stays what it’s historically been: one of the lowest tax states,” Haslam said.

The Tennessee General Assembly has cut about $160 million a year in taxes, Haslam said. The taxes cut include the Hall Income Tax, a 10 percent cut from the grocery tax, the gift tax, which Tennessee was one of only two states with a tax on, and the inheritance tax.

“Prior to this in Tennessee, if you died you paid a penalty for that – beyond the obvious one — and we just didn’t think that was right,” Haslam said.

The shortage in revenue receipts is not from the sales tax, which is “at, or just a little below projections,” but with the state’s franchise and excise tax collections, “which is a little hard for me to explain – to understand, so we’re trying to dive a little deeper with our Revenue Department to see what the miss is there,” Haslam told reporters after the event.

Haslam noted he was worried by national reports showing that holiday weekend sales after Thanksgiving were down a bit. “Obviously, when you live on the sales tax, Thanksgiving weekend is a pretty big deal,” said the governor.

Haslam also touted his administration’s other efforts to produce a more business-friendly climate in the state, despite ongoing criticism from Democratic lawmakers. “The GOP promised that if we gutted worker and consumer protections that we would become an oasis of job creation. Instead, our workers are being left behind in an economic recovery that has led to lower unemployment numbers in most other states,” House Democratic Caucus Chairman Mike Turner said in a press release slamming the Haslam administration over the state’s lofty unemployment.

However, Haslam stood by the reforms to tort law and workers compensation that his administration had pushed as helping to make the state “a much more attractive work environment.” The governor suggested that the political source of any economic sluggishness can be traced back to Congress and the president — in particular, the government shutdown and the questions surrounding the Affordable Care Act.

“People invest capital into a market that they have confidence in,” said Haslam, adding that confidence in Washington is low right now.

“So, what we’re trying to do in Tennessee is to provide that predictable environment that people know what they’re investing into. Unfortunately, the situation in Washington makes that very difficult to do, but we honestly think we can do that in Tennessee, and create that environment,” Haslam said.