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Republicans Favor State Keeping Unexpected Revenues

Lt. Gov. Ron Ramsey says he’s standing by GOP leadership’s call to bank the $554 million in extra taxes the state collected from Tennesseans, despite calls from Democrats to give it back to voters or spend it.

Democrats, in the minority on Capitol Hill, argue the state should give the money back to taxpayers by further cutting the tax on groceries or stalling college tuition hikes.

“That’s not the way this needs to be used right now,” Ramsey, R-Blountville, told reporters Thursday. “We did not know for sure how much money we would have, and again, I think it’s good fiscal policy to keep that money in the bank until we figure it out.”

The millions of dollars represent revenues collected in excess of the state’s projections for the 2012 fiscal year which ended June 30.

Over-collecting taxes without giving some of it back is “simply irresponsible,” said House Minority Leader Craig Fitzhugh, who failed to convince Republicans at the end of the session to use what he predicted to be $400 million in excess revenues to avoid cuts to higher education and further reduce the grocery tax.

Ramsey chided Democrats for wanting to count tax dollars before they were collected.

“I think we have changed the mindset of state government this year. We’re not going to do on predicted. We’re going to do on what we know,” he said.

Fitzhugh and other Democrats want the governor to call a special session to further reduce the tax on food, which lawmakers lowered from 5.5 percent to 5.25 percent this year. They also want to freeze tuition, which the Tennessee Board of Regents and University of Tennessee Board have voted to hike by as much as 8 percent.

Haslam has said he’s not interested in a “knee-jerk special session.” His administration has maintained that the state is still uncertain how much it will actually have to dish out to absorb the costs of implementing federal health care overhauls, as they’re still deciding whether to expand TennCare under the law.

An expansion of TennCare, the state’s Medicaid program for the poor, will cost as much as $1.5 billion over five years, according to the Memphis Commercial Appeal.

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