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Featured Tax and Budget

Tax Cuts on Food, Inheritances Pushed by Haslam

Gov. Bill Haslam Tuesday afternoon introduced his 2012 legislative agenda, announcing that he will push for two tax cuts during this year’s Tennessee General Assembly session, which also began Tuesday.

The tax cuts come by way of the governor’s proposals to raise the state inheritance tax exemption from $1 million to $1.25 million and to lower the state’s portion of the sales tax on food from 5.5 percent to 5.3 percent.

A family of four spending $884 a month on groceries would save about $21 a year under the Haslam tax cut.

The proposals were something of a surprise move from the governor, who has said as recently as last month that such cuts would be unlikely this year due to the state’s tight financial situation.

The proposed tax cuts are just the beginning for the governor, who said the cuts were the first step toward his goals of lowering the food tax to 5 percent and raising the inheritance tax exemption to $5 million, to match the federal exemption mark, by the end of his first term.

Estimates are that the two-tenths of a percent decrease in the food tax will lower the state’s revenues by $18 million. For the change in the estate tax, that number is $14 million.

“I just think it’s important, if we’re to lower taxes for Tennesseans, that’s the only way to really touch every Tennessean in a significant way,” Haslam said of his decision to push for a food tax cut.

Lt. Gov. Ron Ramsey last month told reporters that he “wasn’t a big proponent” of cutting the food tax and that it probably wasn’t wise, anyway, given that sales taxes are the main revenue source for state and local governments. While Speaker Beth Harwell stood by the governor’s side at his press conference Tuesday and voiced her support for Haslam’s agenda, Ramsey did not attend but released a brief statement.

“I am excited to work with Gov. Haslam to move Tennessee forward toward more jobs, less spending and smaller government,” he said. “The governor has chosen his priorities well. This is a solid agenda that our unified Republican majority can proudly stand behind.”

Ramsey conceded that his priorities differ from the governor’s in some areas, but said he’d support Haslam’s agenda.

“I’ve always been in favor of reducing the estate tax, and so that’s one of his priorities too,” the Blountville Republican told TNReport. “So, I think if you look at the package from top to bottom, it’s something I agree with and can’t wait to help him pass it.

“[The food tax cut] has not been a priority of mine, I will agree with that, because that’s something I feel like is a stable base of revenue that we have. But reducing it from 5.5 to 5 over three years – that’s fine. It’s not like we’re trying to do away with the sales tax on food,” he said.

Haslam’s agenda did not include a push for a cut in the Hall income tax on investments, which has been a goal for some Republicans, including Ramsey.

“That fight’s not over yet either, OK,” Ramsey said. “That’s just not one of [Haslam’s] priorities.”

As for raising the state inheritance tax exemption, Haslam said he believes the move will create more revenue for the state in the long term by keeping people in the state.

“There are a whole lot of people who used to live in Tennessee who don’t anymore because it’s cheaper to die in Florida,” he said. “And I can tell you a whole lot of people who spend less than half of their year in Tennessee to avoid that estate tax specifically.”

Speaking to reporters after Haslam’s remarks, Harwell expressed her full support for the governor’s agenda and was particularly pleased with the proposed change to the estate tax. She said she was glad to see the state raising the exemption to a reasonable level and called Tennessee’s current exemption “way out of line.”

Among the other items in the legislative package were proposals to give individual school districts more autonomy with regards to salary schedules and average class size and changes to the state’s hiring and employment practices. The governor also proposed legislation that would restructure 22 state boards and commissions, which he called the “first step in an ongoing comprehensive review process.”

Andrea Zelinski contributed to this report.

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Education Featured Health Care Tax and Budget Transparency and Elections

Bredesen: Politics Behind Report on Farr, Tax Variances

Former Gov. Phil Bredesen said Tuesday he believes the people who disagreed with former Revenue Commissioner Reagan Farr “got their final shot in” against Farr with a recent comptroller’s report that criticized the department on tax variances.

Bredesen said he has not read the report from Comptroller Justin Wilson but has talked briefly about it with Farr and that he has never had any questions about Farr’s integrity.

Bredesen made the comments after an appearance at the University of the South in Sewanee with former Vermont Gov. Jim Douglas, in which Bredesen said his style in dealing with the Legislature sometimes was to “go right around them.” He noted that former Gov. Don Sundquist did not use the “bully pulpit” of the office for the power of persuasion with the people when Sundquist proposed an income tax.

And Bredesen, a former mayor of Nashville, got his own shot in about term limits at the Metro Council in the capital city, calling the limits of two four-year terms a “disaster.”

Bredesen said his contact with Farr about the comptroller’s report lasted only about 30 seconds.

“He told me about it. I said, ‘That’s fine. You know the crew over there that was trying to do you in got their final shot in. There’s now a report. Fine,'” Bredesen said.

Bredesen said he never had any particular problems with what Farr did.

“He had a department which was very politically divided internally about the way it should operate,” Bredesen said. “This department has always had a group of people who thought, ‘Our job is tax collection, period. What we need to do is audit returns and collect taxes, and that’s the end of it.’

“But you’ve also got people that say, ‘No, no, no, tax policy and the way you do things is part of the process of the department. It’s part of economic development.’ Reagan was in that mode. I think the people that disagreed with him kind of got the final shot in there. I’ve never had any questions about his integrity or decision-making process.”

The report, dated Oct. 17 and addressed to leaders in the Legislature, noted a frequency in recent years where tax variance award letters involved references to economic development. Farr served as Revenue commissioner from 2007-2010. The report also said key department employees were sometimes left out of the decision-making process.

Gov. Bill Haslam said this week he has read the report and wants to concentrate on setting clearly defined procedures in the department.

Bredesen, a Democrat, and Douglas, a Republican, participated in a discussion formally called “American Politics: The View from the Center.” Both are seen as moderates in a time of polarized partisan politics. But that did not prevent Bredesen from being vocal in his views on matters of how to govern.

Bredesen said the direct power of the governor to do something is “demonstrably less” than the CEO of “a good-sized company,” saying the governor is limited in terms of what the Legislature will do and who can be hired and fired.

“What is unparalleled is you have the bully pulpit,” he said. “If you decide as governor to talk about K-12 education for six months of the year, that’s what will get talked about in the state. The chambers of commerce will talk about it. The newspapers will write about it. TV will do stories. You can make that happen. So I’ve always seen the power of the governor as the power to persuade.

“And the way to get things done in the Legislature is to go right around them.”

He noted his former legislative liaison, Anna Windrow, was in the audience and “probably crying” at the comment. His reference to going around the Legislature was to make his point about taking an issue directly to the people.

Bredesen told the audience he went into the governor’s office after Sundquist had attempted to get an income tax approved. Sundquist, a Republican, failed and was largely ostracized by his own party.

“You sort of watch it and say, you know, instead of making a case to the people of the state as to why something needed to change in the tax structure, he didn’t do any of that. He just tried to do it by twisting arms in the Legislature,” Bredesen said.

“What happens is you get your arm twisted, and then you go back home and find out people have got pitchforks about the subject you’re talking about.”

Bredesen won in 2002 on a platform that did not include a proposal for an income tax. He said the state didn’t need one, to the chagrin of some in his party. Bredesen won a second term handily and never proposed an income tax in his eight years in the office.

Bredesen said he had no problems with term limits in the executive branch of government because of the power of incumbency, but he said the term limits enacted by referendum for Nashville’s Metro Council have been disastrous.

“I just think it’s been awful for the city,” he said after the event, pointing to a couple of veteran lawmakers with institutional knowledge as examples of those whose experience can benefit the council.

“I’m not quite sure what problem you’re solving with term limits, and what I think it did is first of all you dramatically enhance the power of the mayor. There’s nobody left on the council with the kind of, you know, the history. There’s no Charlie Fentress on the council. There’s no Willis McAllister on the council.

“You get a bunch of people who are in there and really feel they have to move and shake and make things happen in their early sort of terms. I don’t think it’s worked well for the city.”

Bredesen and Douglas met with students at the university earlier in the day, and Bredesen said the young people asked about how the governors made difficult decisions.

“They wanted to know, ‘How is it done? Tell me about some challenge you had’ — in my case TennCare or something — really a nice set of questions for somebody who is a senior ready to go out in life, not saying, ‘Let me debate,'” Bredesen said.

He said it was different from encounters with people who want to express a view about a specific issue.

“These were young people who weren’t so much concerned about that as they were just, ‘OK, I want to be effective in the years ahead. I’ve got a couple of former governors in front of me. How did you do this?'”

They also wanted to talk about jobs, he said.

“If you’re a senior in college in this economy today, you’re scared,” Bredesen said. “You’re scared about what the workplace holds right now. This is the time in which they want to get out, they want to get a job, they want to build a life, and it’s a pretty scary world out there right now.”

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Business and Economy Tax and Budget Transparency and Elections

Haslam Promises Openness On Amazon

Gov. Bill Haslam insisted Friday he has not changed his position on negotiations with Amazon.com on the collection of sales taxes and said whatever agreement might be struck with the retail giant the people of Tennessee would be informed about it.

Meanwhile, former Commissioner of Revenue Charles Trost, on whose watch the original Amazon deal was made in Tennessee, declined to comment Friday on details of the state’s current arrangement with the company. Current commissioner Richard Roberts, whom Haslam said is leading the talks for his administration, declined to comment on any talks as well.

Haslam says he wants Amazon to collect sales taxes on its transactions in Tennessee in the future, and his administration is involved in talks with Amazon on how to settle the issue of whether the company should have to collect the tax.

But Haslam’s predecessor, Phil Bredesen, struck a deal last year before leaving office where Amazon would not have to collect sales taxes as the company established large distribution centers in Hamilton and Bradley counties, bringing more than 1,000 jobs to the state. Amazon has since announced the addition of a distribution center in Lebanon

Haslam has said he planned to honor the Bredesen agreement, which was handled with little transparency and has stirred interest among some legislators concerned about the erosion of the state’s sales tax base. Legislators from the Chattanooga area, home of the first two distribution centers, have generally supported the Bredesen deal because of the jobs it creates.

Negotiations between the Haslam administration and Amazon have raised questions on exactly what the arrangement might become and whether it represents a shift in the state’s policy.

“Nothing has changed from the state’s commitment at all,” Haslam said Friday. “We are in ongoing discussions with Amazon. Everybody knows that. We’d love to see them grow more. Number two, there is quite a bit of discussion in the Legislature about exactly how that should work out.

“I wouldn’t be being honest if I didn’t say I’d love for them (Amazon) to collect sales tax.”

The governor has said all along he would like to get the definition of the state’s long-term relationship with Amazon nailed down. He has also said there needs to be a national solution to the issue of online retailers collecting sales taxes, and Amazon officials have said they believe a national approach is best.

But given the continuation of talks with Amazon, the future of the state’s arrangement continues to be scrutinized.

Trost, a Nashville attorney who replaced Reagan Farr as commissioner of Revenue last Sept. 10, would not comment on details of the Bredesen deal.

“I really am not in a position where I can,” Trost said. “The taxpayer confidentiality rules have put me in a position where I just don’t even want to start down the road talking about it.”

Trost said he is not even in a position to confirm that the deal was struck while he was commissioner.

“What’s in the public record out there, if you looked at the timing on it, when I was in office, you can draw your own conclusions,” Trost said.

“It’s just not a topic I feel comfortable talking about to the press or anybody else. It’s just … I’ve thought about this … I’m no longer the commissioner. There is a new administration. There is a new commissioner. The issue is still in the public domain for discussion. I think my best policy is not to add myself to the discussion.”

The Amazon arrangement was made late in Bredesen’s time in office. Bredesen informed the incoming governor, Haslam, of the deal with the explanation that if Amazon were not given the break on tax collections, the company might have put its facility in Georgia.

“I have the utmost regard for Governor Haslam, Governor Bredesen, my successor as commissioner and my predecessor as commissioner,” Trost said. “There’s a new group dealing with these issues, and I’m just not going to get into it. That’s the only position I can take.”

Roberts had a similar response.

“I can tell you that the state statutes prohibit me from discussing any taxpayer, whether it be you or Billy Bob’s Bait Shop or an unnamed major Internet retailer,” Roberts said. “Just as a matter of policy we simply can’t comment on individual taxpayers.”

Roberts said he cannot confirm that the administration is talking to Amazon.

“Our policy here requires that we maintain confidentiality. The reason is we have to give any taxpayer the confidence that what they file with us and their dealings with us will not wind up in the public domain. Until the legislature changes that — and I also believe it’s the right policy — I just simply can’t confirm or deny,” Roberts said.

Sen. Andy Berke, D-Chattanooga, speaking to reporters Friday, picked up on the issue of discussing the talks.

“I can’t quite tell what the governor’s position on this is, but we are making a mistake by talking about our discussions with Amazon without having some kind of firm agreement with them,” Berke said.

“One of the rules of economic development over the last several years is that we don’t talk about ongoing discussion. Now, if there’s going to be an agreement, we should have an agreement with them before we start talking about it.”

Two lawmakers have filed legislation that would require Amazon to collect the sales tax. When one of the sponsors, Sen. Randy McNally, R-Oak Ridge, suggested a two-year grace period on collecting the tax might be an answer, Haslam said that would leave the arrangement uncertain.

Haslam said Friday he has not personally had any direct conversation with Amazon, with Roberts taking the lead.

“We’re going to honor our commitment to them, but we would love to figure out a way long-term for them to pay (collect) sales tax and to build an employee base here,” Haslam said.

The issue has become ticklish for the state since it is highly interested in increasing the number of jobs in Tennessee, but there is a concern that it creates a double standard that hurts other retailers who collect the sales tax.

An opinion from state Attorney General Robert Cooper said distribution centers, like the ones Amazon is constructing, would present enough physical presence to require the tax collection and that the legislation sponsored by McNally and Rep. Charles Sargent, R-Franklin, would be constitutionally defensible.

Lt. Gov. Ron Ramsey has expressed frustration that he cannot learn the specifics of the Amazon deal, and at one time Ramsey attempted to meet with Matt Kisber, commissioner of Economic and Community Development under Bredesen, about the arrangement. But Ramsey has said he never got his answers from Kisber.

Haslam was asked Friday if, when an arrangement with Amazon is reached, the public would be informed what it is.

“Sure,” Haslam said. “You bet. You bet.”

Haslam was also asked about the time frame for a deal.

“It’s too early to say that,” he said. “We’re in discussions with them. I’d love to have some sort of agreement with them where we all do that by the time the Legislature comes back (in January). Remember, in the context of all this, there’s quite a bit of controversy in the Legislature about how this should go forward. So it’s not solely an administration decision what happens here.

“We’d love to come to an agreement that works where the Legislature says, ‘OK, that’s the right approach for the state of Tennessee long-term,’ and Amazon says, ‘Great, we can live with that, and we will grow and expand in Tennessee.'”

A call Friday to the media office at Amazon’s corporate headquarters was not returned.

Haslam said he does not believe the attorney general’s opinion has changed the administration’s approach to the issue.

“Obviously, the Legislature is a major factor in what gets worked out with anything in the state of Tennessee. It’s not different with Amazon than any other item, and so I think Amazon is aware of that,” Haslam said.

“We’re continuing to have conversations. I’m not going back at all in what the state has told Amazon. I’d like to work out something where we took this issue off the table, and Amazon says, ‘Great, we can live with that,’ the state of Tennessee says, ‘Great, we can live with that, too,’ and we have a great relationship.”

Haslam said he did not believe the recent announcement of the distribution center in Lebanon changed the dynamics of the negotiations with Amazon, and he noted that the company has talked of even more distribution centers in the state. Haslam also pointed out that individuals who buy an item online are supposed to pay the tax regardless of the business’s status.

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Business and Economy Featured News Tax and Budget Transparency and Elections

GOP Showing Little Taste for Lower Food Tax

Now that Tennessee Republicans are “large and in charge” of state government, as minority Democrats like to snidely put it, they seem to have lost their appetite for cutting the state’s sales tax on food.

Even though Tennessee is looking at $62.3 million in excess revenues over the last 11 months, lowering the tax isn’t likely to happen any time soon, say powerful majority-party politicians.

Nevertheless, Tennessee Democrats are floating a plan to give part of the overage back to taxpayers — by reducing the 5.5 percent tax on food and making additional funds available for “needs-based” college scholarships.

The Volunteer State now charges a 7 percent sales tax on items other than food and is one of seven that offers a reduced rate on groceries, although 31 states exempt most non-restaurant food purchases from sales taxes.

Republicans, who consolidated their political power in the 2010 election promising a more fiscally disciplined, taxpayer-friendly state government, last month scoffed at Democrats for offering up a plan to reduce the tax on food.

“It’s just irresponsible,” House Republican Leader Gerald McCormick told TNReport. His preference is the state keep any extra tax collections safely locked up in the government’s savings account for spending later in leaner times, like when Washington starts ladling out smaller helpings of federal largess.

Lt. Governor Ron Ramsey claims he’d “love to eliminate the food tax.”

Not now, though.

“I hope and pray that Tennessee will soon be in a position to do just that,” the Blountville Republican said in an e-mailed statement shortly after the Democrats served up their tax-cut idea. “But a revenue blip does not a surplus make.

“While the new revenue numbers are encouraging, the last few years have taught us that we cannot afford to be cavalier with the contents of our treasury,” he said.

Ramsey, who recently proclaimed that “a basic philosophical difference between Democrats and Republicans” is that the latter favor taxpayers keeping their own money in times of revenue surplus, accused Democrats of “craven political posturing” for proposing a tax cut on groceries in the current fiscal climate.

Requests through Ramsey’s spokesman for further comment and explanation from the lieutenant governor went unanswered.

Republicans didn’t used to be so hostile to the idea of a tax cut for Tennesseans who purchase food. Indeed, some, like Kingsport Rep. Tony Shipley, once upon a time got elected promising to push for food-tax relief.

In 2007, Sen. Mae Beavers was at the forefront of the legislative effort to reduce the food tax, ultimately by half a cent. At the time, she complained that wasn’t enough. But now she’s just irritated the matter has popped up again.

“I really take offense to (Democrats) making a political issue out of it this time when they had a chance to take it all off a few years ago,” said Beavers.

Gov. Bill Haslam was more conciliatory towards the proposal, saying he “100 percent” agrees with Democrats’ desire to reduce taxes on groceries when the state collects excess money from taxpayers.

In principle, anyway. He questions though whether tens of millions of dollars in over-collections truly represents a “surplus” at this time.

“If we had a surplus, we should not be keeping the money. I couldn’t agree more,” the governor told TNReport. “It’s just way too early to say that because I have a feeling we’re going to have to make some hard calls.”

The catch, Haslam says, is state government would need to consider cutting millions of dollars in services now covered with $160 million in one-time money, address rising education costs and weather instability from the economy and federal government in order to reduce the tax.

“There’s a whole lot of stuff in there I can guarantee the Democrats and most of the Republicans don’t want to cut,” Haslam said. “My first word would be to the Democrats, how do you feel about that $160 million in services? Are you ready for all of those to go away, because our overage is not enough to do both.”

Rep. Craig Fitzhugh, the leading Democrat in the House, says he sees nothing particularly ludicrous about proposing to cut “one of the highest sales taxes on food in the entire country.”

“If that’s absurd, well, we need more absurdity in government, because I think that’s an excellent option that we may have,” said the Ripley Democrat.

Lawmakers this year considered a plan to raise the tax on soda in exchange for lower food taxes, but that issue went nowhere. Lawmakers did manage to lower taxes on investments for some senior citizens by raising the income benchmark by $10,000 to exempt more individuals and couples from paying the Hall income tax.

While legislators play political ping-pong over the excess taxpayer dollars, state government observers of various ideological stripes agree the partisan bickering ought to be set aside in favor of a serious policy-driven conversation.

“It’s not enough to rely on the whims of either political party to return excess revenue to taxpayers,” said Justin Owen, executive director of the Tennessee Center for Policy Research, a free-market think tank which has advocated a reduction in the grocery tax.

What the state should do is automatically kick any excess revenues back to the public at the end of each fiscal year, he said.

Ben Cunningham of Tennessee Tax Revolt said it seems obvious to him “any surplus ought to be returned to the taxpayer.”

“The time to give tax revenue back to the families to put back in the family budget is in the good years, this way you even out the ups and downs of tax revenues and you better control the size of government,” said Cunningham, a prominent voice in Tennessee’s tea-party movement.

Tennesseans for Fair Taxation, a coalition of liberal activists, unionized workers and progressive advocacy groups, has long pushed for reducing Tennessee’s reliance on a sales tax. TFT argues Tennessee’s tax on food is perniciously high — that it, in essence, constitutes a “tax on life.”

“Groceries represent a much bigger portion of low-income families’ budgets while it only represents a small fraction of most high-income families’ budgets,” argues TFT. “By eliminating the tax on food, the average family would save enough annually to buy a whole month’s worth of groceries.”

TFT’s preference for instituting a state income-tax to offset reduced revenues from a lower or eliminated grocery-tax doesn’t seem likely to gain much traction in the GOP-dominated Legislature, where the wheels are in motion to constitutionally ban an income tax.

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Press Releases

Freshman Rep. Elam Touts Accomplishments of TN’s ‘Historic Conservative Majority’

Press Release from the House GOP Caucus, June 8, 2011:

Mount Juliet Legislator Calls First Session the Most Successful in Tennessee History

(NASHVILLE, June 8, 2011) – After years of near one Party control in Tennessee politics, Republicans won control of the Governor’s mansion, Senate, and House for the first time in the history of the State. Representative Linda Elam (R—Mount Juliet) played a key role in the opening session of the 107th General Assembly and Tennesseans immediately benefitted from the conservative leadership.

“It is an honor to be a part of such a historic conservative Majority,” remarked Rep. Elam. “Tennesseans understand we pushed through a conservative, pro-growth agenda that reflects their values. They can take heart that, finally, their Representatives in Nashville are listening to them.”

The first Session was marked by conservative milestones many Tennesseans have worked hard to see come to fruition. Among those items:

  • Tort Reform: This was a key centerpiece for the Governor’s jobs agenda and the General Assembly fashioned a new law that provides certainty in the business environment. With this confidence, more companies are better able to quantify the cost of doing business and can allocate more resources to provide jobs for Tennesseans.
  • Charter Schools: The Republican Majority lifted the cap on charter schools in Tennessee, ensuring that all children across the State will have access to a high quality education. Republican legislators, like Representative Elam, understand the key to long-term job growth in Tennessee is in the training of a strong workforce.
  • Collaborative Conferencing: In a major reform unlike any seen across the country, conservative legislators pushed through a new model for education that allows all teachers to have a voice when it comes to setting education policy and removed the barriers set up by the union so our hard-working teachers can be rewarded at a higher rate.
  • Ban on Income Tax: The process was started for a constitutional amendment in Tennessee that would forever prohibit an income tax from being levied on Tennesseans. The process for an amendment is long, but this Republican Majority is united in ensuring this common sense, pro-jobs measure becomes law.
  • Government Reform: In a move to increase transparency and efficiency for taxpayers, the House eliminated a number of duplicative committees that caused confusion for many citizens trying to follow legislation through the General Assembly. With this reform, bills will travel on a streamlined path that provides Tennesseans a format to voice their concerns on legislation. Additionally, the move saved Tennesseans nearly $1 million.
  • The State Budget: Republicans passed a fiscally conservative budget that reflects the principles of Tennesseans and meets the needs of our State. Overall, the Republican Majority reduced spending by $1.2 billion and rolled back a number of areas of duplicative government programs.

While much focus was given to these high-profile pieces of legislation, there are a number of other new laws that were ushered through to make government more responsive to Tennesseans and limit the influence of government regulation. Rep. Elam helped guide a number of these bills to final passage, a noteworthy achievement for a first-year legislator. Among the legislation she co-sponsored:

  • Voter Photo ID: This bill ensures integrity at the ballot box, something Tennesseans have long asked for. Essentially, voters are asked to present a valid photo ID to obtain a ballot. Parallel legislation passed to ensure citizens who may not have an ID can obtain one for free. These laws will protect Tennessee from having to deal with ballot box abuse and voter fraud.
  • Welfare Reform: This new law will prevent abuse of the Families First benefits program. It places common sense requirements on those utilizing taxpayer-funded benefits such as a prohibition against drug use or enrollment in a drug treatment program.
  • Voting Reform: This new law authorizes the coordinator of elections to compare the statewide voter registration database with the department of safety database, relevant federal and state agencies, and county records to ensure non-United States citizens are not registered to vote in this State.
  • Veterans’ Families: This legislation extends property tax relief to the surviving spouse of a soldier whose death results from being deployed, away from any home base of training and in support of combat operations. This was one way to honor the sacrifice our soldiers make in the line of duty.
  • Wilson County: Representative Elam guided a bill designating the bridge at State Route 109 and U.S. Highway 70 in Wilson County as the “Spc. Michael Lane Stansbery, Jr.” bridge to honor one of Wilson County’s fallen soldiers.

In reflecting on the reforms passed by the House of Representatives in her first term, Rep. Elam stated, “I tailored my personal record—the votes I took, the legislation I carried—to the wishes of my constituents. I heard them loud and clear last fall when they told me they wanted a government that is limited and respects our constitutional rights.” She continued, “Over the summer, I look forward to traveling around the 57th District and listening to the people once again. I am eager to get their feedback, bring it back to the Capitol next year, and work hard to make the Volunteer State an even better place to live, work, and raise a family.”

For a complete listing of Representative Elam’s legislative record, click here.

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NewsTracker

Flooded Building Forces Funding Board to Temporarily Forgo New Revenue Forecasts

Officials who decide how much the state should expect to collect in tax revenue each year put off making those predictions today, citing this week’s closure of Tennessee Tower for delaying the numbers.

Tennessee Funding Board members adjourned after a nearly 30-minute meeting Thursday without choosing a future meeting date to discuss the revenue estimates which play a key part in writing each year’s state budget.

A spokesman for Comptroller Justin Wilson, who chaired the board, said closures at Tennessee Tower have delayed staff from hashing out the differences in revenue estimates pitched by economists earlier this month. Those staff members are then to report recommendations to their respective board member to help them decide a reasonable range.

But with Tennessee Tower — where those staffers are stationed — evacuated Tuesday and closed Wednesday and Thursday, officials have been unable to crank out the revenue estimates, spokesman Blake Fontenay said.

With the approaching holidays coming up next week, Fontenay said he is unsure whether the state funding board would attempt to meet again later this month or wait until the new year to decide on a revenue range.

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Press Releases

TennCare Receives Federal Approval for Hospital ‘Assessment Fee’

Press Release from the State of Tennessee, Jul 01, 2010:

NASHVILLE – TennCare announced today that federal officials have approved Tennessee’s proposal to draw federal matching dollars in association with a new hospital assessment fee. As a result, TennCare will avoid benefit changes for enrollees and reductions in provider reimbursement rates that would have otherwise been required this year. The assessment fee was approved by the General Assembly in May.

“The approval of the hospital assessment fee provides the Bureau with the financial resources to continue providing needed benefits to our enrollees,” said TennCare Director Darin Gordon. “I am pleased that the Centers for Medicare and Medicaid Services (CMS) acted quickly to approve Tennessee’s request, which allows us to implement a fiscally sound budget plan, and supports the continued financial stability of our program. This fee will generate revenue that enables the state to avoid a series of difficult TennCare reductions that would otherwise have been necessary.”

The creation of the hospital assessment fee was a collaborative effort among several stakeholder groups, including health care-related professional organizations, providers, state officials and members of the General Assembly. Under the arrangement, private hospitals will pay a 3.52 percent fee on their annual coverage assessment base that will be matched by federal dollars. These funds will allow the state to maintain enrollee benefits at current levels and avoid across the board provider rate reductions during the FY 2010-2011 budget year.

With this approval, Tennessee joins more than 25 other states that have similar plans in place.

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Press Releases

Flood Relief Tax Break OK’d By Both Houses

Press Release from House Democratic Leader Rep. Gary Odom, D-Nashville; June 8, 2010:

Tax Rebates on Appliances, Building Materials, Furniture Approved by State Legislature

(Nashville) — A proposal to assist the recovery effort for Tennessee flood victims, introduced by House Democratic Leader Gary Odom, was approved by the legislature today.

Under House Bill 228, Tennesseans that qualify for Federal Emergency Management Agency assistance could buy appliances, building materials and furniture tax-free through September.

The measure passed without opposition today in the House after unanimously passing last week in the state Senate.

“We have seen so much devastation to homes throughout Tennessee, and many people remain displaced due to the May floods,” said Odom (D-Nashville). “It’s the least we can do to help our neighbors get back on their feet.”

The measure would have no effect on the budget, Odom said, because the sales tax collected on appliances, furnishings and building materials purchased by flood victims would never have been collected in the first place if not for the recent disaster.

The proposal provides for sales tax rebates on household appliances and furnishings priced at $3,200 per item or less, and building materials priced at $500 per item or less. Each affected household will be eligible for up to $2,500 in tax relief on applicable items. Also, a fine of $25,000 would be imposed on anyone who fraudulently applies for the assistance.

“We’re reminding everyone to save their receipts until the details are finalized,” Odom said. “Applications for these tax rebates will soon be available from the Department of Revenue.”

Categories
Press Releases

House Dems Denounce Senate GOP Budget Proposal

Press Release from House Democratic Caucus; May 12, 2010:

Leaders to Roll Out Alternative to Republican Budget

NASHVILLE (May 12) – House Democrats on Wednesday announced a push to stand up for teachers, farmers, working families, and other Tennesseans hurt by cuts proposed by the Republican-controlled Senate.

On Monday, the Republican majority in the Senate offered a budget amendment putting over $140 million in funding on the chopping block. These include $34 million in cuts to teacher pay, $6 million in cuts to agriculture investments in farmers, $100 million in cuts to state employees, and $3.5 million in cuts to public safety.

“The budget proposal offered by Senate Republicans is unacceptable and shows a fundamental lack of compassion for Tennesseans,” said House Democratic Leader Gary Odom (D-Nashville). “What Tennesseans need is a budget that will lead them to recovery, not ruin.”

Additional program cuts offered in the Senate Republican budget proposal include Tennessee’s Meth Grant Program, Internet Crime Grant Program, and Children’s Services.

“The Senate began work on this proposal this afternoon. We are going to counter that when they decide to send it to us,” said House Democratic Caucus Chairman Mike Turner (D-Old Hickory). “We have asked for weeks for the majority party plan. It is here and we disagree.”

House leadership Wednesday morning approved a preliminary counter budget to the Republican-backed proposal.

“We have already begun work on an alternative budget proposal,” said House Finance Chairman Craig Fitzhugh (D-Ripley). “We intend to fix as many of the Senate Republican cuts as we can because they hurt our teachers, farmers, state employees, and Tennessee families.”

Democrats now wait on the Senate to approve their budget proposal, at which time the House will take up the measure and conclude business for the year.

“After years of fiscally conservative budgeting and belt-tightening, we are in the position of using savings to help the people of our state,” said Speaker Emeritus Jimmy Naifeh (D-Covington).

Added Speaker Pro-Tem Lois DeBerry (D-Memphis), “Our rainy day fund is for a rainy day, and here in Tennessee it’s raining.”

Categories
Press Releases

Revenue Collections Up in April

State of Tennessee Press Release; May 12, 2010:

NASHVILLE – Tennessee revenue collections improved in April with a net positive growth of 2.23% over April collections one year ago. Finance and Administration Commissioner Dave Goetz reported today that overall April revenues were $1.243 billion, which is $43.4 million more than the state budgeted.

“April is the first positive sales tax growth month in almost two years – since May of 2008,” Goetz said. “Sales tax collections started their downward spiral starting in January of that year and, beginning with the month of June, recorded an unprecedented 22 consecutive months of negative collections.”

On an accrual basis, April is the ninth month in the 2009-2010 fiscal year.

The general fund was over collected by $51.4 million, and the four other funds were under collected by $8.0 million.

Sales tax collections were $9.7 million more than the budgeted estimate for April. The April growth rate was positive 5.62%. For nine months revenues are under collected by $201.8 million. The year-to-date growth rate for nine months was negative 4.11%.

Franchise and excise taxes combined were $47.6 million above the budgeted estimate of $312.9 million. For nine months revenues are over collected by $63.4 million.

Hall Income tax collections for April were $13.8 million less than the budgeted estimate. For nine months collections are $14.2 million less than the budgeted estimate. The growth rate for the nine month period was negative 22.42%.

Inheritance and estate tax collections were $1.4 million below the April estimate. For nine months collections are $9.4 million under the budgeted estimate.

Gasoline and motor fuel collections for April decreased by 2.80%. For nine months revenues are negative 0.15%, and $16.5 million below the budgeted estimate of $620.0 million.

Tobacco tax collections were $2.6 million under the budgeted estimate of $24.4 million. For nine months revenues are under collected in the amount of $1.0 million.

All other taxes for April, including the tobacco tax, were over collected by a net of $3.9 million.

Year-to-date collections for nine months were $200.7 million less than the budgeted estimate. The general fund was under collected by $153.6 million and the four other funds were under collected by $47.1 million.

The budgeted revenue estimates for 2009-2010 are based on the State Funding Board’s consensus recommendation adopted by the first session of the 106th General Assembly in May of 2009, and are available on the state’s Web site at http//www.tn.gov/finance/bud/budget.html.

The State Funding board met on December 18, 2009 and adopted mid-year revised revenue ranges for 2009-2010. The revised ranges reflect growth rates ranging from negative 1.50% to negative 0.25% in total taxes, and negative 2.35% to negative 0.85% in general fund taxes. Based on the consensus recommendation, the official budgeted estimates for 2009-2010 were revised in late December.

The revised estimates are reflected on pages A-70 and A-72 in the 2010-2011 Budget Document and assume an under collection in total taxes in the amount of $161.3 million, and an under collection of $153.2 million in the general fund.

The funding board met again in March of this year and adopted final revenue ranges for 2009-2010. The board’s consensus recommendation was to recognize lower growth rates than those adopted on December 18, 2009. The revised ranges reflect growth rates ranging from negative 1.77% to negative 1.29% for total taxes, and negative 2.31% to negative 1.78% in general fund taxes.

Based upon the funding board’s March recommendation the revised estimates for 2009-2010 now assume an under collection in total taxes in the amount of $258.9 million, and an under collection of $231.0 million in general fund taxes.