Budget not pretty but it saves state
Miraculously, state lawmakers passed a new budget Wednesday. Just as unbelievable is they managed to pass a budget which upset almost everybody.
Because legislators are balancing the budget mainly by adding 1 cent to the state sales tax, tax reform advocates did not get their wish.
Because legislators passed a budget which includes $933 million in new revenue, the anti-tax, control-spending-at-all-cost camp is none too pleased either.
Our supposed budget battle has been won, but where is the victor. Tennesseans are still stuck with paying more in taxes. Only now we have to rely on the risky sales tax and hope economic estimates are accurate.
When dealing with the sales tax, there is always room for considerable fluctuation. That’s part of the reason the state was so strapped for cash with this year’s budget. Lawmakers overestimated the money the state would collect in sales tax. Thus when we were attacked by terrorists and the economy took a dive, Tennessee was dragged into deep water along with it.
Now with one of the highest sales tax rates in the nation – and the emergence of e-commerce stealing precious sales tax dollars – Tennessee lawmakers will soon have unfinished business to handle.
The full 1 cent increase may be enough to last Tennessee more than one year. If sales tax projections are close to actual collections, that would seem to be the case.
But there is no denying, from anyone involved, that this is only a temporary solution. Changing the state’s tax structure to take such a burden off the sales tax is the ultimate goal. And, eventually, that goal will be realized.
As for now, we can take solace in the fact lawmakers at least did something. The Standard was one of the many newspapers which cried for our state leaders to adequately fund the budget so state services would not have to be slashed.
We saw a sneak peak of what shutting down services would be like for three days earlier this week. And the idea of not have a health department or a driver’s license center was not too appealing. The thought of not having a facility where adults could take adult education classes was repulsive.
No one likes the sales tax. And the Standard certainly did not endorse raising the sales tax.
But we did firmly stand behind doing something and legislators did just that. It’s not a best-case scenario, but it will keep Tennessee afloat.