Bredesen must pay taxes on salary he doesn’t keep

Bredesen declared after taking office that he would not accept his $85,000 salary as the state faced major budget cuts. He is a multimillionaire from past business ventures.

The federal government, it turns out, isn’t so generous.

The state paid $6,000 in Social Security and Medicare taxes on Bredesen’s behalf for the 2003 tax year, a spokeswoman said.

“Obviously, the governor’s intent was to give back his entire salary to the state, but the way the law is structured, Uncle Sam always gets his due,” said Lydia Lenker, press secretary to the governor.

Part of the problem is that it is technically illegal for the governor to turn down his salary, according to research by Bob Cooper, the governor’s legal counsel.

Instead the governor in effect does have to take his salary and then return it to the state.

Under federal tax rules, that triggers withholding of Social Security and Medicare taxes, which the state then pays to the federal government, according to Cooper’s research.

Lenker said the 2003 withholding totaled $5,915.29. The federal government keeps the money.

A move afoot in the Legislature would significantly increase the salary Bredesen does not take. A pending bill would raise the governor’s salary to the same level as that of a state Supreme Court justice, about $126,000 starting after the next gubernatorial election in 2006.

The salaries of state judges, including Supreme Court justices, are adjusted upward each year based on increases in the cost of living.

The measure has cleared the committee system by unanimous votes in the Senate and awaits a floor vote. The House version awaits subcommittee action.

Tennessee’s gubernatorial salary is lower than in all but seven other states and U.S. territories, according to the Council of State Governments.

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Information from: The Knoxville News Sentinel, http://www.knoxnews.com