Let’s not convict righteous and guilty
After suffering through labor pains the past six months, the 102nd Tennessee General Assembly belatedly gave birth last week to a state revenue plan and budget. It’s not pretty, and it bears many of the features a lot of people don’t like.
This baby is not going to win any beauty contests, but it does get state government back to work and allows Tennessee cities and counties to plan their local budgets, free of the threat of teacher layoffs and drastic hikes in property taxes forced on them by the legislature’s inaction.
As the state revenue impasse dragged on, Tennesseans became increasingly frustrated and incensed at the lawmakers and their appalling irresponsibility. Many legislators had vowed not to vote for an income tax or support a tax increase of any kind. Unwisely, and perhaps unethically, that kind of cheap, manipulative politicking put the future of the state in peril.
The corrosive political atmosphere at the state Capitol was made worse by Nashville talk-radio hosts who whipped up anti-tax fervor by playing on the emotions of people who had the free time to parade around the Hill with their protest signs and blaring car horns. These radio personalities, innocent of any substantive knowledge of public policy or government, probably did manage to boost their Arbitron ratings, but they also contributed to Tennessee’s fiscal chaos and loss of reputation.
To their great credit, a sufficient number of lawmakers put principle above politics and voted Wednesday to support a compromise plan that would raise $933 million in taxes, the largest in the state’s history. The greatest portion ($600 million) will come from a 1-cent sales tax hike on purchases except for food. The excise tax on corporate profits will go from 6 percent to 6.5 percent, and the local gross receipts levy on businesses will jump 50 per cent, bringing in another $73 million.
Smokers will pay more to light up, with the state tax going from 13 cents to 20 cents a pack, and the wholesale tax on beer, wine and spirits will rise 10 percent. Altogether, this added “sin tax” will garner some $40 million. Vending machine sales will be taxed, fetching another $16 million, according to state projections.
Critics, and especially those who fought the losing battle for a personal income tax, cite the inherent, unavoidable unfairness of the sales tax — any sales tax. The Tennessean (July 5) cites a University of Tennessee Center for Business and Economic Research study showing that a retired couple with a total income of $15,000 will see their sales tax bill jump $101.
On the other end of the scale, a Tennessee couple making $350,000 a year — 23 times as much income as our first household — will be taxed an extra $949 under the new plan. That’s a little more than nine times the hike experienced by the first couple.
Another negative consequence of riding the sales tax to nearly the highest level in the nation is the additional incentive for Tennessee shoppers to go to the Internet tax-haven, bypassing the mom-and-pop stores and the malls that provide employment to our citizens.
But with all its unbecoming features, the plan crafted by our own state Sen. Jerry Cooper, and sponsored in the House of Representatives by Charles Curtiss of Sparta, saves us from a much worse fate, a continuing shutdown of government and long-lasting damage to Tennessee’s prestige and attractiveness as a home for new business and industry.
Warren countians and our neighbors in the 14th Senate district and 43rd House district can take pride in their delegates to the General Assembly. Both Cooper and Curtiss, along with those who voted with them in the respective chambers, have endured much criticism – and in some instances crude hostility – from constituents who have different views on the fiscal crisis and revenue options. But the fact remains these men stepped up to the plate, bringing leadership and moral authority into a situation where those virtues seemed to be sadly absent.
(Guest columnist Bill Zechman is co-host of Viewpoints, the View from Here on WCPI, 91.3 FM.)