May 18, 2007

Just Say No

The Nashville City Paper is reporting that Republicans in the state Senate may have some backbone - they're saying the only way they will compromise and support some portion of Gov. Phil Bredesen's cigarette tax increase is if some "tax relief" is given in the form of a sales tax holiday on food.

Since February, Bredesen's 40-cent cigarette tax hike proposal has met stiff resistance from Republicans in the state Senate, who say they can vote for a cigarette tax hike, just not 40 cents. Wednesday, to try and break a "logjam" with Senate Republicans after discussions broke down earlier this week, Bredesen said he is now proposing phasing in his 40-cent cigarette tax increase over a two-year period - 25 cents in the first year and 15 cents in the second year.

Bredesen didn't propose any sales tax on food cut.

Senate Speaker and Lt. Gov. Ron Ramsey (R-Blountville) said Thursday that he could support some level of a cigarette tax hike if the GOP could pass its sales tax on food tax cut plan and not fund any "pork" projects.

What's crazy is that Tennessee is piling up huge revenue surpluses and could easily afford to both fully fund the governor's requested budget and eliminate the state sales tax on food entirely without raising taxes, but Bredesen and his Democratic allies instead are hell-bent to raise taxes, fund a growing recurring expense (education) with a shrinking revenue source (cigarette tax), setting the state up to need another tax increase in a few years, while sticking this year's surplus in the bank so they can spend it next year or the year after that.

The Republicans in the state Senate are demanding too a small thing - a temporary food tax "holiday" is small thinking when there's enough surplus revenue to demand a budget with no new taxes.