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« Ouch | Main | On Candidates' Blogs » January 17, 2004Tennessee Surplus Will Be SpentAs I mentioned here yesterday and The Tennessean reports today, Tennessee is piling up a surplus of tax revenue expected to reach at least $150 million this fiscal year. Unfortunately, instead of saving that money in the state's "rainy day" fund or rebating it to taxpayers, it appears the otherwise fiscally smart administration of Gov. Phil Bredesen is making plans to spend the surplus. Thanks to a recovering economy, the state is projecting that tax collections will exceed estimates by $150 million during this fiscal year, which ends June 30. Year-to-date collections for August through December are $82 million over estimates, with half of that attributed to larger-than-expected sales tax collections. Finance Commissioner Dave Goetz said yesterday the unanticipated money will go for one-time projects, not recurring expenses such as salary increases.That's the kind of fiscal management that gets states into trouble. The smart move is to save the money in the "rainy day" fund so you'll have it the next time the economy slows and tax revenue doesn't meet expectations. And if the state is going to do that, the least it could do is return the money to taxpayers. Not one dime of it is needed to balance this year's budget - it is excess taxation. With a Taxpayers Bill of Rights, the state would - after building a sensible reserve fund - return all future surplus revenue to taxpayers via a reduction in the tax rate or direct rebates. With a Taxpayers Bill of Rights, neither the governor nor the legislature could spend surplus revenue without submitting the proposed spending plan to voters in a referendum. Without a Taxpayers Bill of Rights, Tennesseans have no such protection against excessive spending and fiscally stupid management that spends surplus revenue rather than saving it for a rainy day. UPDATE: State Sen. Jim Bryson has put together a solid proposal for a Taxpayers Bill of Rights amendment to the state constitution. It's not exactly as I would have wrtten it, but it's very good. Click Here to see it, read the bill, and find out more. The higher Tennessee's tax surplus rises, the more I believe the people of Tennessee will like Bryson's proposed amendment. Posted in Tennessee Budget & Tax Policy
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Well, I hope that IF your governor does decide to spend the money, he will contain himself to one-time projects and NOT make Grey Davis's mistakes! You can see where that got California! Hmmm... maybe California needs a Taxpayer Bill of Rights for when WE once again have a surplus -- which will be in about 25 years at the rate we are going. Posted by: Heather at January 17, 2004 10:23 AMTennessee hasn't learned a thing from California's debacle, has it? Posted by: Kevin Baker at January 17, 2004 09:38 PMHeather -- I have a story from the Denver TV stations quoting Colorado Gov. Bill Owens' advice to Gov. Arnold that the only way he was going to get California's spending under control is to have a Taxpayer's Bill of Rights. Maybe you will get one someday! FYI -- I'm the sponsor for the Taxpayers Bill of Rights in TN. Posted by: Jim Bryson at January 19, 2004 08:47 AMThanks Bill for sticking with this like a bulldog. Conventional wisdom has had that in the absence of a threat of an income tax most Tennesseans would lose interest in the issue and no momentum for a TABOR could be sustained and grown. With evidence like what you are presenting that might change. THANKS Jim Bryson for having the guts to actually sponsor a TABOR bill. You have my vote! I blather on to anyone who will listen about this subject and the need for a TABOR. Posted by: Jody at January 19, 2004 09:34 AMPost a comment
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