April 20, 2004

Bredesen/Naifeh Stealth Tax Increase UPDATE

In the Tennessee legislature, House Bill 3529, the stealth tax increase on Tennessee businesses backed by Gov. Phil Bredesen, House Speaker Jimmy Naifeh and House Majority Leader Kim McMillan, all Democrats who promised to balance this year's budget without increased taxes, is the agenda for today's meeting of the House Finance Committee. The Senate version of the bill, SB3427, will also be heard in the Senate Finance Committee today.

This tax increase is fiscally irresponsible, and comes at a time when the state is piling up a large revenue surplus. For more, go here and follow the links.

If you are interested in helping defeat this tax increase on Tennessee businesses, you should contact the members of the House Finance Committee and the Senate Finance Committee to express your opposition to this fiscally irresponsible tax increase and unnecessary tax increase. (Those links take you to the committee pages - where clicking each member's name brings up contact info including phone, fax, and email.) Here is the text of the email I sent to all members of both committees:

I am writing to urge you to vote no on House Bill 3529 and its Senate version, SB 3427, the provision to raise taxes on Tennessee businesses by decoupling the state's excise tax depreciation schedule.

Besides breaking a promise that many members, including the House Democratic Caucus and Speaker Naifeh - not to mention Gov. Bredesen - to balance the FY 2004-05 budget without increasing state taxes, this bill is fiscally irresponsible.

Here is why:

This bill would increase revenues for FY 2004-05 by $75 million, but it would be a one-time acceleration in revenues that would also result in future decreases in the revenue stream because the $75 million dollar acceleration in revenue is actually composed of funds that the state would have received over the next few years if the depreciation schedule was left as is. This change would give the state $75 million dollars to help balance this year's budget but would result in a revenue shortfall and budget deficits in the future.

Voting for HB 3529 or SB 3427 will increase the likelihood of revenue deficits in future years, making it fiscally irresponsible. You can read more about that here: http://billhobbs.com/hobbsonline/003640.html\

It also is NOT NECESSARY to grab the extra $75 million from future fiscal years. state is piling up a very large revenue surplus this year and FY 2004-05 revenues are likely to grow even more as the economic recovery gains strength and depth.

YOU DO NOT NEED TO ROB FROM THE FUTURE. Voting no on HB 3529 or SB 3427 is the fiscally responsible vote and you will be able to balance the FY 2004-05 budget without the extra money thanks to the surplus.

Bill Hobbs
Franklin, Tennessee
HobbsOnline
www.billhobbs.com