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From the Hill: Gov. Bredesen floats tax increase proposal to balance state budget

By State Rep. Matthew Hill
Some House leadership members last week denounced a tax increase proposal floated by Gov. Phil Bredesen as a way to balance the budget. The administration proposed an additional $85 million in tax increases by increasing the sales tax on single article sales.
Bredesen and his senior staff outlined a plan to remove the sales tax cap on single article sales.
At present, the value of individual items over $3,200 are taxed at seven percent. The governor wants to increase this to 9.75 percent.
The leaders expressed their disappointment in the Governor for showing what they called “blatant disregard for the challenges small business owners and average Tennesseans face,” and added that small businesses would be the driving force behind an economic recovery.
The $85 million tax increase would be in addition to $50 million the administration has called for by increasing taxes on cable television, cable television boxes, business telephone services, and free hotel breakfasts. In total, Bredesen has proposed over $130 million in new taxes this year alone.
The Tenn Care Oversight Committee heard an update regarding the Long-Term Care and Community Choices Act of 2008, a proposal that overhauled the state’s previously fragmented long-term care system. The plan aimed to increase options and choices for those who needed long-term care support, expand access, and better utilize existing funding.
The plan was designed to promote independence, choice, dignity, and quality of life for the elderly and/or people with physical disabilities who need long-term care support and services from the state’s TennCare program. The legislation included consumer-directed options that offered more choices regarding the kinds of long-term care services people need, where they are provided, and who will deliver them, with appropriate mechanisms to ensure accountability for taxpayer funds. In 2008, 98 percent of all long term care dollars went to nursing home care. Lawmakers anticipated saving money by moving funds to home and community-based care for those who were able to live at home with some assistance.
The committee heard from Pattie Killingsworth, Chief of Long-Term Care. Killingsworth reported that TennCare CHOICES, the long-term care system created by the legislation, was successfully implemented in Middle Tennessee in March of this year. The transition was seamless, 624 enrollees were transitioned to the new program.
Even more Tennesseans are taking advantage of the home and community based services since March, including about 450 brand new enrollees. Killingsworth reported the department is currently working on implementing CHOICES in East and West Tennessee.
The State of Tennessee, in conjunction with the Tennessee Valley Authority, will begin offering rebates to Tennesseans who replace old appliances with Energy Star® qualified ones. Portions of the rebate funding were made available through the American Recovery and Reinvestment Act. The total funding for the rebate program is just over $5.9 million, and rebates will be granted until the funds are depleted.
Rebates of $250 will be available for central air conditioners, $40 for room air conditioners, and $250 for heat pumps. Because there are certain specifications that the appliances must meet in order to be eligible in addition to being Energy Star®, consumers are encouraged to check the requirements before purchasing.
The Tennessee Department of Economic and Community Development reports that the estimated energy savings for delivery and installation of qualified heating and cooling products statewide will be approximately 16 million kilowatt hours per year.
A reduction in energy use of that size translates to a yearly savings of almost $1.4 million in energy costs for Tennesseans and reduces the amount of carbon dioxide emitted into the atmosphere by 32 million pounds annually.
The Transportation Committee approved House Bill 2544 last week after a long debate.
The bill creates the offense of “super speeding” when a driver speeds at 75 miles per hour or more on any two-lane highway or 85 miles per hour or more on any public highway or interstate. The penalty for super speeding would be a Class B misdemeanor, punishable by a $200 fine.
The bill will be heard next in the Budget Subcommittee. Instead of costing the state money, the legislation actually has the potential to bring in $3.7 million. Under the bill, a portion of the funds would be directed to the state’s Trauma Center System established in 2007.