Gov. Bill Haslam said Thursday that if lawmakers want to abolish the state tax on income from stocks and bonds, they should say what programs they’ll cut to make up the $300 million loss in tax revenue.
Further from Richard Locker:
“I’ve always said it’s easy to say let’s do away with this. It’s a lot harder to say what are you going to do about that revenue going away,” he said.
State Sen. Brian Kelsey, R-Germantown, said last week he’ll try to repeal the income tax on stock dividends and certain interest income when the Legislature convenes in January. “This is a bad tax and it needs to go. It especially hurts our seniors and those who have saved for retirement,” he said.
Kelsey and others have filed bills for several years to repeal the “Hall income tax,” without success. He cited the $606 million in revenue above budgeted estimates that the state its ended fiscal year with on June 30 as a reason to abolish the tax now.
The income tax generated $303 million during the same fiscal year but only $189 million is retained by the state; the rest goes to local governments where the taxpayer resides. Kelsey’s bill doesn’t explicitly require it but he said the state should make up the revenue loss to local governments — effectively costing state government the full $303 million.
Haslam distinguished between “one-time money” like the budget surplus and recurring revenue from the Hall tax. “Those are two very different things. I certainly wouldn’t want to appropriate one-time money assuming it’s always going to be there,” he said.
The governor also said that the state has needs for the revenue, including education, TennCare, higher pay for teachers and correctional officers and more front-line children’s services workers.
“I’ve always said I don’t like the Hall tax either but if we’re going to do away with it, we have to figure out what we’re going to do with that revenue. … That’s part of the budget balancing thing that we have to do.”