Sen. Frank Niceley has filed legislation that would use any new state revenue from out-of-state retailers to lower the current sales tax on groceries.
Niceley, R-Strawberry Plains, filed the bill (SB1424) Tuesday for consideration during the 2014 legislative session that begins in January. In an interview, Niceley said he adamantly opposes legislation pending in Congress that would authorize states to collect sales taxes from their citizens buying products over the internet or via mail order from companies located in other states.
But if the law is approved by Congress, the bill declares that the state finance commissioner will make an annual estimate of “surplus Internet tax revenue” and put that amount of money into the state budget for use in reducing the tax on grocery food.
Gov. Bill Haslam, House Speaker Beth Harwell and Senate Speaker Ron Ramsey all support the “Marketplace Fairness Act,” which passed the U.S. Senate last month but is stalled in the U.S. House, and have all indicated an interest in using some of the new revenue to reduce current state taxes.
NASHVILLE, Tenn. (AP) — The state House has unanimously approved Gov. Bill Haslam’s proposal to cut the state’s sales tax on groceries.
If approved by the Senate, the state’s tax on groceries would drop by a quarter percentage point to 5 percent. Lawmakers last year enacted a cut of the same amount.
The state’s sales tax on non-food items is 7 percent.
The tax reduction is projected to cost the state about $23 million in state revenue — or an average annual tax savings of about $3.56 for each Tennessean.
The companion bill is awaiting a vote in the Senate Finance Committee but is not expected to find much opposition.
Several proposed restrictions on the use of electronic benefit transfer cards have been dropped from proposed legislation so that it will conform with federal law, prompting complaints from some senators.
As originally filed, SB244 declared that the EBT cards, used as a debit card to provide welfare payments and food stamps, could not be used in businesses primarily selling tobacco products, tattoos or “psychic services.” Those references were deleted in an amendment presented to the Senate Health and Welfare Committee last week at the urging of state Department of Human Services officials.
Remaining are provisions covering liquor stores, “adult cabarets” and “casinos or gaming establishments.”
Nathalie Essex, assistant general counsel for the Department of Human Services, told the committee that a law enacted by Congress last year specifically authorizes states to impose the remaining restrictions, but declares states going beyond the authorization can lose federal funds. Legislative staff says the original version would “jeopardize” almost $10 million in federal money now sent to the state.
State health officials and members of the restaurant industry plan to ask the legislature to update Tennessee’s 1976 food safety law next year, reports The Tennessean. “Our rules are so old they don’t even address sushi,” said Hugh Atkins, who oversees restaurant inspections for the Tennessee Department of Health.
The Tennessee Food Safety Task Force first considered tweaking compliance rules but finally decided the law itself needed a complete overhaul.
The statute, more than three decades old, does not prohibit restaurant employees from fingering your food and lists temperature requirements for already-cooked dishes that can cause mashed potatoes to get crusty and meats to get leathery.
Task force members say the law wastes resources, falls short of federally recommended standards and can penalize restaurants that operate in older buildings. The temperature requirements for already-cooked foods have no safety benefit, Atkins said. Another requirement mandates that inspectors check a peanut and candy shop as often as a full-fledged restaurant, where the risk of a food-borne illness is much higher
David Fowler, president of the Family Action Council of Tennessee, worries that too many people are on food stamps, and they are becoming dependent on government handouts, reports The Tennessean. His solution, posted on his personal Facebook page, is to follow the advice of the National Park Service: “Do not feed the animals.”
“Their stated reason for the policy is because the animals will grow dependent on handouts and will not learn to take care of themselves,” Fowler wrote in the post. “This ends today’s lesson.”
Similar advice has been used by conservative politicians and pundits to criticize the federal food stamp program, known officially as the Supplemental Nutrition Assistance Program. Both the U.S. Senate and House of Representatives have proposed reducing funding for the program, which serves about 46 million Americans.
Fowler’s remarks angered Jennifer Bailey, an outreach specialist at Community Food Advocates in Nashville, a nonprofit that helps people get food stamps and works on local problems with hunger.
She said the “don’t feed the animals” comparison dehumanizes food stamp recipients.
“It removes the human face of hunger,” she said. “No human being is without dignity. That is something that should be remembered.”
…(Fowler) He said that he believes all people should be treated with dignity and that all people are made in God’s image.
“The obvious point of the post is that government can foster and create dependence on government,” he said. “Government creating human dependence on government demeans human dignity and is antithetical to human freedom government is intended to protect.”
He said he would be more careful about future Facebook posts.
News release from Senate Democratic Caucus:
NASHVILLE – Senate and House Democrats called on Governor Bill Haslam Wednesday to convene a special legislative session to freeze tuition rates and cut the food tax, using part of the $225 million in excess revenues the state has collected.
“Now is the time to provide tax relief for all Tennesseans, especially those who are training for new jobs that require a college degree,” said Senate Democratic Caucus Chairman Lowe Finney. “If we’re serious about growing jobs and putting people back to work, then we shouldn’t be raising fees on people who want to work.”
Caucus leaders calculated that, based on numbers provided by the Tennessee Board of Regents and the University of Tennessee, $78 million of the excess revenues would cover all proposed tuition increases at state colleges and universities. Democrats made the announcement as UT trustees met to discuss an average 6 percent tuition increase.
The Board of Regents, which oversees six state universities as well as community colleges and technology centers, proposed similar tuition increases last week.
“It is wrong to tax people who are going into debt to improve their lives,” said Senate Democratic Leader Jim Kyle. “A tuition increase is simply a tax on students. The money is there. The question is whether the political courage on the other side is also there.”
Democrats also pushed for an additional 1 percent decrease to the sales tax on groceries, which would provide $85 million in tax relief for all Tennesseans. Lawmakers reduced the sales tax by .25 percent during the regular session, meaning Tennesseans would save only 25 cents per $100 of groceries.
“We can provide Tennesseans four times the amount of tax relief in a matter of days,” said Senator Tim Barnes of Clarksville. “It would mean a lot to people in my district who are barely making ends meet as it is.”
The remaining $62 million in excess revenues would go into state reserves.
“This is about providing real results to every Tennessean and telling college students of all ages that we support them,” Finney said. “That’s the message that should be coming from every lawmaker’s office, regardless of political party.”
Note: Asked for comment on the Democrats’ proposal, Haslam spokesman David Smith emailed this: We want to be sure we have a complete picture of what our budget commitments will look like before we interrupt the budget process and start spending funds in an ad hoc way. There are still unknown expenses out there that a comprehensive budgeting process accounts for – such as TennCare inflation or fully funding the BEP. Also, providers have been saying they can’t pay the hospital assessment fee forever. Regarding higher education, the governor has said and continues to believe we need to focus on higher education in Tennessee, and examining the cost structure is certainly part of that process. That shouldn’t be done from a quick-fix perspective.
-The operating budget for state higher education was not reduced in the upcoming fiscal year for the first time in recent memory
-the budget includes $342.6 million in campus improvements and maintenance
News release from Senate Minority Leader Jim Kyle:
NASHVILLE – Senate Democratic Leader Jim Kyle called on Governor Bill Haslam and lawmakers to introduce larger cuts to the food tax and to freeze college tuition rates amidst news that the state government has nearly $225 million in excess funds.
“The Governor has said he believes we should provide the best services at the lowest cost possible,” Kyle said. “It’s time to take out the scissors and give the people of Tennessee new, lower prices on food and education.”
Lawmakers this year repealed the state’s gift and inheritance taxes, saving some of the wealthiest Tennesseans millions in current and future taxes, while approving a .25 percent decrease in the food tax – meaning middle-class Tennesseans will save only 25 cents per $100 of groceries.
Kyle also encouraged Haslam and higher education leaders to hold the line on college tuition rates. The same week the excess revenues were announced, state community colleges and universities proposed tuition increases ranging from 4 to 7 percent.
“We’re asking Tennesseans to pay more for college while saying that we have all this extra money,” Kyle said. “Something doesn’t add up.”
Note: See also Rick Locker’s write-up.
News release from House Republican Caucus:
NASHVILLE, Tenn.–The pocketbooks of all Tennesseans are getting help from the Legislature with the passage of two major tax cuts.
The House of Representatives today overwhelmingly approved the repeal of the death tax and the reduction of the food tax on two separate votes. Both bills have long been a major priority for many Members of the House Republican Caucus who believe the bills will help taxpayers keep more of their hard-earned money and place Tennessee on better economic footing.
“This is a landmark moment for Tennesseans,” stated House Speaker Beth Harwell (R–Nashville). “We believe, when government revenues are higher, that money doesn’t belong to the State but to taxpayers and should be returned to them immediately. Our Republican Majority was placed here to balance the budget, cut wasteful spending, and lower taxes. Today we carried through on that promise.”
Representative Charles Sargent (R–Franklin), who guided the death tax repeal to full House passage, remarked, “Today is an exciting day. We looked at the numbers, rolled our sleeves up, and worked with Governor Haslam to come up with two bills that will really benefit all Tennesseans. The repeal of the death tax is especially noteworthy because it will help convince the job creators in our State to remain here and help grow our economy. This doesn’t benefit one group; it benefits any Tennessean who is concerned about job growth.”
House Bill 3760, the death tax repeal, phases out the death tax over the next four years, to a complete repeal by 2016. House Bill 3761, the food tax cut, lowers the sales tax rate on food from the current 5.5% to 5.25%, the steepest reduction in many years.
The food tax cut was the responsibility of Representative David Alexander (R–Winchester). Following the final vote on the bill Alexander stated, “This wasn’t a partisan move, it was a move to help every Tennessean. The Governor asked to work with us on lowering the food tax and this is the product of that hard work. It’s something we all can be proud of.”
House Majority Leader Gerald McCormick (R–Chattanooga) added, “It has long been a principle that Republicans believe limited government is best. You do that by cutting taxes and ensuring Tennesseans keep more of the money they earn. In turn they will invest that money, the economy will grow, and new career opportunities will emerge.”
“These tax cuts are proof of our motto: It matters who governs,” concluded Representative Debra Maggart (R–Hendersonville) who serves as the Republican Caucus Chairwoman. “A recent study shows a repeal of the death tax ten years ago would have grown our economy an additional 14%. While the previous generation of leadership failed to take action, this generation of Republican leadership is committed to charting a new path that creates jobs and limits government.”
The bills are now sent to the Senate for action which is expected to come in the next week.
By Erik Schelzig, Associated Press
NASHVILLE, Tenn. — The House voted on Thursday to begin phasing out Tennessee’s inheritance tax and to lower the state’s sales tax on groceries.
The chamber voted 88-8 on the estate tax measure, and 96-0 to cut the food tax from 5.5 percent to 5.25 percent.
Republicans hailed the estate tax cut as a way to keep retirees from moving out of state, while Democrats argued that the tax cut on groceries affects a far larger number of people. Both measures were part of Republican Gov. Bill Haslam’s legislative agenda this year.
By Lucas Johnson, Associated Press
NASHVILLE, Tenn. — The Republican sponsor of a proposal to reduce the sales tax on groceries in Tennessee said Wednesday he’s open to working with Democrats who have a similar measure if it would help the legislation’s passage.
The bill by Rep. Glen Casada of Franklin was placed behind the budget in the House Finance Subcommittee on Wednesday. It will be revisited if any money is left after the state’s budget is set.
Republican Gov. Bill Haslam has included $2 million for lawmakers to appropriate on items not in his agenda, which means many proposals may not get funded.
Casada’s legislation would reduce the sales tax from 5.5 percent to 5 percent, while the Democrats have a plan that would drop it a half-cent more.
Haslam’s budget contains a proposal to reduce the sales tax to 5.3 percent. Casada said he applauds the governor’s effort, but would like to see the tax reduced further. He estimates his proposal would cost $42 million.