NASHVILLE, Tenn. (AP) — The Senate Finance Committee has advanced a proposed constitutional amendment to explicitly ban a state income tax to a full floor vote.
The panel voted 9-1 on Tuesday to advance the measure sponsored by Republican Sen. Brian Kelsey of Germantown that would also ban a state or local payroll tax.
The measure would need to receive two-thirds votes in both chambers of the General Assembly before it could go before the voters in 2014.
Opponents argue the measure is unnecessary amid solid opposition to an income tax among Republican lawmakers who already hold supermajorities in both the House and Senate.
The lone vote against the measure came from Democratic Sen. Douglas Henry of Nashville, an income tax opponent who said the measure would tie lawmakers hands in tough economic times.
Part of the “fiscal cliff” tax bill approved by Congress extended the ability of Tennesseans to deduct sales tax payments from their federal income taxes, reports the Commercial Appeal. But that didn’t stop Rep. Marsha Blackburn, a longtime advocate fo sales tax deductability, from joining other Tennessee Republican congressmen in voting no. Back when she was a freshman, U.S. Rep. Marsha Blackburn worked with then Senate Majority Leader Bill Frist of Tennessee to permit Tennesseans and other filers in states without income taxes to deduct sales taxes on federal returns. As recently as Nov. 16, Sen. Lamar Alexander, R-Tenn., was calling Blackburn “the leader in restoring the deduction in 2004 and she’s the leader now in an effort to ensure it is extended again.”
But on New Year’s Day, when the extension was made part of the deal to avert the fiscal cliff, Blackburn and every member of the Tennessee congressional delegation except U.S. Rep. Steve Cohen, D-Tenn., voted against it.
Alexander and Sen. Bob Corker, R-Tenn., also voted for the deal that included extending the deduction, which can be used by the roughly 25 percent of Tennesseans who itemize their deductions rather than taking the standard deduction.
Asked to explain her vote, Blackburn said in a statement, “Restoring sales tax deductions was one of the first pieces of legislation I helped pass when I came to Congress. As is the case with most pieces of legislation we debate, there were obviously provisions in the bill that I was happy to see included such as the extension of the sales tax deduction, which is very important for my constituents in Tennessee.
“However, as a total package, the Senate bill was a bad deal for the American people. It only makes our situation worse. I could not support a proposal that imposes job-killing tax hikes, does nothing to restrain spending, adds to our annual deficit, and increases our debt by nearly $4 trillion over the next decade.”
State House candidate Flo Matheson says she “almost fainted” when first hearing that the Tennessee Republican Party had accused her of supporting a state income tax, but now she believes the GOP news release — though wrong — is helping her campaign.
The state GOP earlier this week sent media a news release on Democrat Matheson’s remarks at a candidate forum with her opponent, state Rep. Cameron Sexton, R-Crossville.
It quotes state Republican Chairman Chris Devaney as saying the comments left him wondering whether the state Democratic Party has encouraged its candidates to “adopt this extremist, big government agenda which would amount to some of the largest tax increases in our state’s history.”
The release was accompanied by an audio recording that, as first reported by The City Paper, stops just after Matheson says she supports “a progressive income tax.”
Matheson said her next words were to say she was referring to the federal income tax and made the point that, though state legislators have no impact on federal taxes, voters should be wary of candidates who want to favor the “extremely wealthy” in tax policy.
The City Paper reports that an audio tape of Democratic House candidate Flo Matheson’s remarks at a forum were edited – or at least cut short – so she would seem to be supporting a state income tax. Actually, Matheson says she was not – she was supporting the federal “progressive income tax.”
The Matheson comments formed the basis of a state Republican party news release. (Previous post HERE.)
From Stephen Hale’s story:
TNGOP Executive Director Adam Nickas told The City Paper that the state party did not cut or edit “in any way” the audio provided to them, but would not reveal where the audio came from.
The release, which does not identify Matheson by name, included an eight-minute audio recording of some of Matheson’s remarks at the Monday morning candidates forum in the East Tennessee district. In the tape, Matheson can be heard expressing support for a living wage, and opposition to the repeal of the estate tax. Her remarks about an income tax, however, begin with less than 10 seconds left in the tape and are quickly cut off.
“Also, I support a progressive income tax, which would mean, you know, more taxes on the wealthy. I do know that fe… ,” she can be heard saying, at which point the tape ends.
Forum organizers told The City Paper they did not have an official video or audio recording of the event. But a copy of Matheson’s prepared remarks, provided by Matheson, seems to provide the rest of the sentence cut off by the TNGOP audio.
“Support a progressive income tax,” her notes read. “Federal Income tax is not an issue that state representatives can resolve, but I can urge voters to remove legislators who work for the greedy super-rich, not for the middle class.”
Her opponent, Sexton, said he understood her comments differently.
“That’s not how I understood it,” he told The City Paper Wednesday morning, “because even later in the forum, I told her when we had a question, ‘You know, I’m not like Flo, I’m not in favor of a state income tax.’ She never came back and denied that she was.”
Sexton said he didn’t have anything to do with the tape.
“Maybe she went back now and she realizes, maybe she wasn’t clear enough and she wants to restate for the record, which is fine, if she wants to come out against a state income tax. But you still have the main issue that she wants a state living wage.”
Nickas said he believed the audio provided in the TNGOP release included “the majority of her comments.”
“I think it’s pretty clear that she was talking about state issues,” he said. “I know that she and probably the Democrat party are probably in damage control mode right now, trying to spin it, but I think it’s pretty simple what she said.”
News release from Tennessee Republican party:
NASHVILLE, TN – At a candidate forum on Monday, the Democrat nominee for State House in District 25 promoted the implementation of a progressive income tax and a living wage, and keeping in place the death tax.
The comments came from the Democrat nominee in District 25 at a Pleasant Hill, TN forum. (Note: She is Flo Matheson, who is opposing Rep. Cameron Sexton, R-Crossville.)
“Tennesseans have to wonder if the Tennessee Democrat Party has encouraged their candidates to adopt this extremist, big government agenda which would amount to some of the largest tax increases in our state’s history,” said Tennessee Republican Party Chairman Chris Devaney.
“While many Democrats in our state desperately attempt to disassociate themselves with the failed economic policies of Barack Obama, it appears the President’s big government philosophy has taken solid root within the Tennessee Democrat platform. Are these the far-left ideological policies that Democrat House Leader Craig Fitzhugh wants his party’s nominees to unite around? Will Craig Fitzhugh denounce this radical legislative agenda or will he remain silent?
“Tennessee Republicans, working with Governor Haslam, have made tremendous progress in reducing the size of government by eliminating unnecessary regulations and enacting more tax cuts in this year’s budget than any other in our state’s history. That’s the path we need to stay on; not return to the path of more taxes, more debt, and massive government,” concluded Devaney.
Audio of the comments made by the Democrat nominee in State House District 25 can be heard HERE.
— Email in response to the release from Brandon Puttbrese, communications director of Tennessee Democratic party:
As we all know, the most recent state income tax plan was carried by a Republican governor of this great state.
This is another pathetic attempt by Republicans to hide the fact that their top-down tax policies reward the wealthiest Tennesseans and shift a greater tax burden onto working and middle class families.
Their policies are a global race to the bottom for American workers. In Tennessee, pay is down and poverty is up. Confidence in the special interest-dominated legislature is falling and the unemployment rate is on the rise. That’s the GOP’s legacy.
And while Ms. Matheson’s ideas might not be a perfect solution to increase pay for working people, Tennesseans are not going to fault her for having a discussion about ideas that reward responsible, hard working families.
We’ve seen too much focus on top-down, multi-million dollar tax giveaways for the wealthy and well connected. It’s time middle class Tennesseans got a fair hearing in the legislature, too.
CHATTANOOGA, Tenn. (AP) — TennCare officials say it is getting more difficult for low-income seniors to qualify for nursing homes and other services.
Officials say under old rules, elderly people could qualify for up to $55,000 to pay for a nursing home, adult day care or assisted living if they weren’t able to groom themselves. Under rules that began on July 1, TennCare will take an overall assessment of a person’s need before that level of funding is allocated. Being able to groom oneself is just one measure that TennCare uses to assess a person’s ability to handle activities of daily life.
TennCare spokeswoman Kelly Gunderson said those who don’t qualify for the maximum assessment can still get up to $15,000 annually. She said those who think they need more can ask their health care coordinator for another assessment.
The change has led to concerns.
Serenity Adult Day Care Center owner DeNessa Cartwright told the Chattanooga Times Free Press (http://bit.ly/Oj5nnV) that $15,000 might not be enough for the level of care some seniors require.
“A person can be lacking in only one ADL, but that one ADL could be so major that you still have many needs and need maximum funding,” said Cartwright.
Gunderson said changing the rules will save the agency $47 million a year and it will be able to redistribute money to serve more people.
“This is a critical next step in helping the state continue to expand access to home-based care, delay and/or prevent the need for nursing facility placement, when appropriate, and rebalance the state’s long-term care system for the elderly and adults with physical disabilities,” Gunderson said.
But Tennessee Justice Center Executive Director Gordon Bonnyman said he is concerned the state will be unable to provide needed services.
“It just defies common sense that you’re going to actually be able to maintain everybody, meet those needs and yet take $47 million out of the budget once used to pay for those services,” Bonnyman said
Lt. Gov. Ron Ramsey told a Realtors group Monday of his plans to eliminate the state’s Hall Income Tax on investment income for those 65 years old and older, reports Hank Hayes. “If you think we’re retirement-friendly now, wait until we do that,” Ramsey, R-Blountville, said of killing the Hall Income Tax at the annual Northeast Tennessee Association of Realtors (NETAR) legislative luncheon.
The Hall Income Tax, enacted in 1929, has exemptions for people over 65 with total income less than $16,200 for a single filer or $27,000 for a joint filer.
Ramsey, who owns and operates a real estate and auction company, said the 6 percent tax “shocks” retirees when they move to Tennessee.
“When they start drawing out their 401(k)s, they have to pay income tax on that. That’s wrong,” Ramsey said. “We want people to save for their retirement, put some money back … be responsible and have this nest egg built up so they don’t have to live on Social Security.
“We want more people to retire here and buy a house. I’m a Realtor. I get this. … You would be shocked at the number of people who live in Tennessee but they reside in Florida. Now those people can move back.”
The gubernatorial claim, made in a speech last week to the Carter County Republican Party: “In Tennessee – personal income is growing faster in Tennessee on average than any other state in the country.”
Which just isn’t so, reports Politifact Tennessee. Read the report HERE.
Gov. Bill Haslam gave an upbeat message to the Carter County Republican Party during its Reagan Day Dinner on Friday, reports the Johnson City Press. Haslam spoke about the progress the state has made during the past two years under the leadership not only of a Republican governor but also a Republican-led House and a Republican-led Senate. Lt. Gov. Ron Ramsey, the leader of the Senate, was in the audience.
…He said that as a result of that leadership, personal income is growing faster in Tennessee than in any other state.
The state unemployment rate was more than 10 percent during the 2010 campaign. He said today there are more Tennesseans working than at any time in the past four years and the unemployment rate has dropped below the national average.
….Haslam told his Republican audience that the 2012 national election may very well be the most important in many years.
He said the reason for its importance is the two candidates offer a clear choice on which direction the nation will head.
He said the choices are whether we will “totally rely on the government for all our problems or whether we really believe in the free enterprise system … whether we will choose the path of Europe and more debt or whether we will spend less than we bring in.”
Haslam said he though it was going to be a very close election.
The Tennessee Legislature won’t pass much in the way of tax cuts beyond what Gov. Bill Haslam is requesting for 2012, says House Speaker Beth Harwell. That means a reduction in the Hall tax on income from stocks and dividends — a tax Lt. Gov. Ron Ramsey wants to see slashed this session — isn’t likely in the cards, she said.
More from TNReport:
“I do not think so this year,” Harwell said Thursday when asked if the Hall tax will make it to a floor vote. “We did, of course, take a bite out of that last year. But I think our focus now is going to be on the reduction of the death tax, elimination of the gift tax and a reduction of the food tax.”
Lawmakers have yet to take up a bundle of bills reducing taxes on Tennesseans as lawmakers push those measures toward the end of the spring legislative session, likely after lawmakers have a clearer picture of the state’s budget.