Legislation allowing cigarette retailers to raise prices — by 32 cents per pack according to a legislative staff estimate — has cleared its first committee.
The bill by Rep. Matthew Hill, R-Jonesborough, deals with a current state law setting a minimum price for cigarettes. Hill told colleagues that has led to “large out-of-state cigarette manufacturers” requiring by contract that their products be sold at that price, costing retailers “hundreds of thousands if not millions of potential revenue” that could be realized by raising prices.
The Fiscal Review Committee staff calculated that the average price of a pack of cigarettes is currently about $5 in Tennessee and that the bill, if enacted, would let retailers charge an extra 32 cents per pack. It is further calculated that the higher price will drive down consumption so that the state loses about $1.4 million in annual revenue that it would otherwise receive from sales and tobacco taxes.
Because of complicated tax provisions interacting with the law on “state-shared revenue,” however, the Fiscal Review staff figures that local governments will actually receive more money if the law is changed to raise prices, even if cigarette sales drop as predicted.
Current law says retailers can sell cigarettes at no more than 8 percent above the price they pay to get them. The bill (HB644) would raise the ceiling to 15 percent above their cost. It is being pushed by lobbyists for convenience stores.
It was approved by the House Agriculture Committee last week and faces its first Senate committee vote this week.
NASHVILLE, Tenn. (AP) — Gov. Bill Haslam said Monday he wants to leave it up to local governments to decide whether to set their own wage requirements for contractors.
The Republican governor told reporters that he’s “not a fan of the living wage,” but that those decisions should be left up to counties and cities.
Haslam’s stance puts him at odds with some fellow Republicans in the Legislature.
Rep. Glen Casada of Franklin and Sen. Brian Kelsey of Germantown are sponsoring legislation seeking to ban higher wage requirements set by local governments and to repeal those standards where they have already been set in place.
“Local governments are unwittingly pricing certain employees out of jobs, especially minority teens, who do not yet have the skill set to demand high-wage, high-benefit jobs,” Kelsey said in a release announcing the bill last month.
Some Nashville officials are not happy with legislation proposed by Sen. Brian Kelsey and Rep. Glen Casada that would block cities and counties from enacting local ordinances that deal worker benefits provided by companies contracting with local governments, reports Michael Cass. “I continue to be amazed that the folks who are so often telling the federal government to get out of their business continue to want to create roadblocks for municipalities,” Councilwoman Megan Barry said.
Barry has worked to create a “living wage” for Metro employees, but she said she doesn’t have any plans to try to place similar requirements on other employers. (Memphis has a “living wage” ordinance that would apparently be impacted by the legislation. As enacted in 2007, it requires companies doing business with the city to pay $10 per hour with benefits or $12 an hour without benefits.)
Casada rejected the claims of Republican hypocrisy.
“We just want smaller government,” he said. “To have a big, overreaching local government would defeat the purpose.”
Through a spokeswoman, Kelsey referred questions to Casada. But he said in a news release announcing his proposal last month that the legislation would “open up job opportunities, especially for minority teens in Tennessee.”
Citing a study published in May by labor economists William Even and David Macpherson, Kelsey said increases in minimum wage requirements reduce employment rates for black male teenagers.
“Excessive regulations from local governments are unwittingly pricing certain employees out of jobs, especially minority teens, who do not yet have the skill set to demand high-wage, high-benefit jobs,” Kelsey said in the release.
News release from Senate Republican Caucus:
(NASHVILLE, TN) November 2, 2011 – Representative Glen Casada (R-College Grove) and State Senator Brian Kelsey (R-Germantown) today announced the introduction of a jobs bill designed to increase the number of jobs available to unemployed workers.
Senate Bill 2149 provides that no local government can impose on any business additional mandates regarding health insurance benefits, minimum wage requirements, or family leave requirements that deviate from those required by state law. The legislation is the fifth in a series of announcements by Kelsey in his “12 for ’12” initiative for the next legislative session, which is set to reconvene January 10, 2012.
“There is no doubt that this bill will open up job opportunities, especially for minority teens in Tennessee,” said Kelsey. “Excessive regulations from local governments are unwittingly pricing certain employees out of jobs, especially minority teens, who do not yet have the skill set to demand high-wage, high-benefit jobs.”
According to a study released this summer by the Chicago Urban League, the jobless rate of African American teens is a shocking 42 percent. Local government minimum wage regulations are a large contributor to that figure. Among black males in this group, each 10 percent increase in the minimum wage has decreased employment by 6.5 percent, according to a separate study released this summer by labor economists William Even of Miami University in Ohio and David Macpherson of Trinity University in Texas.
In addition to job growth, the bill aims to help small businesses who cannot afford additional burdens placed on them through local ordinances or resolutions. “This bill is modeled after the Interstate Commerce Clause which ensures that the flow of commerce is free from restraints imposed by various states,” said Representative Casada. “This legislation, likewise, would prevent counties in Tennessee from imposing additional intrastate requirements, so they cannot inhibit commerce by placing additional burdens on businesses.”
Businesses in Tennessee are already struggling in a very challenging economic environment. In order to grow jobs small business owners need protection from having to comply with additional burdens placed on them by yet another layer of government.
“Every time another burden is imposed on our small businesses, it costs jobs,” added Rep. Casada. “It also causes small businesses or their human resource departments to have to hire attorneys, an action which is very expensive.”
“Small businesses are the engine that drives economic growth and job creation. If we want our economy to improve, we must get government off the backs of small businesses, so they can do what they do best: grow jobs,” Senator Kelsey concluded.