Did they just say billion?When I saw the headline and read the projections in this morning's Knoxville News-Sentinel, even I could not believe my eyes. I had to read and then re-read the story to make sure that I got the total right. The Tennessee State Funding Board was told by economists' yesterday that Tennessee's total surplus will come to $1.3 billion dollars. I couldn't believe the total, $1,300,000,000-and some change (and no small chunk, either) on top of that. That is a lot of money, and the Governor's Finance Commissioner Dave Goetz is making the push to put all but $200 million of it in the "rainy day fund."
I am certainly not opposed to having a sizable State savings fund, and Tennessee has had the long-standing goal of having five percent of our general revenues set aside for a time when they may be needed in the future-that goal has now been achieved with room to spare. Now that we've gotten to this needed milestone as a State, Governor Bredesen and Commissioner Goetz are now telling us that we really need to set 11 percent of revenues aside. Of course if we do this, that leaves the overwhelming portion of this massive revenue "untouchable," and that gives the Governor an excuse to raise taxes.
Governor Bredesen (who was once seen as Presidential material by some) wants a 40-cent tobacco tax increase that he says will go to fund educational improvements and school construction. Keeping to the original five percent goal, the remaining surplus money could fund the Governor's education proposals on its own without any additional taxes, and we would still have almost half a billion dollars left over. At some point, you have to scratch your head and ask how much of the Governor's policy is aimed at fiscal responsibility, and how much is aimed at raising taxes for the sake of taking more of the people's money.
Even so, an increase in the "sin tax" on tobacco or even alcohol would be acceptable if it means that there will be a corresponding decrease in the grocery tax. You don't need a pack of Marlboro's, but your family may need a gallon of milk or a pound of cheese. Currently, groceries are taxed the same as non-essential items, a practice that Tennessee can afford to end. Now that we know just how high the surplus is, there is little excuse for the Governor not to be more amenable to this common-sense proposal-we know we have the funds to make it happen and improve our education system as well.
This can be a lesson to those elsewhere that a State can amass a sizable surplus to meet its financial needs without an income tax, as Tennessee has successfully done. Once a surplus of such massive proportions is reached, however, speaking of relieving the tax burden is not an unreasonable proposition in a State where revenue is raised via taxes that everyone must pay. When the State rakes in enough revenue to make that kind of surplus a reality, talking about relieving the tax burden on ordinary Tennesseans is not only reasonable, it is right. The Governor must be willing to give serious grocery tax breaks, or even eliminate the grocery tax altogether, and the General Assembly must hold his feet to the fire until he does so.
Labels: Tennessee politics