Monday, May 07, 2007

Money money money...

The Tennessee General Assembly this week will get the official numbers on just how large this year's budget surplus will be. Some sources are saying 300 million, some sources 400 million, and at least one person I've spoken with over the last few weeks expects that it may be even higher than that. The State of Tennessee is already sitting on a surplus of nearly half-a-billion dollars from last year, so this year's tally could put the total combined surplus at nearly a billion dollars-for any State Government, that is a whopping total.

There are few who disagree that some of that money needs to go toward infrastructure improvements, especially Tennessee schools. When you are fortunate to have that kind of money just laying around-amounts that would make some of our friends in Northern States seethe with envy-there is little excuse not to use some of it for needful improvements long delayed by the irresponsibility of the Legislature in the days of the
Ned Ray McWherter and Don Sundquist administrations. Both McWherter (a Democrat) and Sundquist (a Republican and a far worse Governor) had much larger Democratic majorities in the General Assembly. Although Phil Bredesen is a Democrat, he came to power with Republican numbers dramatically increased in the General Assembly due to the Sundquist income tax debacle. In his second term, he has a de facto Republican Senate who chose a Republican Lieutenant Governor for him.

These political factors can be said to be part of the reason for the fiscal restraint we've seen that has led to the surplus. This restraint has led many people who might otherwise support Republicans to vote for Bredesen, believing that he is a Republican in Democrats' clothing.

Real liberals show themselves by not being able to avoid raising taxes even when it is not needed, and Bredesen (sure enough) put a 40-cent tobacco tax increase into his initial budget proposal, saying that the money would go to schools. Since the budget surplus is so high to begin with, many people on both sides of the aisle didn't understand why such a large tobacco tax increase was needed to fund education improvements when the State has such a large surplus that could fund these things on its own. The Governor bristled at the notion of tying these new tobacco tax revenues to a decrease in the grocery tax, or in providing any relief to working Tennesseans at the grocery checkout.

Now, with the numbers on just how high the surplus is about to be released, the Governor is changing his tune. Now he says he would settle for a tobacco tax increase fazed in over several years. Rumors abound that he may even be willing to a lower tobacco tax hike, and good for Lt. Governor Ron Ramsey-he's sticking to his guns in saying that Bredesen is not getting a 40-cent tax hike. Ramsey says that with such a high surplus-with the State taking in far more money than it needs to fund even the most ambitious programs, we should be talking about tax relief instead of tax increases. I would go so far as to say that if the surpluses continue coming at this rate, we as a State need to consider eliminating certain taxes altogether-and the grocery tax should be at the top of the list.



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