Tennessee governor to twist arms on taxes?

Widely criticized by legislative members for not taking the lead in resolving Tennessee's budget crisis, Gov. Don Sundquist has called an unusual summit meeting of the House and Senate leadership at his residence tomorrow morning – an action that will almost assuredly bring even more pressure for a state income tax.

In the summer of 2000, police cars blockaded the Tennessee state Capitol entrances and troopers patrolled legislative hallways as the legislature found itself under siege by thousands of angry taxpayers upset at a plan to implement a state income tax. The drama was revisited last summer, as protesters demonstrating against proposed new taxes were thwarted by the city of Nashville's decision to suddenly dispatch road crews to work on pavement around the state Capitol.

Last week, longtime state Sen. John Ford, D-Memphis, introduced his 10 percent flat-rate income tax proposal, reviving the issue that caused major protests during the legislature’s 2000 and 2001 sessions. As talk radio hosts Phil Valentine, Steve Gill and others moved their shows to the Tennessee State Capitol, and Metropolitan Nashville police officers braced for protesters, the long-brewing, popular opposition to such a tax boiled to the surface when word swept the crowd that legislators were preparing to meet behind closed doors and approve an income tax.

Court shot down income tax

Anti-tax protesters, including Tennessee Libertarian Party head Dr. Richard Pearl, point out that the Tennessee Supreme Court has already shot down a state income tax as unconstitutional in the case of Cole v. McFarland. But according to Democratic Caucus Chair Rep. Randy Rinks, D-Savannah, Tennessee Attorney General Paul G. Summers has issued an opinion that a flat-rate income tax would be constitutional. Despite that, Rinks still doesn’t see the income tax coming to fruition.

“Although everyone agrees that we have a serious problem, I still do not see a majority for any one idea,” he told WND.

Most observers, such as veteran political analyst Larry Daughtrey at The Tennessean newspaper in Nashville, don’t anticipate passage of a state income tax. In a recent column, Daughtrey pointed out that it’s an election year, and legislators who have to face the voters in November will not be eager to incur their wrath.

But other alternatives, floated earlier in the current legislative session, such as robbing various and sundry state accounts to make up this year’s deficit are losing ground quickly as news emerges of problems associated with those “quick fixes.” Last summer’s budget crisis was resolved by stealing funds from the tobacco settlement account, a portion of which was to be used to fund tobacco education projects for young people. But now, a new study released by the Jackson Sun newspaper earlier this week shows that Tennessee is tied for last among all 50 states in its spending on tobacco education.

To date, Tennessee has spent nothing for that designated purpose, while state lawmakers raided the fund to make up their budget deficit.

The proposed state lottery, to be voted on by the people in November, is earmarked for education, and does little to resolve the budget crisis.

The state’s Rainy Day Fund doesn’t even begin to touch the mounting deficit, now over $300,000,000.

A very real possibility, one that is now gaining ground quickly, is a raise in the state sales tax. Earlier, Sundquist had vowed to veto any legislation that included such an increase, but political commentator Pat Nolan said recently in a commentary on WTVF-TV in Nashville that Sundquist has sent signals that he will now accept a higher sales tax. The story smacks of some sort of compromise, but leaders are closed-mouthed.

One Democratic leader said, “I did not know he had changed his mind, but at this point nothing surprises me. He is probably resigned to do whatever it takes to get something passed.”

A wild card in the budget negotiations is Lt. Gov. John Wilder. Having maintained his position for some 20 years through an oddball coalition of disaffected Democrats and Republicans, Wilder seems to swing with the wind. One veteran legislator told WND, “You never know which way he’s going to vote; one day he may be for an income tax; the next day he’s not."

For now, Tennessee eyes will be focused on the governor’s mansion in the fashionable suburbs of Nashville, to see whether white smoke emerges. One thing is certain: Sundquist’s agenda includes a state income tax and it’s likely that he’ll turn to arm-twisiting the remaining hold-outs among the legislative leadership. Some observers, like Libertarian head Pearl, see nothing new emerging from this “summit conference.” But regardless of what this unusual meeting produces, one thing that seems sure is that Tennesseans will face a higher tax burden, either at the cash register or on their incomes.

Some observers are uneasy that Sundquist has summoned leaders to his official residence, raising the question: “Are agreements reached in a private meeting and ratified in a public forum any less a violation of Tennessee’s Sunshine Law than decisions reached in a completely closed session?” Some say yes, some no.

With less than 20 days remaining in the current regular session, perhaps Pearl puts it best: “Hang on. The fun is just beginning.”

Previous stories:

Next round in Tennessee tax debate

Tax protesters meet pavement crews

Anti-tax Tennesseans prevail

Contempt of congress

Tennessee tax attack

Tennessee v. talk radio

Tennesseans stage tax revolt