Tax: TN Tax Update Page 1

But she hasn’t given up hope that revenues will rebound. “I hear rumors that Kentucky’s going to do another tax increase,” High said. “I’m just hoping that they do.”

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Tax hike prompts cigarette surveillance on state borders

Sep 21, 2007

NASHVILLE, Tenn. (AP) – The Tennessee Department of Revenue says it will be conducting surveillance of tobacco retailers just over the state line.

Commissioner Reagan Farr says he wants Tennesseans to know cigarettes purchased out-of-state may be considered contraband.

Possessing more than 20 packs – or two cartons – of cigarettes not bearing Tennessee revenue stamps is a misdemeanor. Possession of more than 25 cartons of untaxed cigarettes is a felony.

Tennessee’s cigarette tax increased from 20 cents per pack to 62 cents per pack in July. The department says the tax hike may be leading to large sales in neighboring states with lower taxes.

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House vote sends 42-cent cigarette tax hike to governor

June 4, 2007
By ERIK SCHELZIG, Associated Press Writer

NASHVILLE, Tenn. (AP) — Smokers will pay an additional 42-cent tax for each pack of cigarettes beginning next month under a bill headed for Gov. Phil Bredesen’s signature.

The House voted 60-34 to approve the measure, which Bredesen has dubbed the centerpiece of a half-billion dollar plan to overhaul the state’s complex school funding formula.

Forty-six Democrats and 14 Republicans voted for the measure, which had earlier passed the Senate on a 17-16 vote. All 16 Senate Republicans voted against the plan.

Bredesen, a Democrat, said he was pleased that the bill finally passed.

“This is about funding education and saving lives,” Bredesen said in a statement. “Now let’s pass a good budget and close out this session.”

Tennessee’s current cigarette tax is 20 cents, fourth-lowest in the nation. The new total of 62 cents still leaves the state below the national median of 80 cents a pack. New Jersey has the highest cigarette tax in the country at more than $2.57 cents per pack.

House Democrats rejected several amendments offered by Republicans – including proposals to reduce the state’s sales tax, create smoking cessation programs and set up a veterans fund.

House Majority Leader Gary Odom, D-Nashville and the bill’s main sponsor, said the attempts to change the bill were an effort to kill it by sending it back to the Senate, where several absences among Democrats would likely have brought defeat.

“I’m really disappointed with that, because you could tell the amendments weren’t serious,” Odom said of the often-heated debate on Monday night.

Republicans objected to raising a tax during a string of strong budget years.

House Minority Leader Jason Mumpower, R-Bristol, turned back accusations that his colleagues were trying to torpedo the bill.

“In the 11 years I have been here I have rarely seen this body want to rush so quickly to do what the state Senate has told us to do,” he said. “We are living in a time when we have a record budget surplus.”

“We’ve got plenty of money, we don’t need the money, and we don’t need to start in Tennessee raising taxes for social engineering,” said Frank Niceley, R-Strawberry Plains.

House Republicans had earlier sought to block a vote on the cigarette tax until the Senate floor passed along a proposal to use state lottery reserves to pay for school construction and maintenance projects.

But that measure failed in a Senate committee when Republicans there could only muster four of the five votes needed to advance it to a floor vote.

Republicans appeared ready to drag out the debate indefinitely, until the Democrats took advantage of an obscure House rule to set a hard 10:30 p.m. CDT deadline for a vote. Republicans ultimately agreed to let the vote occur around 9 p.m.

“The Republicans quit their filibustering and we got things done,” said House Speaker Jimmy Naifeh, D-Covington, said of the vote.

Naifeh said the passage of the cigarette tax means that a plan to reduce the sales tax on groceries from 6 percent to 5.5 percent has a strong chance of becoming law.

The tax increase is one of two major tobacco-related bills passed by the General Assembly this session. Last week a bill to ban smoking in most Tennessee workplaces, including restaurants but not bars, was sent to the governor.

Bredesen originally proposed a 40-cent increase for the education overhaul that would boost teacher salaries, pay for the increased costs of educating students from poor families and bridge a funding gap for fast-growing school districts. The Senate tacked on 2 cents to help fund trauma centers.
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Read the full text of HB2354 on the General Assembly’s Web site at http://www.legislature.state.tn.us

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Overbey says cigarette tax ‘up in the air’

June 2, 2007
Joel Davis

When the Tennessee General Assembly reconvenes today after the long Memorial Day weekend, local legislators are hoping for a quick end to the session.

The legislature will primarily be focused on approving a 2007-2008 fiscal year budget, said State Rep. Doug Overbey, R-Maryville.

“We will return on Tuesday with a goal of trying to adjourn by June 7th or 8th,” he said. “When you have this long weekend, it, to some extent, breaks the momentum. We’ll … try to pick back up and complete our work and adopt a budget. We’ve got some major issues to consider.”

Gov. Phil Bredesen has proposed increasing the cigarette tax by 40 cents to increase education funding.

The Senate Finance Committee on Thursday recommended halving the proposed cigarette tax hike to 20 cents.

“It is still up in the air as to what the House will do with the proposed cigarette tax,” Overbey said “There is momentum for the 40-cent tax increase, given the changes the governor has proposed in the BEP program, which has increased funding for some of the larger metropolitan areas, and may have picked up some votes.

“On the other side, some members understand what the Senate did, which was you could still fund educational improvements by using the growth in revenue and a lesser tax increase. My crystal ball is still not clear enough as to how that will eventually play out.”

State Rep. Joe McCord, R-Maryville, feels that legislative proposals to alter the BEP funding is the most important issue at the moment.

“I represent four local education authorities,” he said. “None of them are coming out particularly well in this prospect. I’m still working with the administration to try to get some changes. It’s still a very fluid proposal.”

According to previous estimates, if the BEP 2.0 is fully funded, Blount County would receive $1.035 million more than last year’s amount of $40.3 million. For Maryville, the difference would be $344,000 and for Alcoa $198,000.

McCord is also concerned that the proposed BEP changes are not being give enough thought.

“I do not favor restructuring the BEP in just a couple of weeks,” he said. “We are not pressed that we have to do it this year. I’m not sure whey we’re rushing to do this when it’s one of the most serious things we do.”

As for a cigarette tax proposal, McCord doesn’t think a 40-cent increase is needed.

“I tend to favor the Senate version if we’re going to have an increase,” he said.

It’s going to take time to get everything resolved, McCord said.

“I’ve also heard that several senators will be out of town,” he said. “The names I heard are names the governor needs for support on his tax increase proposals. That kind of makes me think we may stay over the (next) weekend and try to wrap-up because he needs those votes.”

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Senate approves 42-cent hike on cigarettes; House delays vote

May 31, 2007
By LUCAS L. JOHNSON II and BETH RUCKER, Associated Press Writers
NASHVILLE, Tenn. (AP) — The Senate voted on Thursday to more than triple the state’s cigarette tax to 62 cents per pack to pay for a half-billion dollar plan to improve Tennessee’s schools.

The 42-cent increase was approved by the chamber on a 17-16 vote after an earlier proposal to pass a 20-cent increase was rejected. Republicans voted against the 42 cents, and all Democrats and independent Mike Williams of Maynardville voted in favor.

The measure must still be approved by the Democrat-controlled House before it can head for the governor’s consideration. A 40-cent increase previously passed one significant hurdle by clearing the House Agriculture Committee, which has historically voted in favor of tobacco.

The House delayed a vote on the cigarette tax until Monday to allow time for further discussion about a Republican proposal to distribute excess lottery revenues to school building projects around the state.

House Speaker Jimmy Naifeh, D-Covington, criticized some lawmakers for saying they had committed to vote for a 40-cent tax increase, but not a 42-cent hike. He said the extra two cents should not hold up the chamber’s action on the bill.

Sen. Dewayne Bunch called the measure “political” and said there was enough projected surplus money to fund the education package without the tax hike.

“You’ll have to tell your constituents that ‘You were misled and that you were taken advantage of for political reasons,'” said the Cleveland Republican, who voted against the bill.

But Senate Democratic Leader Jim Kyle, the bill’s sponsor, said the 42-cent hike was an efficient way to fund the education improvements.

“If there was a plan where you could fund the education plan and not have 42 cents, it would have been presented by now,” said Kyle, of Memphis.

Tennessee currently has one of the lowest cigarette taxes in the nation at 20 cents per pack. Only Missouri, Mississippi and South Carolina have lower rates, according to the Federation of Tax Administrators.

If lawmakers increase the tax to 62 cents, Tennessee would still be below the national median of 80 cents per pack. New Jersey has the highest cigarette tax in the country at more than $2.57 cents per pack.

Gov. Phil Bredesen had proposed to use a 40-cent increase in the cigarette tax to pay for sweeping changes to the state’s school funding formula.

Sen. Rosalind Kurita, D-Clarksville, added an additional 2-cent increase on each pack of cigarette to add funding for trauma centers around the state. Kurita’s amendment was approved on a 14-10 vote.

Sen. Roy Herron, D-Dresden, said the increase would not only help fund the governor’s education initiatives, but also save lives.

“This bill will save more Tennesseans lives this year, than any other bill this session,” said Herron, whose sister smoked and died of cancer.

Each additional cent added to the cigarette tax would raise about $5 million in new revenue.

The Senate’s approval of the tax came shortly after both chambers passed education bills that would overhaul the state’s Basic Education Program, or BEP, which allocates spending between state and local governments.

Both chambers also approved accountability standards for schools based that were demanded by Senate Republicans before agreeing to consider the cigarette tax to pay for it all.

Bredesen said the entire proposal would cost the state about $524 million more a year, but he wanted start out by funding a $280 million segment in the upcoming budget year.

The state was slated to spend $3.41 billion on K-12 education in the current budget year, with an additional $873 million drawn from federal sources.

Read the full texts of SB2177 and SB0570 on the General Assembly’s Web site at http://www.legislature.state.tn.us

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Cigarette tax hike heads to full vote
Senate panel OKs plan to double levy; bill goes to floor
By TOM HUMPHREY, tomhumphrey3@aol.com
May 25, 2007
NASHVILLE – A key Senate committee voted Thursday to raise the state cigarette tax by 20 cents per pack, double the current levy but only half what Gov. Phil Bredesen wants.
The Republican-controlled Senate Finance Committee had been the major roadblock to a tobacco tax increase, which Democrat Bredesen contends is needed to finance long-term improvements in education despite a state revenue surplus.

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Finney at odds with Bredesen’s tax hike proposal

May 22, 2007
By Joel Davis, of The Daily Times Staff

What do state lawmakers do when it’s raining money?

Good question. They don’t know yet, either.

Faced with a scenario not normally associated with state finances (about $300 million in surplus revenue in the current budget), the Tennessee General Assembly is debating what to do with the money and whether to approve Gov. Phil Bredesen’s proposal to increase the cigarette tax by 40 cents to fund education programs.

State Sen. Raymond Finney, R-Maryville isn’t currently inclined to support the governor’s proposal.

“Every time we get new revenue figures, we’re just getting more and more money,” Finney said during a telephone interview Monday. “We have a few hundred million dollars more than we expected. We’re just flushed with money this year.

“Many of us don’t see how we can justify having a new tax or increasing a tax when we have so much in reserves. The governor has plenty right now to finance everything in his education plans.”

Bredesen has asked for a 40-cents-per pack increase in the state’s cigarette tax to increase education funding. Lydia Lenker, Bredesen’s press secretary, said Monday that the governor’s plan needs a dedicated revenue source.

“If we don’t fund this with the 40-cent tax increase, we’re not going to have the money we need to fund education,” she said. “They are talking about money that is available this year, but what happens next year if that same amount of money doesn’t come in? You can’t launch something this big and comprehensive and not be sure the funding is there.”

The governor’s proposal also has a public health component, Lenker said.

“This is also about reducing smoking among teenagers,” she said.

Still, Finney doesn’t think that a tax increase would be the best option.

“If you have money in the bank to build a new house, you don’t go out and borrow money,” he said. “You use the money you have in the bank. We’re in good shape financially.

“If we get a cigarette tax, it will be less than 40 cents. Some of it will go to food tax relief or other ways of giving money back to the people.”

The projected surplus is also drawing other ideas for spending it.

“Right now, one of the contentious issues is that some of the House Democrats want to have pork projects and give each representative $300,000 and each senator $100,000 to spend back in their districts. Many of us are opposed to that.”

Finney advocates another plan being develop that would give additional funding to nonprofit organizations across the state, such as volunteer fire departments.

State Rep. Joe McCord, R-Maryville, said the budget question will not be solved soon.

“It’s fairly well agreed we’ll adjourn on Thursday and come back Tuesday (May 29),” he said. “Unless there is unanticipated movement on the budget, I don’t think it’s possible we can finish this month. It’ll be in June.

“After this week, just about all the committees will be shut down. Historically, we’re done by (Memorial Day weekend), but I’m kind of disappointed we’re not.”

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May 22, 2007
Tennessee Representatives and Senators,
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I have been reading news articles about our State fixing to have excess funds of at least $300 million dollars this year. I have also read reports that most all of the Democrats and most of the Republicans, want to spend that money on pork barrel projects in their home districts. I find this very upsetting that the Legislators of this Great State of Tennessee, would like to levy a tax hike on cigarettes, to curb underage smoking, so the Governor can have money for the schools. First if you think that raising the tax will curb underage smoking, then you are not thinking very clearly. Does higher gas prices stop drunk drivers? Does taking away their drivers license stop drunk drivers? How about the 14 year old boy who was driving a car this weekend in Blount County while under the influence of alcohol, when he wrecked the car with two passengers that were 13 years old? Raising cigarette tax is not going to do anything to stop underage smoking. When you crack down on the stores and the parents or friends who purchase the cigarettes for the minor, then you might slow down underage smoking.
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As for the extra money the state has coming in June. Has anyone worried about how much money Tennessee families are having to spend at this time for every day items? When will government understand that when gas prices rise, the price of everything rises. A gallon of milk has almost increased 100% in the past year. The news just reported that people have paid an extra $146.00 in 2007 for gas. A report on a family of 6, had them spending $300.00 per week for their daily living, but now the figure is $600.00 per week for the same family, with the same expenses.
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In 2005 we lived off of $2,700.00 per month when I worked for the Tennessee Air National Guard as an Air Technician. Since my medical retirement and having to get a job to survive, we now bring in $2,600.00 per month and can barely make it from payday to payday. But yet the Governor and most of his followers want to levy a tax hike on 25% of the population for schools, which by the way get 62% of my county taxes every year. I know one reason why Blount County cannot afford to support the schools. In order to entice business to our County, they offer them big tax breaks, and thus the taxpayer pays for it in property tax increases. When the State lowered the tax base figure, Blount County raised it back up. Now they want more tax money, but yet when Denso wanted to build it’s fourth plant, they gave them a big tax break to build it in Blount County. Now I’m no dumb hillbilly, but if Denso already had three plants next to each other, what were the odds they would have built the fourth one some where else, if they had not received a tax break? Truth is Denso planned to build here all the time. They get businesses here, which means more children, then they complain because they cannot afford bigger schools.
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Don’t waste that excess money on junk, just to have a tax hike for schools. Instead use that money and even Lottery money for EDUCATION.
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Be wise and spend that money wisely and quit trying to stop underage smoking by raising the tax. That will not discourage underage smoking.
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Very Respectfully,
Robert F. Pritchard – mailto:info@yessir-tn.info
Southeast Regional Director of The Smoker’s Club, Inc.
YesSIR of Tennessee – http://www.yessir-tn.info
The Smoker’s Club, Inc. & Video Archive – http://www.smokersclub.com
Smokers Rights Newsletter – http://www.smokersclubinc.com

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Unexpected funds make it harder for Tenn. to pass budget
May 20, 2007
By Erik Schelzig, The Associated Press

NASHVILLE — Democratic Gov. Phil Bredesen and Senate Republicans agree that it would be easier to settle on the budget if it weren’t for an embarrassment of riches in state tax collections.

The state could have $300 million more than it expected in tax collections by the end of the budget year in June. And the same amount again is expected in projected revenue growth next year.

The governor proposed a 40-cents-per pack increase in the state’s cigarette tax before the state’s revenue bonanza became clear. He has since suggested a staggered hike — 25 cents this year, and 15 cents the next — to raise money for education.

But he’s having a hard time persuading Republicans to agree to the full 40-cents tax. Bredesen has rejected a Republican proposal to phase in a 30-cent tax over four years.

The unexpected extra money “kind of threw a monkey wrench into the whole process,” Bredesen said. Republican Senate Speaker Ron Ramsey agreed: “This would have been much easier if we hadn’t had the $300 million surplus.”

Under one scenario for resolving the impasse, Senate Republicans say they could agree to a cigarette tax — as long as it’s less than 40 cents. In exchange, they would get a two-month holiday on the state’s 6 percent sales tax on groceries.

The sales tax holiday would apply only to this November and December, so it would be considered a one-time hit. The cigarette tax, by contrast, would come in every year, meaning the state could plan to use the money for recurring education costs.

But Bredesen appears as unenthusiastic about the food tax holiday as Republicans are for his full 40-cent increase in the cigarette tax.

“The road they’re headed down is like a teenager that finds himself with 20 extra dollars on Friday and just can’t wait to spend it,” Bredesen said.

The two-month food tax cut would cost the state about $130 million, according to Ramsey’s projections. Bredesen instead wants to place the bulk of the one-time money — $200 million — in the state’s rainy day fund. That’s on top of the $36 million he already earmarked for the reserve fund in his budget proposal in February.

Ramsey agrees that the state should sock away more money for the reserve fund, but that taxpayers deserve duty-free groceries in the last two months of the year. Ramsey said his Republican colleagues are adamant that any compromise would include tax relief.

“If they feel like they want to take money out of the reserve fund to give the tax relief, I will say that I think that is crazy,” Bredesen said. “But if they can get it passed, they will get it passed.”

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Local lawmakers against proposed tobacco tax
4/28/07
By Mark Boxley
With a budget surplus projected as high as $300 million waiting in the wings, Tennessee government is living in the good times.
At least that’s what Maryville’s three state legislators said Friday when they met with members of the Blount County Chamber of Commerce — and it’s a reason they aren’t exactly in line with Democratic Gov. Phil Bredesen’s proposed 40-cent increase to the state’s tobacco tax.
One thing really holding up Reps. Doug Overbey and Joe McCord and Sen. Raymond Finney — all Republicans — is they say it’s not clear exactly where the more than $200 million expected to come from the increase will go.
Bredesen has said he would like to see the most of the money go toward improving education in the state, but Finney said “details are very sketchy” about what that actually means. And with that kind of money, there are certainly other needy areas of government that could use a monetary kick.

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Comptroller urges state to fix school funding
By LUCAS L. JOHNSON II, Associated Press
April 26, 2007
Today’s News
NASHVILLE – Tennessee Comptroller John Morgan urged lawmakers Wednesday to take advantage of the opportunity they have to pay for education improvements, in particular reworking the state’s school funding formula.
The governor wants to use $120 million of the proceeds from the proposed cigarette tax increase to pay for the increased costs of educating children from poor families. The plan also includes $27 million more to bridge a funding gap for districts that have large growth in student population.
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Request $219 million be returned to smokers for Prevention and Cessation Programs
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If you really believe the evidence & science is clear that tobacco prevention and cessation programs are part of the solution to the fiscal crisis states are facing with health insurance, then why isn’t the money used for the purpose intended??
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I believe, as should you, that anyone who wants or needs to quit smoking should have full access to free drugs to help him or her quit. The Tobacco Taxes should more than cover the costs. If you really believe the smokers are killing the rest of you then use the $219 million for that alone & forget using the monies for Schools! We’re giving you the taxes so give it back to us for tobacco prevention and cessation programs.
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Now can you tell me how much your heart is into this if you can’t use it the way you choose too?
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Simple Solution: Either forget the tax increase or return it back to us to stop smoking??? It doesn’t belong to you, nor the State to use for schools, it belongs to the smokers, so therefore you return it to us so we can stop smoking & we will stop being a burden to the health care system as you claim.
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Up until now the cigarette tax has been an appropriate way to prop up the state’s coffers. I’m requesting if you must pass these bills to increase the Tax by .60 & ban smoking that you use every single penny of the $219 million for tobacco prevention and cessation programs. Why shouldn’t you?
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The Smokers are fair game & besieged by everyone making money from their habit and pretending to act in their best interest! The Smokers of TN are Requesting the $219 million to be returned to US for Tobacco Prevention and Cessation programs!
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It’s quite simple, if you have our best interest at heart PROVE IT by returning the monies to us so we can stop! Otherwise, this is not fair taxation!
?
Gloria Fay Burris
gloriafayburris@comcast.net
Lake City, TN

? Copyright 2007 The Smoker’s Club, Inc. Please repost with link back to this original article.

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Cigarette tax puffed up to original 40-cent hike

April 19, 2007
By John Rodgers, jrodgers@nashvillecitypaper.com

After drastic changes and nearly three hours of debate a week earlier, it took less than 10 minutes for an influential state House panel Wednesday to restore Gov. Phil Bredesen’s main legislative priority — tripling the cigarette tax — to its original form.

The House Budget Subcommittee, stocked with Democrats and moderate Republicans, changed Bredesen’s cigarette tax bill back to how the Bredesen administration preferred through a voice vote. Not one lawmaker on the panel voiced opposition.

Now, the bill again raises the per pack cigarette tax from 20 cents to 60 cents. That tax increase is estimated to take in about $219 million in revenue, with nearly $200 million going to increasingly fund K-12 and higher education.

Bredesen, who has acknowledged he underestimated the difficulty of passing a cigarette tax increase, told the Tennessee County Services Association Wednesday that it “has to be the easiest tax ever proposed in the history of our state” in terms of acceptability.

“It helps school districts all across the state,” Bredesen told reporters after his speech.

Metro schools would get an additional $10.7 million if the tax increase passed.

About $21 million in the bill is earmarked toward “agricultural enhancement grants.”

The agriculture funds are the only remnant of the House Agriculture Committee’s action last week.

At that meeting, the Agriculture Committee debated for nearly three hours before voting to increase the cigarette tax only 20 cents and use the money raised to take the sales tax off of groceries for certain basic food items.

The Budget Subcommittee hiked the cigarette tax increase back up to 40 cents with little debate and eliminated the sales tax reduction in the basic food products, called Women, Infants and Children (WIC) items, from the bill.

“It didn’t fit on this bill,” said Dave Goetz, Bredesen’s finance commissioner. “I think some form of tax relief is clearly on the minds of both houses, and there’ll be discussion about that as we bring this session to a close.”

One tax proposal floated by Republicans in the state Senate is using one-time tax dollars to take the sales tax off of groceries for an entire month, such as December of this year.

Democrats in the House have a competing plan to take the sales tax off of food entirely on certain specific items like milk, eggs, baby food and formula.?

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Senate delays action on cigarette tax hike for schools

3/27/07
NASHVILLE (AP) — The Senate Finance Committee delayed voting on a proposal to increase education funding through a hike in the cigarette tax in the face of resistance from members from both parties Tuesday.
Gov. Phil Bredesen is calling on lawmakers to triple the cigarette tax to raise about $219 million, with most of it going toward K-12 and higher education.

Senate Democratic Leader and bill sponsor Jim Kyle of Memphis agreed to delay the vote but urged the committee members not to put off action for too long. School districts need to start planning based on how much money they are likely to have next school year, he said.

Bredesen, a Democrat, has proposed a balanced spending plan to pay for state operations in the budget year that begins July 1. The education proposals from the cigarette tax would be a separate “bucket of money,” Kyle said.

Kyle urged members of the committee to consider the governor’s call to improve education in Tennessee, which often places near the bottom of national rankings. “He’s asking us not to be mediocre,” Kyle said.

The committee is scheduled to consider the bill again in two weeks. The companion bill likely will face an equally difficult test when it is heard in the House Agriculture Committee.

Administration officials said they will use the extra time to try to persuade committee members to advance the bill to a full Senate vote.

Republicans hold a 6-5 edge in the Senate Finance Committee but have a 16-16 tie with Democrats in the full Senate. Sen. Mike Williams of Maynardville dropped his Republican Party affiliation to become an independent earlier this month.

Sen. John Wilder, D-Mason, said he has voted for every tax bill that has come through the Senate in 43 years but said he’s reluctant to approve the cigarette tax before the rest of the budget is dealt with.

“I really would like for us to finish the budget before we levy a tax,” said Wilder. “And there are some items in this budget that give me concern.”

Senate Republican Leader Mark Norris of Collierville has said Bredesen’s “Schools First” proposal should instead be labeled “Schools Last,” because it doesn’t adjust the state’s regular operating budget to prioritize schools.

State Finance Commissioner Dave Goetz dismissed Norris’ criticism as “rhetoric.”

“Anyone who’s been around here longer than three weeks knows that you always have the base budget plus any improvements that you want to make, and that’s the way it works,” he said.

Norris said Republicans shouldn’t be denied the opportunity to “truly fund education first as we see fit, out of the budget itself.”

Kyle responded that he was unaware of a “secret plan” among Republicans to increase education funding at the expense of other regular budget items.

Kyle said senators have recommend more than $100 million over the Bredesen’s regular spending plan.

“It does not appear to me that our standing committees have any interest in funding the education proposal out of the existing budget, because they are adding money to the budget,” he said.

Senate Finance Chairman Randy McNally, R-Oak Ridge, pointed out that the budget recommendations of other committees need to be approved by his panel first.

Senate Speaker Ron Ramsey said he was pleased with the decision to put off the governor’s proposal.

“The votes aren’t there right now,” said Ramsey, R-Blountville. “I think the majority of Republicans and several of the Democrats think it’s way to early to be looking at revenues.”

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Cutting food tax trashed, hiking cig taxes embraced
March 21, 2007
By John Rodgers, jrodgers@nashvillecitypaper.com
… Meanwhile, the “Better Schools Coalition,” a statewide group of local government officials, business, education and healthcare organizations, endorsed Bredesen’s “Schools First” campaign Tuesday, which is a proposal to triple the cigarette tax from 20 cents per pack to 60 cents per pack to increasingly fund public education.
“The governor’s right,” said Mayor Bill Purcell, who spoke at the coalition’s press conference. “We need to focus on education and we need to do it now. It’s not one of those things that can wait.”
Beavers opposes Bredesen’s cigarette tax hike, saying the state doesn’t “need any new taxes this year.”
Read More

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Plan to triple cigarette tax faces a fight?

02/21/07
BRAD SCHRADE

Gov. Phil Bredesen’s proposal to triple the state’s cigarette tax would lower the number of kids who start smoking, according to anti-smoking advocates, but the proposal unfairly burdens cigarette smokers and would hurt Tennessee businesses, according to a tobacco spokesman.

The proposal would raise an estimated $219 million annually, most of which would go to fund the governor’s school programs. The additional money also would go to anti-smoking campaigns and to help farmers.

The tax is currently 20 cents per pack, which is fourth lowest among the 50 states, according to the Campaign for Tobacco-Free Kids, a Washington-based group. Bredesen’s proposal would increase the tax to 60 cents per pack, which would tie Tennessee for 32nd with Wyoming. The national average is about $1 per pack.

Studies show a 10 percent increase in price reduces smoking among kids by 6.5 percent and among adults by 2 percent. The group estimates Bredesen’s proposal would mean 31,900 kids would not start smoking, while 21,900 adults who smoked would quit.

“If they keep raising it, I’m sure everyone is going to quit smoking,” said George Scott, who is self-employed in the heating and cooling business. “It gets ridiculous. Everything’s going up.”

He said he cut back from a pack a day to two packs a week the last time the price went up and probably will cut back even more if the legislature approves the governor’s plan.

“Our view is that increasing the tax will be a good thing in and of itself,” said Pete Fisher, vice president for state issues with the Tobacco-Free Kids group. “We know it will persuade people, most of who want to quit already, to go ahead and try to quit. It will persuade many kids not to start.”

The plan unfairly burdens smokers in Tennessee and will drive them to neighboring states where cigarette taxes are lower than 60 cents, according to Steve Kottak, a spokesman with Reynolds American, the Winston-Salem, N.C.-based cigarette maker.

Kottak said the state received $435 million last year from smokers, including the excise tax, sales tax and tobacco settlement payments. None of that money went to programs that reduce smoking, he said, and it’s excessive for the state to turn to smokers again. He said the median household income for smokers in the state is $31,494, vs. $40,689 for nonsmokers.

If the legislature approves the tax increase, it could mean a loss of 1,000 jobs, and the average convenience store could lose up to $12,000 a year, Kottak said.

“They already have a large sum of money, billions of dollars,” he said. “To target smokers to pay even more is unfair. What other sources of funding do they have for these programs? Why penalize a smoker for choosing to smoke?”

Reynolds and other tobacco companies have lobbyists at the state capitol ready to argue their side. The legislature also is expected to consider a ban on smoking in the workplace.

Lawmakers on Tuesday received additional details about the cigarette tax proposal, as the Bredesen administration unveiled its proposed $27.48 billion state budget for the coming year.

The legislature will consider the budget in the coming months and decide sometime this spring. The cigarette tax is expected to be among the most hotly debated issues. It was less than a year ago that the legislature banned smoking from the Capitol complex.

Some lawmakers Tuesday were not so sure that a 40-cent increase would pass. The legislature five years ago raised the tax from 13 cents a pack to 20 cents, after a proposal to raise it to 43 cents failed. The next year a proposal to triple the tax to 60 cents went nowhere.

Several lawmakers interviewed Tuesday said they expect the tax to go up, but aren’t so sure that 40 cents will pass. Lt. Gov. Ron Ramsey, R-Blountville, said it’s hard to justify a tax increase of any kind when state revenue is at an all-time high, but he understands the issue has support.

“In the end, it will be somewhere between zero and 40,” Ramsey said. “I think something will pass.”

Sen. Douglas Henry, D-Nashville, who is a leader on the Senate Finance, Ways and Means Committee, said he supports the governor’s proposal to use the tax to fund education, but would not make predictions on whether the measure will pass.

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Friends and fellow smokers,
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Below is the email that I mailed separately to each of my State Legislators tonight. I encourage each and every one of you to write your legislators ASAP. The Governor is going to ask for a cigarette tax hike to fund education. As I told them I do not have a child in school and have not for 10 years, and 75% of my county property tax goes to schools. In my personal opinion I feel that this is an effort to tax a select few of the State residents and I feel that this is discriminating against a select few, who are looked upon as second class citizens, who use a legal product.
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Ask yourself what you think is next. Is it soda that they have already started on, or obesity,which has been a topic, or the new one just found that shows the American Lung Association is doing research, love that word research, that makes using donated money look good on paper, doing research on the premise that smoke from wood burning fireplaces, stove and ovens is a health risk. Go tothe last newsletter and read the article for Ohio, it will knock your socks clear off. It’s funny that until the 70’s or 80’s most of the houses in the mountains were heated with wood burning fireplaces, stoves and ovens, and most of them lived to be between the age of 80 to 100 years old.
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Write those letters

—– Original Message —–
From: Robert Pritchard
To: Rep. Joe McCord
Sent: Monday, February 05, 2007 7:33 PM
Subject: Governor talks of Cigarette Tax hike
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Senator Finney Sir,?? sen.raymond.finney@legislature.state.tn.us
Representative Overbey Sir,?? rep.doug.overbey@legislature.state.tn.us
Representative McCord Sir,?? rep.joe.mccord@legislature.state.tn.us
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One of the local TV stations reported that the Governor was going to ask State legislators for a increase in the cigarette tax to help fund education issues. I presently pay property taxes to my county that around 75% goes to schools, and I have not had a child in school for 10 years. Now I hear that State officials are discussing a cigarette tax hike for education. If this is true, I would ask you if that could not be construed as tax discrimination, when you are targeting 25% of the state residents to fund schools? It seems that if you want more money for schools, what happened to the Lottery for education. The lottery has extra money and it was voted in for education which includes schools? It seems now days that alot of politicians, be it State, City or County are all pushing laws against the smokers and now they are even starting that smoke from wood burning fireplaces and stoves are a health risk. When will government stop trying to run our lives and tell a business owner how to run his business. It just fires me up to see an article that the American Lung Association is behind the fireplace smoke in California. They get contributions to find a cure for Lung cancer, not to fund studies about a fireplace in someone’s home. A Pizza business owner in Ohio, who has never allowed smoking in his business, has been put on notice that he is in violation of the State Smoking Ban. He has always cooked his pizzas in a wood burning oven, like in Italy, but the Smoking Ban says they cannot burn tobacco or any other plant, oak being a plant. When is enough, enough? When is government going to say let the people run their own lives and businesses? We are taxed for everything and they want more taxes, but wages don’t seem to go up much, not near as much as the taxes. Price of gas and food has gone up but wages have not near as much. I draw a disability retirement every month and got a whopping 1.1% cost of living increase, a big $15.00 dollars a month. I say that enough is enough and this State and the Cities and Counties need to learn to live within the taxes they get.
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The State wants to tax me more, but the Cities, Counties and possibly the State give tax breaks to businesses to come here and build. Denso was given a tax break for their new building, but they would have built it anyway, so I have to pay more taxes. They move here, more children in schools, need more schools, so let’s just tax the residents to make the offset for giving business a tax break. This is wrong, and eventually more people will be calling and writing and complaining. Enough is Enough!!!
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Very Respectfully
Robert F. Pritchard – mailto:info@yessir-tn.info
Southeast Regional Director of The Smoker’s Club, Inc.
YesSIR of Tennessee – http://www.yessir-tn.info
The Smoker’s Club, Inc. & Video Archive – http://www.smokersclub.com
Smokers Rights Newsletter – http://www.smokersclubinc.com

This link is to State Senator Finney, who represents Blount and Sevier Counties in TN. When they go to this link the select 2007 Survey and they complete the survey and put comments. Top two headings are Smoking in Public Buildings and Taxes. This is way for constituents to vote their opinion and give him and the State Government a grade at the end.
http://www.finneylistens.com/???????????
http://www.finneylistens.com/2007survey.html

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Cigarette, food ‘tax swap’ bill dies
Defeat blamed on opposition by lobbyists, Bredesen administration

By TOM HUMPHREY, tomhumphrey3@aol.com
May 26, 2006

NASHVILLE – A proposed “tax swap” – raising Tennessee’s tax on cigarettes while lowering the tax on food – died Thursday in the Senate Finance Committee after a leader of Gov. Phil Bredesen’s administration spoke against it.

The bill, SB3626, would have raised the cigarette tax by 14 cents per pack to 34 cents while lowering the state sales tax on groceries from 6 percent to 5 percent. Sponsor Sen. Doug Jackson, D-Dickson, said the result is revenue neutral for tax coffers.

Jackson said Tennessee now has the “highest tax in America on food” and thus penalizes “our most needy citizens.” At the same time, he said, Tennessee has the third-lowest tax in the nation on cigarettes.

“That is patently wrong,” said Jackson.

Finance Commissioner Dave Goetz, however, spoke against passage, saying that the food tax is a stable revenue source “through upturn and downturn” in the economy. Reducing it could cause problems in the future, he said.

Jackson said that it was ironic for the Bredesen administration to oppose the bill since the governor has said that, at some point in the future, he wants to raise tobacco taxes to provide more money for health care.

When the bill came to a vote, only five members of the 11-member committee voted for it. Six votes are needed for passage, meaning the bill is left dead in the committee as the legislative session moves toward adjournment.

Voting for the bill were Sens. Tim Burchett, R-Knoxville; Ward Crutchfield, D-Chattanooga; Jackson; Jim Kyle, D-Memphis; and Rosalind Kurita, D-Clarksville.

Voting against it were Sens. Randy McNally, R-Oak Ridge; Ron Ramsey, R-Blountville; and Douglas Henry, D-Nashville.

Sens. Joe Haynes, D-Nashville, and Mike Williams, R-Maynardville, abstained, while Sen. Jeff Miller, R-Cleveland, was absent.

The “tax swap” had been actively lobbied for by Tennesseans for Fair Taxation.

Brian Miller, executive director of the group, blamed the failure on a combination of opposition by tobacco lobbyists to an increase in the cigarette tax and opposition from a Bredesen administration “obviously committed to maintaining the nation’s highest average food tax.”

Kurita had proposed a 71 cents per pack increase in the cigarette tax, which would have brought Tennessee to the national average of 91 cents. Her bill would not have reduced the tax on food.

Kurita’s bill also failed on a 5-3-2 vote.

Tom Humphrey may be reached at 615-242-7782.
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