Protesters, no taxes at end

By John Commins Nashville Bureau

NASHVILLE -- With an anti-tax mob jeering outside the chamber and smashing windows of the Capitol, the Tennessee Senate tried to take up income tax legislation Thursday night, but the plan collapsed when the votes failed to materialize.

Instead, the Senate ended the longest session in state history when it passed, 20-9, the so-called "tobacco budget" the House passed earlier this week. The plan uses $560 million in tobacco settlement dollars to balance the ledgers, but it sets up a confrontation with Gov. Don Sundquist, who has called the plan "a likely candidate for a veto."

Before the General Assembly adjourned for the year, the House agreed to other minor amendments by the Senate and approved the budget, 72-25. But lawmakers are prepared to return Aug. 7 for a veto override session, which would require a simple majority in both chambers.

"It's been a heck of a day," said Senate Majority Leader Ward Crutchfield, D-Chattanooga. "It was close, but it all fell apart in the end. We'll be ready to be back here in August, if we have to, but I hope we won't come back until January."

Some lawmakers clearly were shaken by the hundreds of protesters, who chanted "No New Taxes" in the granite-walled lobby, banged on the heavy oak doors of the chamber and tossed rocks through windows in the governor's office one floor below. Most lawmakers said the demonstration had little effect on the collapse of the income tax talks.

Gov. Sundquist chastised the protesters.

"I appreciate the right of all Americans to free speech and peaceful protest," the governor said. "I do not, however, approve of those who advocate violence, and I regret that occurred at the Capitol. State employees, legislators and law enforcement officers should be able to do their jobs in a safe, reasonable way.

"I am particularly critical of some radio talk show hosts and at least one legislator who encouraged disruptive behavior and destructive acts," the governor said. "I hope the budget debate will continue, but in a calm and reasonable way," he said.

Lawmakers also reacted to the protesters.

"The mob didn't rule Jerry Cooper," said Sen. Jerry Cooper, D-McMinnville. "I guess everybody's got their First Amendment rights, but the person who lost today is the state of Tennessee." Sen. David Fowler, R-Signal Mountain, an opponent of the income tax, was trying to broker a last-minute deal that would have created a constitutional convention to debate the income tax, which has been ruled unconstitutional twice by the Tennessee Supreme Court.

"The people outside are protesting now without even knowing we are trying to give them a way to vote," he said.

Sen. Fowler said it was clear that his convention call was dead even before the protesters arrived, because it had virtually no support in the House.

Nevertheless, he expressed his disgust with his Republican colleague, Sen. Marsha Blackburn of Brentwood, an outspoken income tax opponent who got word to a conservative radio talk show host when she learned that income tax negotiations were under way.

Within an hour, hundreds of anti-tax protesters were mobilized around the Capitol, prompting increased security from the Tennessee Highway Patrol and Metro Nashville police, many of whom were wearing riot gear.

"It may be the activities of the talk radio people and Sen. Blackburn have forever killed the right of the people to vote on this issue," Sen. Fowler said. "She contacted the radio people to let them know we were talking about an income tax when we were talking about the right of the people to vote."

Police reported that windows in the governor's office were smashed, some by rock-throwing protesters and others from people beating on the glass with their fists.

Sen. Blackburn called the vandalism "unfortunate," but refused to accept responsibility.

"I think it is great that people show up and let their opinions be known. It's unfortunate that some of it has gotten out of hand," she said.

The protesters remained vocal throughout the session.

A big cheer went up as word spread that the Senate had passed the "no new revenue budget" and the income tax was dead.

"The people are passionate when they say no income tax," said Steve Gill, a Nashville radio talk show host who had helped organize the protests.

Demonstrator Tom Brown said the people don't want more taxes, they want responsible government.

"We need to cut spending and be responsible when spending the people's money," he said.

Tennessee is one of nine states without a broad-based income tax, but it has one of the highest sales tax rates at 6 percent, with local governments adding up to 2.75 percent.

The protesters remained to heckle the House, which met moments later to concur with the Senate action. They booed House Speaker Jimmy Naifeh, D-Covington, an income tax supporter, as he entered the chamber, and they clogged the main lobby as lawmakers tried to file out after the session adjourned.

"Let's just go out slowly and orderly if we can possibly do that," Speaker Naifeh cautioned House members.

Under the appropriations bill, which passed the House Tuesday 77-21, most of the recurring expenses funded with one-time money in the no-revenue plan would go to provide 2.5 percent pay raises to state employees and teachers, and higher education faculty members.

The approved budget cuts $356 million in spending from Gov. Sundquist's proposed $19.9 billion budget, including all of his new reading initiative. It cuts all new funding for higher education except the pay raises. It is $220 million out of balance by spending one-time money, mostly tobacco proceeds, on recurring expenses. It is expected to hurt the state's once-sterling credit rating. The budget also includes a statement that if no new revenue is found next year, the tax revenue the state shares with cities and counties would be frozen at its current level. The state would take the growth. That could force local governments to raise property taxes.

The same notice applies to $41 million in state grants for community projects. Local governments also might have to raise property taxes to fund the projects if state money was no longer available.

Among other things, the grants fund public television stations, arts commissions, school safety and economic development programs, and provide pay supplements for police, firefighters, juvenile court judges and teachers.

Senators included $400,000 to study the state's tax structure, but the House deferred spending for the study until 2003.

The Associated Press contributed to this report.