Bredesen: Employee salaries may be cut absent lifting of sales tax cap

By Andy Sher

asher@timesfreepress.com

NASHVILLE - Gov. Phil Bredesen said today the state may be forced to cut employees' salaries by 5 percent if lawmakers won't agree to his plan to lift a sales tax cap on big-ticket items in order to raise some $80 million to plug a budget hole.

"We'd probably have to do an across-the-board salary reduction," Gov. Bredesen told reporters. "And this was sitting out there as an exception that I think is not really justified by any public policy."

The governor is proposing raising the sales tax from 7 percent to 9.75 percent on single-item sales of major items costing more than $3,200. Vehicles, boats and manufactured housing would not be subject to the higher tax. But luxury items such as jewelry as well as major business purchases such as office furniture and computers would be subject to it.

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