Lawmaker criticizes Tennessee tax breaks for wealthy 'fat cats'

Lawmaker criticizes Tennessee tax breaks for wealthy 'fat cats'

February 23rd, 2017 by Andy Sher in Local Regional News

In this April 13, 2016 photo, Tennessee Gov. Bill Haslam talks with reporters in Nashville, Tenn. (AP Photo/Mark Humphrey)

Photo by Associated Press /Times Free Press.

NASHVILLE — Opponents' attempt to race ahead of Gov. Bill Haslam's proposed gas tax increase ran off the road in a House panel on Wednesday when their effort to move a rival road-funding bill first ended in an abrupt adjournment of the panel.

It effectively stalls any action for at least a week on either Haslam's bill or the alternative pushed by House Assistant Majority Leader David Hawk, R-Greeneville.

Haslam later told reporters he thinks it shows representatives remain undecided on how to address what he says is a $10.5 billion backlog of nearly 1,000 highway and bridge projects across Tennessee.

"We've said all along this was going to be a long path and it would involve a lot of discussion and the bill could take different forms at different times," Haslam said. "But we're not discouraged by this at all."

Earlier Wednesday, Transportation Subcommittee Chairman Terri Lynn Weaver, R-Lancaster, an opponent of Haslam's fuel tax, took up Hawk's rival legislation out of order.

Others wanted Haslam's bill to go first and believed Weaver's intent was to move the Hawk bill out without an amendment that included the governor's proposal. They favored moving out Haslam's bill with a Hawk amendment at the very least.

Hawk's approach avoids any tax increase at all and instead diverts a quarter percent of the existing 7 percent sales tax into Tennessee's highway fund.

After hearing from trucking industry officials who favor Haslam's plan, Weaver called up Hawk's bill out of order from the calendar of measures to be considered.

"We're going to go a little bit out of order here and keep you guys at the tip of your seats," Weaver said.

John Mark Windle

John Mark Windle

Photo by Contributed Photo /Times Free Press.

But Rep. John Mark Windle, D-Livingston, quickly jumped in with a proposed amendment to Hawk's bill. A critic of the state's 5 percent sales tax on food, Windle's verbal amendment called for removing the tax on purchases of baby formula.

Weaver ruled Windle's amendment out of order, noting

the deadline for amendments had passed Tuesday afternoon. Windle responded with a motion to adjourn. It's a non-debatable motion. After some initial confusion, the committee finally voted and it was 5-3 to adjourn.

Windle was unapologetic.

"The state of Tennessee has been giving tax breaks to the wealthiest Tennesseans," he told reporters later. "And tax breaks are good for everybody."

But with non-fuel tax revenues in the state's general fund — which pays for most other areas of state government outside transportation — hitting record surpluses, Windle added, "If we're going to give tax breaks to the richest Tennesseans, then why shouldn't working people who get up and go to work every day get a tax break on baby formula?

"Why shouldn't working families get a part of it?" Windle added. "Why should I apologize for representing people who get up and go to work every day? Why should it be people who are at the top of the food chain? Why shouldn't somebody who actually has children going to work every day get a tax cut?"

Weaver, who voted against the adjournment motion, later called Windle's maneuver a "surprise."

Asked why she'd called up Hawk's bill out of order, Weaver said, "I do that a lot. Sometimes — I'm the chair, I can steer it anywhere I want to. I was looking for Jason Zachary, I couldn't find him. He had a bill on there too."

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Zachary, R-Knoxville, had yet another road funding proposal.

House Transportation Committee Chairman Barry Doss, R-Lawrenceburg, who is carrying Haslam's bill, said, "We were about to get the governor's bill out today. But evidently there were some people who were uncomfortable, maybe, with the Hawk plan. And they weren't ready to vote on the Hawk plan."

Doss said he believes "there's a lot of people uncomfortable" with Hawk's bill. "We come back next week and I think more people are comfortable with the governor's plan."

Several longtime Capitol Hill observers had different views on whether Wednesday's 5-3 vote for adjournment was a test vote for the Republican governor's plan.

The governor's IMPROVE Act seeks to raise the current 21.4-cents-per-gallon gas tax by 7 cents and the existing 18.4-cents-per-gallon diesel tax by 12 cents. It would be the first increase in nearly 28 years.

Haslam argues the money is needed to bolster transportation funding in a growing state where existing taxes are worth only about half of what they were in 1989, the year of the last increase, because of rising costs of asphalt, concrete, metal and labor. Meanwhile, the Haslam argument goes, vehicles get better mileage than they used to.

In addition to the fuel tax increase, Haslam is proposing other fees and taxes for a total of $278.5 million in new revenue for the state and $113 million in new funds for cities and counties.

Because general fund taxes are booming — the state has a one-time surplus of $1 billion and an estimated $950 million in recurring money, 50 percent or more of what it usually sees — Haslam is recommending cuts in the state's sales tax on food, as well as reductions in corporate taxes for manufacturers and accelerated phasing out of a tax on dividends and interest.

Add them all up and they amount to about $270 million in cuts.

The food tax cut recommended by Haslam is $55 million. Democrats like Windle say that's not enough of a reduction for working Tennesseans. Hawk's bill has no reductions at all in sales tax.

Windle said he doesn't know which bill he'll support, if any, because he doesn't know what they ultimately will contain.

"I don't think I should have to apologize because the fat cats don't get all the goodies," he said. "Should the rich people out in Belle Meade get everything from Tennessee? Shouldn't somebody from Celina get something?"

Weaver's subcommittee is widely seen as the hardest lift for Haslam's proposal in the GOP-controlled General Assembly.

Earlier on Wednesday, Middle Tennessee State University released a new poll of 600 Tennesseans that found 38 percent of registered voters back Haslam's plan, while 28 percent oppose it. Thirty-three percent told pollsters they weren't sure. MTSU's survey has a margin of error of plus or minus 4 percentage points.

The poll found that support for Haslam's proposal rose to 51 percent among those familiar with his plan. Thirty-one percent remained opposed.

Among those who said they didn't know much about the governor's proposal, support and opposition were evenly split at 24 percent.

Contact Andy Sher at asher@timesfreepress.com or 615-255-0550. Follow him on Twitter @AndySher1.


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