Tennessee Gov. Bill HaslamWith the start of a new session of the Tennessee General Assembly, Gov. Bill Haslam has spelled out a series of important issues he would like lawmakers to take up, ranging from education to efficiency in state government.
One of the most vital subjects he wants to see addressed is taxes. He has proposed reducing the sales tax on food from 5.5 percent to 5.3 percent, with the aim of dropping it to 5 percent within three years. That would directly benefit virtually all Tennesseans.
He also wants to raise the exemption on the death tax on estates from $1 million to $1.25 million. The tax is unjustly imposed when a person dies -- on assets that have already been taxed. But there is also a practical economic reason for exempting more of a person's assets from the death tax -- and for eventually doing away with the tax entirely. As the governor noted recently, by imposing a death tax, Tennessee is "literally chasing capital away from the state."
While there may be a short-term reduction in state revenue from reducing the death tax, one study suggests that Tennessee actually lost $7 billion in tax revenue over the past decade because of the death tax, which drives some retirees and potential economic development to more tax-friendly states, such as Florida.
Because of the death tax, "People are starting businesses other places besides here," the governor said.
Haslam has not, for now, proposed further rolling back Tennessee's Hall income tax on bond interest and stock dividends, but he did express interest in doing so at some point. "I'd love to address the Hall tax, particularly for senior citizens below a certain income level," he said.
We believe dealing with the Hall income tax would be a good idea -- and sooner rather than later.
Another of the governor's key proposals is to make state government more efficient and cost-effective. He would like, for example, to have the Tennessee Regulatory Authority, which oversees telecommunications and utilities, led by a few part-time officials and one full-time executive, rather than by multiple full-time directors earning large salaries.
In addition, he wants a revamp of what he called the "archaic" system of hiring state employees, which he said moves too slowly and often makes it hard to get the best workers for various positions. He is also troubled by appeals processes that can drag out for months on end when a government worker faces termination.
He noted, too, that the hundreds of boards and commissions in state government often become "an unaccountable fourth branch of government," and he said he wants to address that.
On education, the governor would like to see school districts have more flexibility to pay higher salaries to teachers in tougher schools or to those who teach vital subjects such as math.
And on the issue of crime, the governor reasonably proposes a number of measures, including tougher sentencing for gang-related crime and mandatory jail time for repeat domestic violence offenders.
Of particular note in Chattanooga and the surrounding area, the governor voiced interest in state-funded incentives that might help persuade Volkswagen's luxury brand Audi to begin production at Enterprise South industrial park. VW has already made a splash with excellent sales of the Chattanooga-made Passat, and it would be of great benefit to our city if Audi set up shop here as well.
Citing the success of the Passat, Haslam said Chattanooga may be able to lure Audi because "There's nothing that sells quite like a great track record."
We hope our city will see an expansion of operations at the VW plant, and we hope the governor's worthwhile legislative goals succeed.