It’s safe to say Tennessee Gov. Bill Haslam had concerns about each of the three new laws that took effect Friday, one with his signature and two without it.
The one he signed, the phasing out of the Hall Income Tax, is one he has long supported in theory. The two he didn’t, one which directs the state to sue the Obama administration over its federal refugee resettlement program and the other which defunds the University of Tennessee at Knoxville’s diversity office for a year, became law without his signature.
* The Hall Tax punishes people who have sacrificed and saved and is levied most heavily on retired people. As such, it can both discourage retirees from staying in Tennessee and discourage others from relocating here for their later years.
For the better part of two decades, conservatives have sought to reduce it, revise it or eliminate it.
The problem stems from the 1931 and 1937 updates of the 1929 law, which allocated part of the revenue to local governments – three-eighths of the 6 percent tax on interest and dividend income. Now those municipalities have been enjoying, and relying upon, that revenue stream for the better part of a century. They’ll lose about $14 million next year, and the state will see a reduction in the neighborhood of $28 million.