(Editor’s Note: Over the next few weeks, State Rep. Kevin Brooks, R-Cleveland representing the 24th Legislative District, and State Rep. Eric Watson, R-Cleveland representing the 22nd Legislative District, will present their final thoughts on the work of the 107th General Assembly of the Tennessee House of Representatives. This series of legislative wrap-ups, will be provided alternatingly between the two Cleveland and Bradley County legislators. This week’s opening installment was submitted by Brooks. Next week’s will be provided by Watson).
The Tennessee House of Representatives recently concluded its work for the 107th General Assembly. By all measurements, Tennessee taxpayers will benefit from the many accomplishments of House lawmakers over the last two years. Legislators vowed to make private sector job creation the top priority for the General Assembly. Managing the state’s budget in a fiscally responsible manner was also at the top of the agenda.
The session was adjourned “sine die,” meaning “without a day specified for a future meeting” because it is the conclusion of legislative business. Each General Assembly has 90 days over two years to meet. By adjourning on the 84th day, taxpayers saved nearly $200,000.
Representatives ushered through a number of items to cut taxes, grow Tennessee’s economy, reform government and education, and fight crime. Legislators believe these initiatives reflect the will of Tennesseans and will help make Tennessee a better place to live, work and raise a family.
Speaker of the House Beth Harwell, R-Nashville, stated, “Tennesseans can be very proud of the fiscally responsible budget crafted this year. Unlike Washington, D.C., we balance our budget every year — a feat that does not come easily. In addition to these cuts, we were still able to provide more tax relief for Tennesseans than any year of my tenure, reduce the budget by 2 percent, and put $50 million away for a rainy day. We understand that when a surplus of money comes in, we should return it to its rightful owners: the taxpayers.
Throughout the summer and fall of 2011, lawmakers met with business leaders and concerned citizens about ways to remove government hurdles to economic growth in the state. The House Majority Leader, Rep. Gerald McCormick, R-Chattanooga, appointed a House Majority Small Business and Economic Development task force, charged with identifying concerns of business and community leaders and exploring ways to reduce government — thereby allowing the private sector to expand in Tennessee. The group, led by Rep. Jimmy Matlock, R-Lenoir City, ultimately produced several job growth and government reform bills lawmakers passed during the session.
House cuts taxes
for every Tennessean
During the 2010 election cycle, House leaders promised they would do everything to maintain the state’s strong financial record, balance the budget and return hard-earned taxpayer dollars to Tennesseans. Over the last two years, they have followed through on that promise. Following this session, every Tennessean will realize tax savings because of these policies.
Death tax eliminated
The 2012-2013 budget includes the first phase of the death tax elimination, which will be completed in 2016. Supporters argue that the measure will not cost the state money, and instead will boost revenues. Further, Tennessee is one of only two states in the Southeast with a death tax, forcing those affected to flee to nearby states. The full repeal will represent a $94.6 million tax cut.
Conservative lawmakers argue the death tax breaks up family farms and small businesses, forcing families to make tough decisions at what is often the most difficult times in their lives: the passing of a loved one. In many cases, families are faced with selling off parts of farms and land or closing a small, family-owned business in order to pay the tax bill. With the elimination of this harmful tax, Tennesseans will benefit and prosper.
Gift tax repealed
Going hand-in-hand with death tax elimination is the complete elimination of the gift tax this year — a $14.9 million tax cut. Tennessee is one of only two states in the nation, the other being Connecticut — that imposes a gift tax. Tennesseans are subject to it if more than $13,000 in cash or assets are gifted to, for example, a family member. As families pass land, businesses and homes down to future generations, Tennessee levied the tax on those individuals. Now, the fruits of this labor can transfer to the next generation without paying a hefty tax.
Food tax lowered
The General Assembly also reduced the food tax this year from 5.5 percent to 5.25 percent. This creates savings of $22 million for all Tennesseans. As food and gas prices continue to increase, the food tax cut will put money back in the pockets of hard-working Tennesseans. Gov. Bill Haslam and legislative leaders have vowed to further cut the tax in the subsequent years.
This is a landmark moment for Tennesseans. We believe, when government revenues are higher, that money doesn’t belong to the state, but to taxpayers and should be returned to them immediately. Our majority was placed here to balance the budget, cut wasteful spending and lower taxes. Today we carried through on that promise.”
Rep. Charles Sargent, R-Franklin, who guided the death tax repeal to full House passage, remarked, “Today is an exciting day. We looked at the numbers, rolled our sleeves up and worked with Gov. Haslam to come up with two bills that will really benefit all Tennesseans. The repeal of the death tax is especially noteworthy because it will help convince the job creators in our state to remain here and help grow our economy. This doesn’t benefit one group. It benefits any Tennessean who is concerned about job growth.”
With this action, we are ensuring families and small businesses won’t be harassed by government with harmful taxes after a loved one passes. Not only is this legislation pro-business, it is also pro-family.
The food tax cut was the responsibility of Rep. David Alexander, R-Winchester. Following the final vote on the bill, Alexander stated, “This wasn’t a partisan move. It was a move to help every Tennessean. The governor asked to work with us on lowering the food tax and this is the product of that hard work. It’s something we all can be proud of.”
These tax cuts are proof of our motto: It matters who governs. A recent study shows a repeal of the death tax 10 years ago would have grown our economy an additional 14 percent. While the previous generation of leadership failed to take action, this generation of conservative leadership is committed to charting a new path that creates jobs and limits government.