The budget for the state of Tennessee has now been adopted as it was finalized and passed by the Senate and the House of Representatives. The budget is complicated by the fact that it includes federal tax dollars for state expenditures. The total state budget for 2010-2011 is $29.9 billion. For the 2002-2003 year, the total state budget was $20.4 billion. Thus, we have seen our state budget grow tremendously.
Tax Increase
The Bredesen administration inherited 1.2 billion new tax dollars in January of 2003. The administration has proposed and gotten tax increases each and every year except for this year. The point is our state has continued to expand new programs during the past eight years. Rather than investing in what we are required to fund (such as K-12 education, roads, economic development, law enforcement, courts, etc.), we have created new entitlement programs that have created new constituencies and employees. The programs have cost the state many of our new tax dollars that could have gone to the essentials of state government rather than to new programs.
The Impact
2011 will bring a new governor with the following dilemma: Tax dollars that have been spread too far in an attempt to pay for both essential and nonessential government programs. Now we are at a crossroads that many in Nashville have been quietly steering our state to. The crossroad is either eliminate or reduce spending (which is the option that I have argued for and continue to support) for these newly created programs or create new sources of tax revenue. To date, the Legislature has failed in mustering enough political will or courage to reduce or eliminate many of these new programs that have been pushed by advocates as well as the administration.
Upon review of action in creating and increasing taxes over the past 10 years, our state is growing government by adding new programs that will demand additional revenue. Accordingly, those that support a state income tax have the state budget where they want it to be financially. Programs will require new funding if for nothing else but for the cost-of-living increases. The point again is that the Legislature has been great at creating new programs, but we have been unable to reduce funding or eliminate these programs that have been created when we do not have the revenue available to fund them. Thus, the state will soon find itself in a position where it is going to need a new source of revenue.
So what does the state do for a new source of revenue?
Options
An open and public push for a state income tax will return. Regardless of your position, you should be prepared, educated and ready to address this issue with your state legislators and our governor. It is my belief that at the end of the day we cannot continue to grow government at the rate that we are growing it without additional new revenue. The primary source for tax revenue for the state is our state sales tax and I do not see a sales tax increase as a feasible alternative. Thus, those who favor a state income tax have navigated our state into a position where we must make a difficult choice. The choice will be between eliminating and reducing spending for government programs or creating a new source of revenue which will be a push for the state income tax. The table has been set and the income tax issue will most assuredly return.
If you wish to contact me my information is as follows:
Email: sen.dewayne.bunch@capitol.tn.gov
Legislative Toll-Free Number: 1-800-449-8366, ext. 3730
Legislative Address: 9 Legislative Plaza, Nashville, TN 37243
My assistant, Tonya Morelock will be happy to assist you in any way.
