NASHVILLE, Tenn. (AP) – Reagan administration economist Arthur Laffer is urging Tennessee lawmakers not to include a cut in the sales tax on groceries as part of Republican Gov. Bill Haslam’s proposal to offset a gas tax hike.
Arthur Laffer said in a House meeting on Wednesday that bigger cuts on business taxes would do more to spur the economy. Democratic Rep. John Mark Windle of Livingston challenged Laffer about whether working families wouldn’t benefit from paying less on essential food items like baby formula.
Laffer responded that such a move would “cut the tax on my buying a steak or caviar,” and that argued that lawmakers should focus on having the greatest economic impact. (Note: He also described the grocery tax cut as “silly pandering.”)
Haslam wants to boost transportation funding by about $280 million annually, while also cutting a commensurate amount of taxes.
Further from the Times-Free Press:
On Thursday Windle rejected Laffer’s argument, saying, “I vehemently disagree with him that cutting taxes on baby formula, milk and eggs and bread for working families is a bad idea or it doesn’t help the economy.”
The Upper Cumberland Plateau lawmaker, who represents a largely rural area, added: “I don’t represent the fat cats out in Belle Meade. And I’m not really concerned about their steak and caviar. I’m worried about working families making ends meet.”
… Haslam told reporters Thursday that while he agrees with Laffer that the corporate tax cut is good for attracting businesses and encouraging existing companies to expand here, he is also trying to be even-handed when it comes to tax reductions.
“If we are going to have a tax cut, I’d like some of that to go to the one tax that everybody pays, and that’s the grocery tax,” Haslam said. “Will that bring more business to Tennessee? No. But is it fair? Yeah, I think it is fair.”
News release from the governor’s office
NASHVILLE – Tennessee Gov. Bill Haslam today thanked the General Assembly for its swift confirmation of six local university governing boards, giving the higher education institutions increased autonomy to support student success as the state continues its Drive to 55 initiative.
The General Assembly approved all 48 of Haslam’s appointments to the governing boards of Austin Peay State University, East Tennessee State University, Middle Tennessee State University, Tennessee State University, Tennessee Technological University and the University of Memphis. The boards are the result of the governor’s FOCUS Act, enacted last year.
News release from National Federation of Independent Business
NASHVILLE, Feb. 13, 2017—Tennessee members of the National Federation of Independent Business, the nation’s leading small-business association, are giving mixed reviews of Governor’s Haslam’s proposed IMPROVE Act, which includes an increase in the state gasoline and diesel taxes.
“NFIB’s policy positions are based on the direct input of our members,” said Jim Brown, state director of NFIB. “When we surveyed our members this month about the governor’s Improving Manufacturing, Public Roads and Opportunities for a Vibrant Economy Act, there really was no clear consensus, at least on the question of a tax increase.”
When asked if they support or oppose a proposed seven-cent increase in the gas tax and 12-cent increase in the diesel tax, 55 percent of NFIB members responding to the survey oppose, 40 percent support, and 5 percent are undecided.
Gov. Bill Haslam’s proposed 2017-18 budget includes an unprecedented $58.8 million in capital spending at state parks across Tennessee, leading to speculation that the administration has plans for privatization at three state park that get most of the money, reports the Times-Free Press.
That would follow the pattern set earlier when the 2016-2017 Haslam budget included major funding for Fall Creek Falls state park. Only months after the budget was adopted did the administration announce that the park’s operations would be privatized after the state spends money building a new park inn and other improvements.
“At this time, there are no active plans in place” in regards to further privatization efforts at those three parks, Paris Landing, Pickwick Landing and Henry Horton, said a Tennessee Department of Environment and Conservation spokesperson in an email Friday.
Elected leaders from those park areas polled this week — all in Middle or West Tennessee — also said they have not been told if the state plans to pursue privatization at their parks. But each were familiar with the concept after a 2015 attempt to outsource hospitality operations at 11 state parks that failed because of the facilities’ poor conditions.
…(State Sen. John) Stevens’ district includes Henry County’s Paris Landing State Park, which is set to receive $23.07 million for the demolition of its inn and construction of a new inn that would include conference space and a restaurant.
He said he supports rebuilding the inn and is thankful for the administration’s proposed investment, adding that locals are interested in having input in the facility’s design.
“I have spoken to our local chamber and there is support in the community for the new building coupled with concern, privatization being one,” Stevens said.
…Marshall County’s Henry Horton State Park would receive $10.05 million under the proposed budget for the demolition of the inn, visitor center, and restaurant there. The money would also pay for the construction of a new visitor center and restaurant, but not another inn.
…An inn would remain part of Pickwick Landing State Park in Hardin County under the proposed budget. Nearly $12 million would be spent to renovate the current facility, which includes a conference center and restaurant.
House Speaker Beth Harwell says she could support some fuel tax increases for new road spending, provided the state’s gas and diesel taxes don’t exceed the highest rates in the eight surrounding states, reports the Times-Free Press. But it seems the way she initially phrased her remarks left some questioning whether that standard would be violated by Gov. Bill Haslam’s proposal.
During a Tuesday question-and-answer session with independent business owners, Harwell said “what we need to be careful of is that we never want to have our gas tax higher than the states around us, and never want to have our diesel tax higher than the states around us.”
In response to subsequent comments from reporters that Tennessee’s existing gas and diesel taxes already exceed some adjoining states’ rates, Harwell spokeswoman Kara Owen on Wednesday clarified the speaker’s remarks, saying Harwell “was referring to not wanting to be higher than the highest states around us.”
That’s an important distinction. Haslam is proposing raising the current 21.4-cents-per-gallon gas tax by 7 cents and boosting the existing 18.4 cents on diesel by 12 cents.
According to the American Petroleum Institute, Tennessee’s gas tax, which hasn’t been raised since 1989, is the third lowest of the nine states when other fuel-based taxes and fees are included.
If Haslam’s proposal is approved, which is far from certain, Tennessee’s resulting 28.4 cents tax on gas would be the third highest among the states, exceeded only by Georgia (31.1 cents) and North Carolina (34.6 cents).
The speaker’s comments Tuesday were Harwell’s fullest yet on the fuel tax increase proposal and transportation funding.
… Tennessee’s current diesel tax rate is tied with Mississippi as the second lowest among the nine states. If Haslam’s proposal were approved, the resulting 30.4 cents per gallon on diesel would make Tennessee’s rate the third highest, behind Georgia (34.2 cents) and North Carolina (34.6 cents).
Gov. Bill Haslam said Monday that the state’s move to require all major online vendors to collect sales taxes on purchases made in Tennessee has drawn a legal challenge, reports the Associated Press.
Under current federal law, online retailers can only be required to collect sales taxes if they have a physical presence in the state such as a store or office there. Consumers ordering from out-of-state retailers are technically required to pay the tax to the state Revenue Department, but few do.
Haslam’s tax rule seeks to extend the requirement to collect the tax to any retailer with sales of more than $500,000 per year in Tennessee. The rule is similar to efforts that have fallen short in Congress.
…The Republican governor says the legal challenge was filed late last week after the state sent out notices to companies about the change.
“We figured when we passed that that we would be sued ,” Haslam told a Republican gathering in Nashville. “We have been sued.”
Haslam spokeswoman Jennifer Donnals later clarified that the challenge was filed in the form of an administrative proceeding before the state Revenue Department. The identity of the petitioner and the petition itself are covered by state confidentiality laws, she said.
Haslam said he hopes the U.S. Supreme Court ultimately gets an opportunity to revisit the out-of-state sales tax rules for the first time since 1992, which came before online commerce was as prevalent as it is today.
“We think the world’s changed,” Haslam said.
News release from the governor’s office
NASHVILLE – Tennessee Gov. Bill Haslam today announced Jayme Place Simmons will join his senior team as special assistant to the governor for strategy and policy director as Stephen Smith becomes senior advisor to Haslam, serving as a top advisor and strategist for the administration and assisting the governor with day-to-day activities.
Simmons, who currently serves as chief of staff for the Tennessee Department of Education, is returning to the governor’s office where she previously served during his first term as an education policy analyst. Simmons starts her new position on February 13.
As proposed, Gov. Bill Haslam’s transportation funding package would eliminate 57 positions dedicated to enforcing drunken driving laws by district attorneys general staff across the state. The Times-Free Press reports the governor is open to address the resulting concerns of prosecutors.
The provision in question in the governor’s legislation, which would also raise fuel taxes, would outlaw open containers of alcoholic beverages in cars on the road. Because Tennessee doesn’t already have an open container prohibition, $18 million in federal highway funds cannot be used for road construction and maintenance and instead goes to other programs – including $6.5 million now used for special DUI prosecutors, training and police overtime for DUI enforcement. With passage of the governor’s plan, all $18 million would be shifted to road construction.
“We’re aware of that,” the governor said last week. “We fund some DUI [enforcement], DAs through that. We’re willing to look at other ways to make sure that function gets paid for. We realize that’s critical.”
…Jerry Estes, former 10th Judicial District attorney general and now executive director of the Tennessee District Attorneys General Conference, recently said DAs in 25 of the state’s 31 judicial districts rely on the funding. He said prosecutors are hoping to work something out.
“Our concern is 57 positions that would be lost if they’re not funded another way,” Estes said. “And what those 57 positions do, they’re very involved, of course, in prosecuting DUIs and vehicular homicides.”
Moreover, Estes said, the money also helps train sheriffs, police departments, the Tennessee Highway Patrol and other enforcement agencies to combat DUI and impaired driving.
“Tennessee’s DUI deaths on the highways have gone down greatly since these programs have been in place,” said Estes, who called them “very crucial” to that success.
…Rep. William Lamberth, R-Portland, a former prosecutor, said the $18 million, including the $6.5 million that now goes to prosecutors, needs to be replaced.
“If we can take $18 million out of the general fund and allocate that towards safety, specifically toward 57 positions in the district attorneys’ offices, officer overtime, roadblocks and advertising to combat intoxicated driving, I think that’s a great solution,” Lamberth said.
Haslam said “not having the open container law has meant that the federal government’s telling us how we can spend that $18 million.”
“I think we should choose how we spend that and then to decide do we want to fund DUI, DAs another way,” the governor said. “But in the meantime, money that should be going to roads should be going to roads.”
Gov. Bill Haslam is concerned that legislators are sending the wrong message with a bill requiring state officials to stamp the words “Alien” or “Non-U.S. citizen” on Tennessee driver’s licenses issued to persons without permanent legal status to live in the United States, reports the Times-Free Press.
Tennessee ranked No. 1 last year in job creation from direct foreign job investment. Haslam fears such a law risks sending the wrong signal to companies like Volkswagen and Nissan, which have huge presences in Tennessee and whose executives often visit on federally issued temporary work or travel visas.
“We have a lot of people who are here that we’re glad they’re here,” the Republican governor said, adding he hasn’t yet seen the legislation.
“Volkswagen, Nissan — and I could keep on going. We have more foreign investment from Japan than any other state in the country other than California. We don’t want to create something that would damage that,” he said.
The bill’s sponsors are Rep. John Ragan, R-Oak Ridge, and Sen. Ed Jackson, R-Jackson. (Note: It’s HB222.)
The Tennessean’s report notes that, under current law, people who are not Tennessee residents can get only a temporary license that can be distinguished at a glance from a permanent license. It also includes comments from Ragan:
“The 19 hijackers from 9/11 were here on overstayed visas, so this is just intended to be another way of ensuring that we catch that if we can,” he said.
Ragan called his legislation an extra step in terms of safety.
“You never put just one barrier out there to stop an enemy, you put as many as you can,” he said. “This is just an additional check out there. It’s not intended to be anything onerous but it is intended to be a little more obvious.”
…Ragan said he didn’t see any controversy behind the use of the word “alien” or “illegal alien.”
“That means a stranger who is in our country in violation of the law,” he said. “The sensitivities and micro-aggressions and all the other stuff that goes on around here mystify me.”