taxes

Alexander and Corker on Trump and pending tax overhaul

Congressional Republicans involved in crafting a federal tax overhaul are bracing for President Trump to potentially disturb their negotiations at any moment, as he has done throughout his nine months in office and this week on a bipartisan Senate agreement to shore up Obamacare insurance markets, reports Politico.

“Sure, it’s going to come,” said Sen. Bob Corker (R-Tenn.), who’s been the target of his share of tweets from the president.

Sen. Lamar Alexander (R-Tenn.), who brokered the health agreement that Trump has shifted between criticizing and praising, added that he had already told the president that his staying on track on tax reform could be key to getting a landmark achievement.

“If the president of the United States focuses on one thing, with everything he’s got, for as long it takes, he can usually get what he wants,” Alexander said.

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$2.5B in annual TN business subsidies, outcomes often unknown

Tennessee state and local governments provide more than $2.5 billion in subsidies such as grants, tax breaks and tax credits to businesses each year, but there’s often little public information provided on whether the taxpayer money is working to produce promised jobs.

That’s the bottom line of reporting by the state’s four largest newspapers  — The Tennessean, The Commercial Appeal, Knoxville News Sentinel and (Chattanooga) Times Free Press — published this weekend.

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Wheel tax referendum fell short on valid signatures in Hawkins County

A petition drive seeking a special election to consider repeal a recent $40-per-vehicle increase in the Hawkins County wheel tax fell 127 signatures short of the number required, according to the Rogersville Review. Indeed, county Election Administrator Donna Sharp says there were more invalid signatures than valid. Advocates needed 1,095 valid signatures.

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Petitions filed to hold vote on Hawkins County wheel tax increase

Petitions were submitted Monday calling for a referendum on whether a $40-per-vehicle wheel tax approved by the Hawkins County Commission will stand, reports the Rogersville Review.

The Commission had rejected the increase in a initial vote earlier this year, but then approved it after Jason Mumpower, deputy state comptroller, warned the officials that failure to enact a balanced county budget by July 1 would mean a state takeover of county finances.

Hawkins County Elections Administrator Donna Sharp says that, if the petitions contain enough valid signatures, a special election will be scheduled within 90 days at a cost of $70,000 or so.

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Corker criticizes investment tax cut in GOP health care bill

Sen. Bob Corker has drawn national media attention with criticism of the Senate Republican health care bill for cutting taxes on the wealthy while reducing benefits for the poor. But  the Tennessee Republican tells the Times Free Press that he thinks Republican leaders are agreeable to removing the $372 billion investment tax break.

“It’s been an issue for some time, and I just don’t think it’s sustainable to look at lowering taxes on the wealthy and at the same time placing a greater burden on low-income citizens that are on the exchange,” the former Chattanooga mayor said in an interview. “I feel it’s going to be resolved, and I think that will be a very good step forward.”

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Feds file $140K lien against former Rep. Joe Armstrong’s property

The federal government has filed a $140,000 lien against property owned by former state Rep. Joe Armstrong to collect fees and restitution in his criminal tax case, reports the News Sentinel.

The lien includes any property Armstrong owns, according to Nick McBride with the Knox County Register of Deeds. Property records show that in addition to his $426,200 Holston Hills home, Armstrong owns a Selma Avenue house worth $34,900 and co-owns a $6,000 parcel on Plymouth Street.

The lien was filed Feb. 2, one week after a judge ordered Armstrong to pay a $40,000 fine and $100,000 in unpaid taxes to the Internal Revenue Service for filing a false tax return.

McBride said liens for restitution and fines are not uncommon in court cases like this.

When asked Tuesday if he had made any payments on his fines and restitution, Armstrong declined to answer.

February state revenue $21.1M above budget projections

News release from Department of Finance and Administration

NASHVILLE, Tenn. – Tennessee tax revenues exceeded budgeted estimates in February. Department of Finance and Administration Commissioner Larry Martin today announced that overall February revenues were $846.7 million, which is $28.4 million more than the state received in February 2016 and $21.1 million more than the state budgeted. The overall growth rate for February was 3.48%.

““The state experienced better sales tax revenues than expected for February,” Martin said. “Receipts were in excess of the budgeted estimate. Franchise and Excise taxes recorded negative growth for the month and were also less than budgeted estimates. Nonetheless, the strong sales tax growth pushed total revenues for the month higher than budget expectations.”

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TN business incentive tally: $2.5B per year (double national average)

 

A study by the W.E. Upjohn Institute for Employment Research indicates Tennessee state and local governments provide more than $2.5 billion in business incentives annually. That’s nearly 1 percent of the state’s private-sector gross domestic product and makes Tennessee fourth highest in the nation, the study’s author, Timothy Bartik, tells The Tennessean.

In exchange for taxpayer support, businesses are expected to generate jobs and spur economic growth. State and local leaders point to success stories — new companies attracted by economic development packages. But there’s an inherent trade-off for the taxpayer. Grants and tax revenue could instead be directed to improve schools, fix crumbling highways and other key government functions.

The analysis, “A New Panel Database on Business Incentives…in the United States” leads to some key questions: how much is enough? And are the incentives designed to attract well-paying jobs, or dead-end work with little or no benefits? (Note: You can download a copy HERE.)

Bartik, a senior economist at the Michigan-based think tank, found that states with high levels of incentives don’t have significantly better economic performance than their neighbors.

“If incentives have an effect, it’s at best relatively modest,” he said.

Compared with neighboring states, Tennessee leads the way. Incentive levels are 91 percent lower in Virginia, for instance, and 82 percent lower in Georgia. As of 2015, Tennessee’s incentives are 105 percent higher than the national average.

The state stands out for its property tax abatements, the analysis found. In these deals, local governments typically agree to forgo property taxes if a company commits to creating a certain number of jobs and investing a certain about in capital. Because companies make annual payments in lieu of taxes, the arrangements are called “PILOTs.”

Two wildfire response bills clear Senate

News release from Senate Republican Caucus

NASHVILLE — Two bills designed to help Sevier County rebound from the devastating November wildfires passed unanimously in the State Senate on Monday. Senate Bill 964, sponsored by Senator Doug Overbey (R-Maryville) gives local governments the authority to go on private property at the request of the property owner to clean up debris. Senate Bill 114, sponsored by Sen. Overbey, Senator Steve Southerland (R-Morristown) and Senate Majority Leader Mark Norris (R-Collierville), allows a local governing body, by a two-thirds vote, to provide tax relief on real and personal property damaged by the wildfire.

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Veterans renew lobbying to restore cuts in state tax relief program

A bill has already been filed for the 2017 legislative session that would restore a cut in the state-funded subsidy of local property taxes paid by military veterans and The Tennessean has a report on veterans who will be lobbying for passage of the measure in a year with huge budget surpluses.

The bill (HB5) by Rep. John Ragan, R-Oak Ridge, himself a veteran, declares that veterans can get property tax relief on the first $175,000 in value of their homes. After the cut – pushed by Gov. Bill Haslam’s administration and the state comptroller’s office because of rapid growth in the cost of the program – the subsidy applies to only the first $100,000 in value.

It’s been a hotly-debated topic for three years. Legislators last year added close to $1 million in funding for the overall program beyond what was allocated in Haslam’s budget (low income elderly and disabled persons are also eligible for a state subsidy), but didn’t change the value cap for veterans.

As many as 16,700 disabled veterans and their surviving spouses received $12.1 million in benefits via the tax relief program during the 2015-16 tax year, which is the most recent data available. The year before, about 15,900 disabled veterans and their surviving spouses received $8.5 million in benefits.

By comparison, 133,400 low-income elderly and disabled residents received about $20 million in benefits in the 2015-16 tax year.

… The effort to undo the changes to the tax relief program is the No. 1 priority, says Barry Rice, president of the Tennessee State Council of the Vietnam Veterans of America.

“On a scale of one to 10, it’s about an 11 or 12,” he said.

Despite lawmakers’ promises of additional change to the program, Land remains skeptical.

Land says the state’s public officials are playing political football with the men and women who have risked their lives by serving their country. He points to the amount of federal money that the state’s veterans bring to Tennessee to underline the sheer economic value they bring to the state.

Land also said he finds it disheartening to see veterans’ property tax relief being scrutinized when the state has a surplus and teachers and public employees have been receiving raises.

“Give me a break,” he says. “This is just shoving stuff down our throats.”

ABOUT THIS BLOG

Former Knoxville News Sentinel capitol bureau chief Tom Humphrey writes about Tennessee politics, government, and legislative news.

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