Republicans reject plan to lift sales tax cap

Thursday, April 15, 2010 at 2:12pm

Lt. Gov. Ron Ramsey vowed Thursday Republicans will reject Gov. Phil Bredesen’s proposal to balance the state budget by lifting the state’s sales tax cap on purchases of more than $3,200.

Ramsey said Senate Republicans will present their own alternative plan making new cuts in state spending. He wouldn’t rule out an across-the-board cut in state employee pay.

Ramsey agreed more spending cuts will be painful, but he said: “Go out in the real world where people have 10 percent unemployment, where they’re worried about their job tomorrow, where they can barely get by, and tell them that cutting another 3 or 4 percent out of state government is painful. I think people understand that we need to be living within our means.”

The governor unveiled his proposal in a private meeting with legislative leaders Wednesday. It would exclude vehicles, boats and manufactured homes, but apply to luxury items like jewelry and furs and also to office furniture, computers and other equipment purchased by businesses.

Purchases of items exceeding $3,200 already are taxable at the 7 percent state rate. The new proposal would add another 2.75 percent to the purchase of single items exceeding $3,200. It would raise $85 million to plug the state’s latest budget shortfall.

To reporters Thursday, Bredesen challenged Republicans to present other ways to balance the budget. He said lawmakers probably would have to cut state employee pay if they refuse to go along with his plan.

“I guess I’d say to anyone, not specifically to Speaker Ramsey but to anybody, look these are difficult times and you can’t just say ‘no’ to everything,” the governor said. “At some point, you’ve got to decide what it is we’re going to do to get through these things. I’ve put a path forward that relies primarily on cuts, has a couple of revenue enhancements in it that I think gets us through. If the legislature wants to handle this in some different way, that’s certainly their prerogative. But it has to be handled.”

In response later, Ramsey said: "Absolutely, I do anticipate making more cuts. This bill as presented would take $85 million out of the economy and mostly from small businesses that buy those backhoes and Bobcats to create jobs and bring it to the state treasury. It couldn’t be worse timing. I think we’ll find alternatives, I do.”

Ramsey said Republicans were “shell shocked” when Bredesen first told them his plan “because he’d gone this far without raising taxes, but obviously, as he’s going out of office he’s changed his mind.”

25 Comments on this post:

By: cegrover on 4/15/10 at 1:29

We need the spending cuts, not additional taxes that will squelch spending and, potentially cost us more jobs.

By: titanmancanwin on 4/15/10 at 1:45

raise em on up...other than vehicles, how many items are purchased day to day that cost more than $3200.00. People without jobs certainly arent paying that for anything...

By: EquinsuOcha on 4/15/10 at 2:28

Because I have a job I should pay more taxes?!?...........liberal logic,gotta love it

By: richgoose on 4/15/10 at 2:38

The Republicans represent a minority of highly productive people. They are a diminishing group in this country. We do however appreciate everything the Republicans are doing to slow the socialist takeover of this country.

By: nashtnman on 4/15/10 at 2:53

If you want to solve the budget problems simply remove all churchs from tax exempt status. Everywhere you look now there is a "Fort God". Churchs say they help the public so let them start paying taxes like the rest of us THAT WORK.

By: idgaf on 4/16/10 at 2:59

Yo Phil dump your pre K / pre school entitlement which you should naver have started in the first place.

By: michael thomas on 4/16/10 at 6:06

idgaf i agree with you. This is nothing more than a baby sitting course. A majority of the so called teachers have assitants and all they do is let them sleep and go outside and play. The teachers makes $32,000 or more the assistant makes $23,000 to 28,000 sitting on there fannys. Must be nice.

By: Kosh III on 4/16/10 at 7:13

Remove all the sales tax exemptions.
Tax all sales: lawyer fees at $300 per hour would rake in a nice sum.
Accountants, architects also.

Some agricultural products are exempt from sales tax while others are not. It just depends on which type of ag has the most money to spend on the legislature.

By: JohnGalt on 4/16/10 at 8:05

During this recession, employees in every private sector have taken pay cuts. Why should public employees be exempt from this cost-saving move?

By: DebaserTN on 4/16/10 at 8:40

michael thomas, are you the director of Pre-K in Metro to know that the *majority* of "so-called teachers" just let their kids sleep and go outside? If so, why don't you do something about it? I doubt you are any more than you know the majority of pre-k teachers -- the ones I know work those fannies off only to deal with (some) entitled parents on one side and ignorant attitudes such as yours on the other. Really two sides of the same lazy coin of non-intelligence. It would really benefit you to know what you're talking about before you start talking if you care when you sound like a fool.

By: localboy on 4/16/10 at 8:41

The Republicans represent ...high... people. They...diminish... group(s) in this country. We do ...(not)... appreciate everything the Republicans are doing to...takeover...this country.
Just as valid a statement as the original.

Kosh III has it right - remove all sales tax exemptions - excluding vehicles, boats and manufactured homes gives an indication of which groups had the most influence in drafting this proposal.

By: michael thomas on 4/16/10 at 8:52

Debaser i see it evrytime i volunteer to help at the schools so now you get it right.

By: calpalntn on 4/16/10 at 9:40

By: JohnGalt on 4/16/10 at 9:05
During this recession, employees in every private sector have taken pay cuts. Why should public employees be exempt from this cost-saving move?

Mr. Galt, "Public employees" HAVE taken pay cuts just like the private sector. I have not had a pay raise in 3 years, yet my cost of living has increased just like yours, my insurance rates have averaged a 4% increase YEARLY, and we all know about gas prices. Staffing has been cut so severely that I now do several peoples jobs in addition to the job I was hired for WITHOUT additional compensation. And 'joe Q public" will be the FIRST to gripe when he/she has to wait just a lil bit longer in line for a 'public employee' to assist on them. So we DO our share of pay cuts, overwork just like the private sector.

By: Dragon on 4/16/10 at 9:48

Sad to say, but the first thing should be to cut non-essential services. That may mean closing parks, museums, libraries, etc. and people will lose their jobs. When the economy recovers and revenues increase, then these services can be reinstated.

Adding additional burdens to the general public by raising tax rates and bases to increase revenues is not acceptable. The government and public are linked and one should not improve at the detriment to the other.

By: gdiafante on 4/16/10 at 10:21

"During this recession, employees in every private sector have taken pay cuts. Why should public employees be exempt from this cost-saving move?"

Shows your ignorance, many state employess haven't even received a COLA increase in the past three years.

Want to save money, cut the salaries of elected officials by 10%.


By: JohnGalt on 4/16/10 at 11:07

Obviously some posters here have the well-known congress syndrome and equate no raises with a cut. No raises is not the equivalent of a cut. When you see a smaller number on your paycheck...that's a cut.

Now go cry to those private sector employees who have seen a real cut.

By: gdiafante on 4/16/10 at 11:26

For John: Same pay + higher insurance = smaller number on your paycheck...that's a cut.

Thanks for playing.

By: JohnGalt on 4/16/10 at 11:54

You are obviously and loose with facts you don't understand.

I am deadly serious.

You may now go back to play with your circle of jerks.

By: gdiafante on 4/16/10 at 12:07

No, I was using your words to prove you incorrect. It's not my fault if you can't comprehend your own rhetoric. Maybe Dagny can help you out.

By: Kosh III on 4/16/10 at 1:04

Lots of posters seem to lack compassion, yet if they were facing a paycut they would expect(rightfully so) sympathy and support.
So much for "compassionate conservatism."

Just because "private" businesses treat it's employees like crap does not mean that should be the standard. Private enterprise is not perfect and often not even efficient or profitable.

By: idgaf on 4/16/10 at 3:39

When are you going to learn the more money you give them the more they will spend.

When he was Mayor phil on tape said The government never has enough money.

By: pswindle on 4/16/10 at 8:05

Let all of the tax exempt businesses and churches pay their fair share of taxes. You do not know what you ae talking about, pre-k is the best thing that has been added to education. Get them early and you have them. By K the students are well adjusted and ready to learn. Talk to an educator before you make statements that you know nothing about. The GOP does not care to help anyone but themselvees.

By: idgaf on 4/17/10 at 5:13

pswindle you are an enabler. You do not help them to get more money to spend you try to get them to spend responsibly like we have to do.

By: Strider on 4/17/10 at 10:30

The government beast will always crave more in taxes. It is time to "Yes" to limited government and put a stop to such increases.

By: localboy on 4/20/10 at 8:17

"Ramsey said Republicans were “shell shocked” when Bredesen first told them his plan “because he’d gone this far without raising taxes, but obviously, as he’s going out of office he’s changed his mind.”"
Too bad we didn't have this leadership during the Sundquist administration.