Tax hike, school funding in works

Hank Hayes • Apr 21, 2007 at 12:42 PM

KINGSPORT - Both Tennessee Gov. Phil Bredesen and Lt. Gov. Ron Ramsey predicted Friday that lawmakers will approve a cigarette tax hike and full funding for the governor's "Schools First" plan.

But neither Bredesen nor Ramsey said they have done deals on the tax hike's size or the education funding plan's amount.

Bredesen, a Democrat, made a pitch for his proposed 40-cent per pack cigarette tax increase to fund his $200 million-plus education package to more than 200 business leaders at a breakfast hosted by Northeast Tennessee chambers of commerce.

"This is money we can count on," Bredesen said of the 40-cent cigarette tax increase. "It's a tax that about 80 percent of Tennesseans don't pay. Every time it is asked about, it is a popular thing to do. ... We did some polling, and it was approved by over 70 percent of Tennesseans across the board, ... I think people see this as a realistic and reasonable way to raise some additional money for education."

Ramsey, a Blountville Republican, said that "in the end there will be a tobacco tax increase," and it's just a matter of how much.

"The only thing that has ever concerned me about this is the fact that we're in good economic times, revenue is coming into Tennessee at an all-time high," Ramsey said after the breakfast. "We practically have one-time money running out our ears, so is that the time you increase a tax? I know it is a palatable tax that people can live with but at the same time my basic philosophy is you keep something like that in your back pocket knowing somewhere down the road there will be a downturn. ... We will be looking through the budget to hold this increase down to a minimum, but the governor's education plan will be fully funded and we'll put as much as he's putting into it or more."

The House Budget Subcommittee voted a few days ago to undo a decision by the Agriculture Committee to reduce Bredesen's proposed cigarette tax increase to 20 cents per pack and use the money to eliminate the state's six percent sales tax on staple food items.

"I think it's going to get done basically the way it's proposed although I'm sure there will be some little tinkering with it. ... The agriculture committee was the biggest single hurdle," Bredesen said. "I feel reasonably confident that something like 40 cents ... is the money that will be ultimately passed."

Bredesen also responded to concerns that possible changes in the state's Basic Education Program (BEP) funding formula might shortchange midsize school systems in Northeast Tennessee. A coalition of the state's larger school systems has hired its own lobbyist in an attempt to get more BEP funds from the state.

"We're trying to find a transparent and fair way to handle the BEP. They should not worry about that," Bredesen said.

In welcoming Bredesen at the breakfast, Kingsport Mayor Dennis Phillips reminded the governor that Kingsport and Sullivan County are committed to education. Phillips pointed to the city's commitment to build a higher education center downtown as one example.

"We think this shows a true, true commitment that we not only are committed to education in K through 12 but through K through 16," Phillips told Bredesen.

Both Ramsey and House GOP Leader Jason Mumpower of Bristol, meanwhile, said they continue to seek legislative cuts in the state's sales tax on food.

"I've been in Nashville in good times and in lean times and sometimes I think the good times are harder than the lean times because if you haven't ever seen 132 politicians fight over a barrel of money, it's something to see," said Mumpower, who good-naturedly presented Bredesen with what he called a "bottle of tick repellent" at the breakfast. Bredesen was hospitalized last year with what was diagnosed as a tick bite.

Bredesen said there may be a deal on the food tax cut to get his cigarette tax hike and education plan through the legislature.

"We may end up with some sort of compromise to get something passed, ... but if I've got an extra dollar, the place to do it is in education," Bredesen said.

Recommended for You

    Kingsport Times News Videos