JOHNSON CITY - Members of the Tri-Cities chapter of the National Association of Insurance and Financial Advisors heard contrasting positions from two Northeast Tennessee lawmakers Friday on Gov. Phil Bredesen's proposed $340 million-plus education plan to be mostly financed by a 40 cent cigarette tax increase.
State Rep. Matthew Hill, R-Jonesborough, told the group during a luncheon at the Johnson City Public Library that he will not be voting for the cigarette tax increase because it is an unstable revenue source.
"Every speech that is given about why we need to increase the cigarette tax is a very telling speech," Hill said. "They are well-meaning people who stand up and say we need to increase the cigarette tax because we need teenagers to not smoke and we need to use all that new money to start new programs. ... But with less people smoking you are not generating as much money, and then there's this huge gap - not today, not tomorrow but about two, three, four years down the road.
"I don't want teenagers to smoke, and I don't want them to get a bad education ... (but) we have to reasonable about our outcomes and priorities and goals in our budgetary concerns."
State Rep. Nathan Vaughn, D-Kingsport, expressed support for the cigarette tax increase. He indicated after the luncheon that without the hike, Northeast Tennessee may face adverse changes in how the region receives K-12 education funding through the state's Basic Education Program (BEP).
"This is probably the most ever in the history of this state that we have ever done for education," Vaughn said of Bredesen's education plan. "I think folks are excited about it ... (but) already the debate has started: Is 40 cents on a pack of cigarettes too much? Is that something that is doable in this state when there are tobacco interests? Big tobacco is going to fight this plan readily. ... I'm supportive of raising the tobacco taxes in order to support us not losing the funding for our local school systems."
Hill predicted that a proposal for a state income tax may resurface in the third year of Bredesen's second term in office.
"If you look back at 2002, the income tax was sold to the public on the backs of a health care crisis with TennCare (the state's multibillion-dollar expanded Medicaid program)," Hill said. "The income tax may be sold on the back of an education crisis."
Hill, in his second term as a lawmaker, said he has proposed legislation for Tennessee state government to have a biennial instead of annual budget. His bill, called the "Transparency in Government Act," would also create a database where the public can track state government spending over the Internet.
"We spent the (budget) surplus last year in about a week and a half - $300 some million dollars," Hill noted. "Lots of times my constituents ask me ‘How are you spending my money?' Now you'll be able to know."
Hill and Vaughn also had different positions about the upcoming rollout of "Cover Tennessee" - Bredesen's health care plan for working uninsured Tennesseans, including many who were disenrolled by TennCare.
Hill said the plan is about to fall apart.
"The reimbursement rate is lower than TennCare. If you can't get enough doctors and hospitals to participate, it's not going to take off," Hill said of Cover Tennessee.
Vaughn said he's not hearing anything about the demise of Cover Tennessee.
"I think folks are very upbeat and optimistic about that program. ... No one has told me anything different. It will be very helpful to the working poor," Vaughn stressed.
Vaughn also pointed out it could be a tight year for road funding because the Tennessee Department of Transportation has warned that it could face a $160 million federal funding shortfall this year.
Hill said lawmakers are still in a reorganizing mode, and added it could take awhile for this legislative session to gain steam. Bredesen is expected to submit his budget proposal to lawmakers next week.
"I have been told this is one of the slowest starts to the legislative session in recent memory. That's not good," Hill said.