Tennessee Lt. Gov. Ron Ramsey said Thursday that he wants Gov. Phil Bredesen's proposed 40-cent-per-pack cigarette tax increase to be cut in half.
"I would like to get it down to 20 cents," Ramsey, R-Blountville, said of the proposed cigarette tax increase being considered by lawmakers to fund more than $200 million in education improvements. "I think where we're heading is to hold the cigarette tax as low as possible yet fully fund education as it needs to be funded.
"I think with revenue growth and shifts from other areas, it can be held less than what the governor proposed. ... We could keep the rest of it in our back pocket if we need it when times do get hard. We're in good economic times right now. Sometimes it's hard to justify (a tax) increase when you have more money coming inside the state."
Two powerful political forces - Republican leaders who want a sales tax cut on food and proponents of Bredesen's cigarette tax hike and education proposal - are competing to shape the situation's final outcome.
House Republican Leader Jason Mumpower of Bristol and House GOP Caucus Chairman Glen Casada of Franklin stood together during a news conference on Tuesday to advocate the food tax cut.
"In a year of such unprecedented growth, we should be talking about providing some type of relief to all Tennesseans by giving them a break on the sales tax on food," Mumpower said in a prepared release. "Food is an absolute necessity. It's time we stopped talking tax increases, and began running government efficiently and effectively plan for the future."
Ramsey said the Senate GOP Caucus wants a sales-tax-free month on food - most likely in December.
Mumpower pointed out the state has a Rainy Day Fund of $497 million, with a proposed $38 million to be added out of the state's proposed budget. The state will have almost $1 billion in new overall available revenue plus an additional estimated $100 million after the State Funding Board meets on May 7, he said.
"We've overcollected in last year's budget cycle. We have extra money laying around. We collected it from the citizens, so let's give it back to the citizens," Ramsey said.
A coalition of organizations called SchoolsFirst!, meanwhile, is backing Bredesen's proposal to help fund public education by raising Tennessee's cigarette tax. The coalition's partners include the state's largest metropolitan school systems, the Johnson City-Jonesborough-Washington County Chamber of Commerce and the Tennessee Hospital Association.
"In many school systems, SchoolsFirst! could mean the difference this fall between a tight budget year or a year in which schools are able to afford new textbooks and computers, reduce class sizes or offer new math and science courses," Ellen Thornton, executive director of the Tennessee Business Roundtable, a SchoolsFirst! partner organization, said in a prepared release. "Money won't solve all our education issues. But putting more resources in our schools is an important step toward achieving our long-term goal of a top-notch education system."
Ramsey indicated the issue will be settled after the funding board meeting. "Then we'll know exactly how much money will we have," he said.