A late legislative session impasse continued to brew Thursday between Republican leaders and Tennessee Gov. Phil Bredesen over Bredesen's push for a substantial cigarette tax increase to help fund his education funding overhaul.
Those GOP leaders - Lt. Gov. Ron Ramsey of Blountville and House Republican Leader Jason Mumpower of Bristol - also said they are taking issue with a House Democratic Caucus plan to give all lawmakers a cash lump sum to spend on local projects in their districts.
Ramsey said he's still rejecting Bredesen's call for a 40-cent-per-pack cigarette tax hike, and added Senate Republicans want a smaller increase staggered over three years.
"I just don't see how we ever get to the 40 cents," Ramsey said. "This is not about flexing our muscle or arguing with the governor. The bottom line is it's just hard to justify a tax increase in a year when you've got a $300 million surplus. I do understand this is a relatively palatable tax - cigarettes - that has other effects to stop kids from smoking, but it's just a tough sell. We're trying to negotiate with the governor to meet somewhere in the middle."
Bredesen, a Democrat, is seeking the cigarette tax hike to help fund at least half of his $475 million overhaul of the state's Basic Education Program (BEP).
Mumpower and House Republican Caucus Chairman Glen Casada, R-Franklin, have called upon Bredesen to submit a "no new taxes" budget.
Mumpower noted that in addition to the $300 million surplus, the state has a $497 million Rainy Day Fund, plus millions of dollars in other recurring and one-time revenues.
"There's $1.5 billion in new revenue on the table," Mumpower said. "That revenue can be used to completely fund the BEP program that the governor is talking about. It can be used for a significant rollback in the sales tax on food, a salary increase for state employees, capital projects and an operation increase for higher education."
Both Ramsey and Mumpower also spoke out against a House Democratic Caucus proposal to give $100,000 to House members and $300,000 to Senate lawmakers to use for projects in their districts.
"That is even more of a sticking point than the cigarette tax (hike)," said Ramsey. "We are not going to do that. If there is any reason, in my opinion, why the Republicans lost the majority in the U.S. House and Senate, it was these earmarks and overspending."
While lawmakers try to hammer out a deal over the cigarette tax hike and education spending plan, they are also getting continued pressure to lower the sales tax on food.
Tennesseans for Fair Taxation (TFT), the same organization that advocated a state income tax in 2002, took its push on Thursday for a food tax cut to YouTube, an online site where videos can be uploaded and shared with the general public.
TFT's YouTube video depicts Department of Revenue officers in SWAT-style uniforms swarming unsuspecting grocery store shoppers as they make their way to their cars.
"The simple fact is, Tennessee's high food tax takes a whole month's worth of groceries off the table of every Tennessee family each year," TFT's Dick Williams said in a prepared release. "If you spend $600 a month for groceries, then you pay $600 a year in food taxes. If you spend $300 a month on groceries, then you pay $300 in food taxes. ... For many Tennessee families on the edge, the cost of putting food on the family table means the utility bill doesn't get paid that month or the mortgage payment goes in late. ... We are calling on state legislators to enact a permanent food tax cut on all food, all the time."
TFT has been advocating a food tax cut paid for with a cigarette tax increase.
To see TFT's YouTube video go to www.yourtax.org.