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Tenn. House OKs $31.4B spending plan, rejects cut in grocery sales tax

April 27th, 2012 2:48 am by ERIK SCHELZIG,Associated Press

NASHVILLE, Tenn. (AP) — The House on Thursday passed Gov. Bill Haslam's $31.4 billion spending plan after rejecting several efforts to restore funding for several programs and to make a greater reduction in the state's sales tax on groceries.

The chamber voted 66-30 to pass the bill that was sponsored by Republican House Finance Chairman Charles Sargent of Franklin.

Approval was delayed by more than an hour by a spirited debate over Haslam's plan to close the Taft Youth Development Center in Bledsoe County.

Republican Rep. Cameron Sexton of Crossville sought to restore $12 million for the facility, and at first survived efforts to kill the amendment. But after a break — and heavy lobbying by Republican leaders and Haslam aides — the measure was defeated on a 60-38 vote.

The Senate has yet to vote on its version, and the two chambers will have to reconcile differences on projects before the measure can head for Haslam's signature.

Senate Majority Leader Mark Norris called the disagreement a "misunderstanding" over whether projects — like a school for the deaf near Memphis or a community college in Roane County — are local or regional in nature.

"If they don't get comfortable that those are significantly important projects, then we'll go to a conference committee," said Norris, R-Collierville. "It's no big deal. Just takes more time. "

Haslam in January presented his spending proposal that called for raises for state employees, more spending on construction on college campuses and tax cuts on food and estates.

He also proposed a $335 million increase in construction and building maintenance spending at the state's colleges and universities, including the often-delayed science building at Middle Tennessee State University.

Earlier this month, the governor released his budget amendment to reflect improving state revenue collections, but Democrats said the adjustments didn't go far enough. Haslam's plan included $4 million to increase the state's daily payment to local jails by $2 a day. The move was designed to help break an impasse over Haslam's proposal to require incarceration for repeat domestic violence convictions.

The budget proposal also includes funding for reducing the sales tax on groceries from 5.5 percent to 5.25 percent, increasing the exemption for the inheritance tax from $1 million to $1.25 million and enhanced penalties for gang and gun crimes.

"The budget is one of the most important things that a governor does," Haslam told reporters before the House vote. "We feel really good about the budget we proposed and that we amended as well."

House Democrats argued that the Haslam administration failed to recognize $200 million in better-than-expected revenues. House Minority Leader Fitzhugh of Ripley proposed deeper cuts to the sales tax on groceries and other spending measures if revenues continue to improve. That and several other Democratic amendments to the budget were rejected.

Sargent said officials are reluctant to spend all the extra money so the state will be able to afford increased costs related to the federal health care overhaul.


Associated Press writer Lucas L. Johnson II contributed to this report.

Copyright 2012 The Associated Press.


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