Posted on 11/17/2001 9:16:46 AM PST by Stand Watch Listen
Trying to avoid another assault by enraged income-tax protesters who poured through the Tennessee Capitol in July, Republican Gov. Don Sundquist, now the champion of those seeking a state income tax, is being charged by Tennessee populists with attempting to make a secret deal with the leadership of the state Legislature. Income-tax protesters are livid at what they consider Sundquist's duplicity, citing this excerpt from Sundquist's State of the State address in February 1999: "You will hear from those who say we ought to preserve special breaks for some businesses and impose an income tax on working Tennesseans. That's not tax relief; it's not tax reform; it's not tax simplification; and it's not tax fairness. All an income tax does is raise the tax burden on Tennesseans and create a way to finance the easy and endless expansion of government. Tennessee does not need a state income tax."
But, according to Sundquist press aide Sean Williams, "That was before he knew about the state's problems. He's admitted that he was wrong. He's trying to fund education and health-care needs in Tennessee." The trouble with that, say tax critics, is that when Sundquist delivered the speech he was not entering his first term but his second. He knew where the revenue came from and where it went.
So when Sundquist went back on his antitax pledge it sent tax protesters storming through the Capitol on July 12, breaking windows and causing other damage while legislators debated a state income tax. As American Indians among their numbers beat drums in rebellion, income-tax protesters made their views known in no uncertain terms. "The opinion of Tennesseans is very clear," Lloyd Daugherty of the Tennessee Conservative Union told Fox News. "No income tax! No income tax! No income tax!"
According to figures from the Federation of Tax Administrators, Tennessee is one of only eight states which has no real state income tax. Alaska, Florida, Nevada, South Dakota, Texas, Washington state and Wyoming are the the others still holding out on the state income-tax issue. Rhode Island's tax is pegged to federal tax liability (currently 25.5 percent but scheduled to decrease to 24 percent next year). Vermont's tax is calculated the same way, though if an individual's Vermont tax liability for any year exceeds that determinable under federal tax law in effect on Dec. 31, 1999, the taxpayer is entitled to a credit of 106 percent of the excess tax. Got that?
Indications are, however, that despite legislative denials, Tennessee may be the next state to drop off the list of eight. And Sundquist is the one who brought the proposal to the table. Tennessee's budget crunch is nearly without parallel as the state faces a $300 million shortfall. "Next year's budget is likely to fall as much as a $1 billion short," says House Democratic Caucus Chairman Randy Rinks (Savannah). "We're looking at cutting something like 12 agencies if this thing isn't resolved. Something's got to happen."
According to Dana Keeton, public information officer for the Tennessee Department of Safety, even the state police have felt the crunch. "We lost $5.3 million in the budget cuts. We're 35 to 40 officers short across the state and the events of 9-11 have strained our resources even more," she tells Insight. A fall class of 50 new highway patrolmen canceled for lack of money was restored thanks to the federal Homeland Security Initiative. "Thank God for that program. We've had to call up reservists, and that with the overtime is a killer. The department's hurting; we're all hurting," says Keeton.
The major drag on the profligate Tennessee budget is the failed TennCare program, former governor and Clinton adviser Ned McWherter's experiment to assist Hillary Rodham Clinton's abortive attempt at health-care reform. The Clinton-inspired initiative has been nothing short of a disaster for Tennessee, say fiscal critics.
As early as 1999, the Nashville Business Journal was bemoaning fraud and abuse in the TennCare system. "The administration of Gov. Don Sundquist," said the Journal, "has managed the program so poorly that it can't even assure taxpayers that everyone presently enjoying TennCare's generous benefits actually qualifies." The Jackson Sun put it more succinctly: "Compensation problems; gaps in service to the poor. Add allegations of mismanagement, rapid turnover at the top of TennCare and fraud and abuse, and most Tennesseans know there's something wrong with the program."
Tennessee budget figures show that the state spends nearly $9 billion a year on health and human services, with the vast bulk going to TennCare. Allegations that individual state legislators have profited from TennCare are rife across the state. Yet TennCare is the one program where Sundquist would not tolerate cuts. In fact, of the $207 million that he approved in agency increases, $160 million went to try to bring the bleeding program into the black as a Republican governor, say critics, allowed a Clinton legacy to destroy the state budget.
According to conservative Nashville radio talk-show host Phil Valentine, "TennCare is the monster that has wrecked budget after budget. It consumes an ever-increasing slice of the budget pie each year." The problem, claims Valentine, is that "[r]ecent data available on Medicaid and poverty rates show that about 86 out of every 100 poor residents nationwide receive Medicaid. In Tennessee, that number is a shocking 151 recipients of TennCare for every 100 poor residents." Valentine says that, according to his research, 25 percent of all Tennesseans are on TennCare.
The Tennessee Bureau of Investigation (TBI), the agency charged with investigating TennCare fraud, has pointedly avoided prosecuting any but those at the lowest level of allegedly rampant corruption. TBI Director Larry Wallace, who has been widely criticized as too political and against whom numerous allegations of corruption have been reported, allegedly was reappointed in 1998 because he kept a Sundquist relative from being prosecuted in a TennCare fraud case. The nominating committee, made up of members of the Tennessee District Attorney General's Conference, recommended TBI Deputy Director Jeff Long. But within moments of the committee's recommendation, Sundquist reappointed the free-spending Wallace without comment.
"At first," a source close to state government tells Insight, "Sundquist tried to lead resistance to the runaway spending, but he did it all wrong. He then broke his word and tried to force a flat, state income tax down the throats of the legislators and the people. And he got just what he should have expected — slammed up against a wall. Now he's not even leading." Tennessee House Minority Leader Steve McDaniel (R-Parker's Crossroads) puts the best face on it he can, saying: "The governor has tried in the past to lead with proposals, but this time he's left it up to us to resolve it."
And the state income-tax issue in Tennessee is not a partisan one. State legislators from both sides of the aisle have stood up against the measure. Democratic Reps. Tim Garrett and Ben West have joined with Republicans such as Sen. Marsha Blackburn and Reps. Mae Beavers and Charles Sargent to oppose the income tax, while leading Democrats such as Sen. Robert Rochelle have championed it. At the same time, many legislators seeking re-election are loathe to commit on the income-tax issue.
But Sundquist holds a lot of cards, and he's the one who has brought Tennessee to the brink of joining 42 other states with income taxes. He's also the one trying to pass the buck to the Legislature for a secret deal, say tax critics.
Sundquist is pressing the leadership in the General Assembly to cook the deal in advance and behind closed doors, say state Capitol insiders, because he doesn't want a repeat of the circus during the last special session called to resolve the budget crisis. But working it out in the dark violates at least the spirit of Tennessee's sunshine law, a highly placed but confidential source tells Insight. The sunshine law dictates that all governmental bodies making official decisions must do so in a public forum, where citizens and the press are allowed to observe. This would be open and shut, say critics, except for vague provisions that give the General Assembly some leeway.
In the back of everyone's mind who follows the blood sport of Tennessee politics is the memory of that furious tax protest last July, prodded on by the state's conservative radio talk-show hosts, that swamped network news shows across the country with scenes of trashed offices, broken windows and state troopers manhandling irate citizens. The governor had tried to pre-empt the antitax rally by getting local authorities to close traffic on key avenues around the state Capitol, calling it a necessary street project. But if that was the case, bureaucrats chose to close the streets on the exact days scheduled for the rallies.
Faced by the state's populist furies in full flight, the Legislature passed a budget that cut $300 million from Sundquist's proposed spending plan (much of it slated for education), another $100 million from current state spending and threw into the kitty $560 million from the one-time tobacco settlement. Sundquist vetoed the budget, as he had threatened to do, and the Legislature overrode his veto.
And that is the situation as the spenders face off against the antitaxers while legislative leaders insist that Sundquist really isn't trying to bypass the sunshine law and confirm that he will not call a special session until the Senate and House leadership reach a consensus for a state income tax. Meanwhile, of course, leadership sessions are private. According to House Democratic Caucus Chairman Rinks, "The governor did tell us that he wanted the leadership to reach a consensus on a budget plan before he would call a special session. But I don't think it's intended to violate the sunshine law." House Minority Leader McDaniel agrees.
Richard Pearl, chairman of the Tennessee Libertarian Party and an antitax protester, thinks such claims are laughable. "Nothing about this surprises me, especially when we have a decision that says the sunshine law, and nearly every other law on our books, does not apply to the state Legislature. They learned their lessons well from the federal Congress and exempt themselves from every law they pass," Pearl tells Insight.
Alexia Levison, the governor's press secretary, tells Insight that neither the tax protests nor the sunshine law have anything to do with the governor's desire for a consensus among legislators before he calls the special session. "To say he is skirting the sunshine law is foolish. Special sessions cost money and we don't have any. The governor's simply trying to avoid spending money that we don't have." What about claims that he's also attempting to avoid a repeat of the July protests? "No effort will be made to keep the protesters from voicing their opinion, but every one must understand that since 9/11 special security measures are changing things, and that includes the Tennessee state Capitol," says Levison. That threat on the record, Levison makes clear with a smile that Sundquist does want an income tax and will not support a sales-tax increase in any form. "All that does," she says, "is force people to buy off the Internet."
George Getz, a spokesman for the National Libertarian Party, which works hard against state income taxes, questions Sundquist's tactics. "Why is he handling the income-tax issue 'differently' from all others? Are we supposed to believe that it's just a coincidence that the the income tax, the one issue on which the governor really got hammered, is the one issue in which he's trying to work out a deal in the dark? Come on!"
Were legislators playing on the fears of their constituents when they refused to pass an income tax last summer? It's difficult to say. House Speaker Jimmy Naifeh has said that he will support any proposal that has the votes to pass. Lt. Gov. John Wilder one day will take the no-income-tax pledge and the next day renege.
One senior legislator, speaking on condition of anonymity, says he doesn't see how Tennessee can avoid becoming the next state to join the income-tax column. And the dire predictions of fiscal doom by Rinks echo loudly. Even McDaniel can't dispute Rinks' numbers. "I suspect that Randy's pretty close to the mark on the budget situation," he tells Insight. Serious legislators carry serious looks on their faces in Tennessee these days. The prospect of eliminating 12 agencies is not a pleasant one. They refuse to discuss which agencies might be cut to avoid a panic among state employees, but Tennessee's spending-driven fiscal crisis is coming to a head.
According to the Knoxville News, even the 400 or so municipal officials who this year attended a Tennessee Municipal League District Meeting, and the 350 who attended a legislative conference, marked the budget situation as the most critical the state faces. "At the end of this series of presentations, discussions and debates on fiscal issues there is consensus on at least one point — there's no time for game-playing, no room for error. The state budget is serious business with serious consequences," says the Knoxville paper.
A state lottery to fund education meanwhile is being resurrected by Rep. Steve Cohen (D-Memphis), according to an Associated Press (AP) report on Nov. 12. The lottery, outlawed by the Tennessee Constitution, has been a sticking point with legislators and religious groups. Meanwhile, according to a February 2001 report by AP, Tennesseans spend hundreds of thousands of dollars on lottery tickets at stores just across the state line.
Cohen told the Nashville Tennessean that a state lottery "could generate $180 million to $300 million for scholarships," and Tennessee is one of only four states without some form of legalized gambling. But although Cohen has succeeded in getting a lottery referendum on the 2002 ballot, he faces a new version of an age-old partnership: religious groups and gambling organizations in Kentucky, Mississippi and Georgia. Lottery advocates say it is like the days of illegal booze when a coalition of religious groups and bootleggers kept legal alcohol sales out of many Tennessee counties.
So where should the responsibility be put for Tennessee's descent into fiscal disaster? One high-level state source, though giving Sundquist his share of the blame for not leading in a time of crisis, also blames Wilder, Tennessee's answer to Strom Thurmond. An octogenarian, Wilder has been lieutenant governor, and therefore speaker of the Senate, since the late 1960s. When a group of young Democratic upstarts tried to oust him in the 1980s (the lieutenant governor is chosen by the state Senate), he cut a deal with the Republicans to give them key chairmanships in exchange for their votes for speaker. "Wilder is just that," a confidential source tells Insight. "He's wild. He's unpredictable. You never know which way he's going to swing. He'll cut a deal one minute and then break his word the next. He's unreliable."
According to both McDaniel and Rinks, House Speaker Naifeh has said point-blank in leadership meetings that something's got to happen to resolve these problems. He's open to any logical proposition that will fix the problem and not just put it off again. Rinks has suggested just tossing out the entire Tennessee tax code and starting over, a view that some find meritorious. But it's far too radical, say other legislators, and the votes probably aren't there to do it.
One thing is certain, whether the sunshine law has been skirted or not, when the Legislature comes back into session after the leadership arrives at some sort of a deal: The people will have little time to voice their opinions. Insiders say the gavel will bang three times — once to open the session, once to mark passage of the budget bill and once to adjourn. Bets are that a final solution still will have eluded legislators.
Groups such as the Libertarian Party can denounce Sundquist-sponsored attempts to pass an income tax as unconstitutional until they are blue in the face, but the Tennessee Constitution doesn't spell out the issue definitively. With religious leaders and lottery lobbyists from other states fighting the lottery initiative, that leaves for the big-spending politicians a state income tax as the closest port in the storm, despite overwhelming opposition by the people of Tennessee.
Eight states across the nation are fighting state income taxes. In the absence of a political rebellion, say the state's savviest observers, Tennessee will be the next to fall.
Tony Hays, a TV reporter and novelist, wrote this article on assignment for Insight.
Oh, great! Another state flirting with the idea of government-sponsored vice.
I love it. A tax on folks who didn't pay attention in math class to pay for math classes for the current generation.
Hey! I have the answer! It is simple: CUT SPENDING!
There have been almost no government programs at any level cut back, much less eliminated, since the Second World War. The only one I can think of is federal welfare -- and the reforms are under heavy attack by interest groups and the Iron Triangle as we speak, even though they were an important step forward that demonstrably improved the lives of America's poor.
Garson Kamin once said that the total tax burden on a people can only be lightened through revolution. It begins to appear that he was correct -- but if we look to the American Revolution as a case study, we find that taxation went up immediately after our separation from England, so even that's not guaranteed.
Freedom, Wealth, and Peace,
Francis W. Porretto
Visit the Palace Of Reason: http://palaceofreason.com
You are wrong. Yours' is the most offensive statement on this thread. That is just as bad as using the N word. I am tempted to press the abuse button. </sarcasm.
Like, so what? Eliminating one huge middle man of the state bureaucrats fingering the money first, and instead letting the counties assume whatever responsibility for whatever these agencies do would eliminate the "necessity" of half those budget monies, with the same amount of "government work" being done.
Same deal with the fed government. Each layer of bureaucracy that filters tax money skims around half, that's just observable, and it also puts accountability one step farther away from the people who "voluntarily donated' the tax money.
I say, cut, cut, cut again, eliminate entire agencies, give them a year or something total to get their acts together and leave, that's way more than anyone in the private sector gets,then, no nothing else. Those people go back to the private sector workforce where you can be fired if it's warranted. Government was not created as a jobs program for more government. It's turned into that, all over, but it wasn't the original idea, and it's mostly a bigfat mess as it stands now.
And that bonehead state pooper pr spokesperson? Like DUH,pure-D statist, that's why they had the legitimate militia before, crying over the lack of 50 state poopers, when you could have 50,000 tennesseans in the militia *for free*, and eager to do the work. duh, government workers, duh. Only solution in the world they ever see is hiring more government workers. Anything else is so far removed from their consciousness it can't exist for them, it gives them the buckwheats to even think about it. they get the chilly willys from even thinking about thinking about it. "let the people be their own guards????? Are you crazy? We are the ONLY people in the entire world who can blah blah blah", more horse crap.
Ya, ya, I know, some gov employee will now chime in and present why they or their spouse or something is the exception to the rule. OK, for the record, I'm speaking "generally" here, so let's just skip that part. We just plain old fashioned got ENOUGH expensive governments all over, we reached 'full" a long time ago, we do not need to keep increasing the ratio of governmental workers to non governmental workers, if it is NOT stopped the country will collapse. government costs money, it doesn't create one penny of wealth, it just costs. some is necessary and good, but what we got today is nutso, and it fell into a self perpetuating double dipping dual pensions before you are 60 jobs program decades ago.
Get rid of Hitlary's TennCare!!!!
And don't elect anyone into office who is pro state-income tax -- democrat or republican!!
BS. We'll kick their money-grubbing asses again.
Tenncare fraud is rampant as well. I understand that there are enrolees from other states who use Tennessee addresses in order to participate in the program. Find the abusers, get them off the rolls, fine and imprison them.
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