NASHVILLE -- Departing Gov. Phil Bredesen says his successor can run state government without a sales tax hike, but the record shows that, while Bredesen didn't raise the sales levy, other taxes and fees soared close to $1 billion on his watch.
Acting at Bredesen's behest in 2007, for example, lawmakers passed a cigarette tax hike expected to bring in $160 million to $180 million a year, most of it going toward education.
Earlier this year, faced with Bredesen's threats to slash their TennCare payments, hospitals asked lawmakers to pass a one-year hospital "assessment fee" that would raise $310 million to draw down additional federal matching funds.
Other increases included a 2009 package that increased taxes on managed care companies not participating in TennCare. The package, which also raised environmental permit fees, brings in about $136 million annually.
The same year, Bredesen persuaded lawmakers to boost employer taxes by an estimated $245 million a year to prevent the state's Unemployment Trust Fund from going broke. The tax is slated to go away when the fund hits $650 million in reserves.
A list of tax and fee measures compiled by the General Assembly's Fiscal Review Committee staff, combined with Revenue Department figures and news accounts, shows total increases in Bredesen's tenure exceeded $900 million, although some tax and fee hikes are, theoretically, only temporary.
During Bredesen's tenure, the administration each year pitched a "technical corrections" bill that included measures aimed at shutting down what officials called "loopholes." They also included flat-out tax hikes, and some lawmakers complained about the process.
State Senate Finance Committee Chairman Randy McNally, R-Oak Ridge, said the annual "technical corrections" legislation brought each year by Bredesen "in some ways closed some loopholes and in other regards it was, you know, I guess you could call it tax increases, fee increases."
Lt. Gov. Ron Ramsey, R-Blountville, the Senate speaker, said Democrat Bredesen relied on any number of revenue measures during his eight years in office.
"He raised the cigarette tax, and it passed [the Senate] on a straight-line party vote," Ramsey recalled. "He made an attempt to raise taxes on small businesses last [session] by removing the single-article [sales tax] cap."
Bredesen suggested elim- inating the sales-tax cap on major purchases exceeding $3,200. Lawmakers blocked the $85 million measure as well as Bredesen's proposed $21 million increase in driver's license fees. Both measures were designed to help offset the need to whack government spending in light of recession-ravaged revenues.
Bredesen tax legacy may be tough act to follow | Times Free Press
