State Senate and House lock horns

By Megan R. Harrell
Star Staff

   Last week the State Senate approved a bill that would allow political action committees to triple the amount of money given to the Senate candidates. However, members of the House were not as eager to endorse the legislation.
   Shortly after the bill passed the Senate, it stalled in the House and was sent back to committee. House members criticized the Senate's speedy passage of the bill. Representatives had a hard time accepting the bill when they cannot reach a solution to the state's tax issues.
   Rep. Ralph Cole (R-Elizabethton) said he will not vote for the bill that all three area senators supported. "If they are willing to raise the sales tax on middle and low income people, then I will vote against that bill," Cole said.
   The Senate sees tax increases as a way to recover some of the state's $1.2 billion dollar shortfall.
   The Senate passed a sales tax increase last year, but the bill was killed in the House. Rep. Cole expects the same thing to happen again this year. He stated that the largest percentage of tax burden is on the people in Northeast and Northwest Tennessee and any increase in sales taxes would be unfair.
   The Senate is entertaining the idea of a one percent state sales tax increase. Senators made their intentions public at a press conference last week.
   The sales tax increase would raise the state tax rate to seven percent, and Carter County's total sales tax to 9.25 percent. The county's tax rate is currently at 2.25 percent.
   One thing, both the Senate and House can agree on is Tennessee's bleak economic outlook. John Morgan, Comptroller of the Treasury, told state representatives to prepare for another drop in Tennessee's bond rating.
   In 2000, the state had a bond rate of AAA, the highest awarded rate. Tennessee's bond rate is currently AA.
   Rep. Cole stated that a year ago he was proud to say that Tennessee was among the top eight states financially. Today, financial reports show Tennessee at the bottom, along with California and Louisiana.