Selling the State Income Tax: Legislators try to rally support

By Bob Robinson
STAR STAFF

   From the days of horse and buggy whips to automobiles, the Tennessee General Assembly has been exploring ways to increase state revenue in a changing economy.
   State Sen. Robert Rochelle (D-Lebanon), believes the answer to a state revenue shortfall is a State Income Tax.
   Rochelle, who is making appearances across Tennessee in support of a State Income Tax, was in Johnson City yesterday.
   Current and former state legislators were among those invited to attend, including Rep. Zane Whitson (R-Erwin), Rep. Ralph Cole (R-Elizabethton), former State Sen. Carl Moore of Bristol, former State Sen. Don Arnold of Johnson City, and former State Rep. Joe Bewley of Greeneville.
   State Sen. Rusty Crowe (R-Johnson City) told the Elizabethton STAR that he and State Reps. Bob Patton (R-Johnson City) and Danny Davis (R-Johnson City) were not invited to attend the event.
   "There is a difference of opinion on the need for a State Income Tax. This was a pro-income tax rally. I have promised my constituents that I will not vote for a State Income Tax," Sen. Crowe said.
   "A State Income Tax is also unconstitutional in Tennessee. In First National Bank versus McCanless (1948), the Tennessee Supreme Court ruled 'a statute levying a tax upon general income was unconstitutional,'" Sen. Crowe added.
   Speaking to approximately 60 invited representatives from government, business, industry and news media, Sen. Rochelle said the State of Tennessee faces a shortfall of $300 million this year, $1 billion next year, unless additional revenues are found.
   "There is a structural budget deficit in Tennessee. Since 1947, the state has relied on revenue generated by a sales tax on goods, when goods generated 62 percent of the state's economy. Today, 65-70 percent of the state's economy is generated by services," Sen. Rochelle said.
   If the current state sales tax is increased by one or 1.5 percent to more than 10 percent, "it will wreck the economy," Sen. Rochelle added.
   Since 50 percent of Tennessee residents live within a 30-minute drive of another state, many will make purchases in another state to avoid paying a sales tax increase. Additional revenue from a State Income Tax would be used for education, according to Sen. Rochelle.
   "Tennessee ranks 49th in education expenditures per capita and 46th in the high school graduating rate. There is a reading deficit in Tennessee and it is expected to be a problem in the future," Sen. Rochelle added.
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   Elizabethton School System, with per pupil expenditures of $6,085 compared to the state average of $5,794, results are better than the state average in Grades 3-8, according to the 2001 median national percentile.
   Elizabethton School System (state average in parenthesis):
   Grade 3-reading comp 57 (51), language comp 59 (56) , math comp 68 (56), science 54 (44), social studies 58 (51).
   Grade 4-reading comp 70 52 , language comp 65 (58), math comp 70 (59), science 68 (52), social studies 71 (55).
   Grade 5-reading comp 65 (55), language comp 60 (52), math comp 62 (52), science 60 (50), social studies 63 (47).
   Grade 6-reading comp 69 (52), language comp 66 (55), math comp 65 (56), science 63 (50), social studies 61 (49).
   Grade 7-reading comp 62 (52), language comp 71 (50), math comp 54 (52), science 56 (47), social studies 63 (54).
   Grade 8-reading comp 69 (54), language comp 69 (58), math comp 63 (56), science 66 (52), social studies 64 (49).
   Elizabethton High School:
   11th grade writing, exemplary; ACT, average; math, exemplary; language arts, exemplary; and, non-academics, exemplary.
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   Sen. Rochelle said 70 percent of Northeast Tennessee residents, along with others living in "pockets of poverty," would benefit from a State Income Tax.
   In a question and answer period, Sen. Rochelle was asked to explain why the state budget increased from $13 billion to $20 billion under the Gov. Don Sundquist administration.
   Sen. Rochelle attributed the increase to double counting of federal dollars in the state budget, an increase in tuition by state colleges and universities in Tennessee, and child support allocations.
   After eliminating double counting, Sen. Rochelle said the true growth of the state budget from 1988 to 1999 was 4.9 percent, while per capita growth was 6.2 percent.
   Sen. Rochelle was also asked if a state lottery would eliminate the need for a State Income Tax. "No. None of that money would satisfy the need for additional revenues. There would be no additional funding for state government. College tuition would be paid from the proceeds, however," said Sen. Rochelle.
   "Things have changed since the last election. It is time for voters to decide whether or not their senator and representative are voting the convictions of constituents," he added.