Lawmakers concerned about Tenn. gov’s revenue plan

On February 2, 2010, in News 2010, by Mark Norris

February 2, 2010

Some Tennessee lawmakers say they’re concerned about how their constituents will react to a state revenue proposal that includes taxing cable TV and hiking driver’s license fees for the first time in more than 20 years.

The measure is expected to generate more than $70 million, as part of Gov. Phil Bredesen’s $28.41 billion budget proposal unveiled in his State of the State address this week.

Finance Commissioner Dave Goetz fielded questions Tuesday from lawmakers about the revenue component and the governor’s overall budget plan.

The revenue proposal includes equalizing the sales tax on cable and satellite use and taxing cable boxes. The driver’s license fee increase — from $19.50 for five years to $46 for eight years — would be the first hike since 1988.

Democratic Sen. Roy Herron of Dresden said people are hurting so badly from the recession that “any fee increase seems like a lot.”

“I’m going to go home and listen and see what people are feeling,” he said.

The fee hike is expected to raise about $22 million, mainly for a new driver’s license issuance system, the purchase of better communication equipment for state troopers and to preserve the jobs of about 85 troopers and 56 driver’s license station positions.

House Minority Leader Gary Odom said he doesn’t believe the fee increase would be much of a concern because it would be spread over eight years. He also anticipates a shorter wait for people to get their licenses, which he believes they would appreciate.

“You’re making the process more manageable because if you extend the time of the driver’s license, then the renewal lines should be shorter at the driver’s license centers,” the Nashville Democrat said.

However, Republican Senate Majority Leader Mark Norris of Collierville questioned whether the hike is necessary, and said Republicans make look for other places to cut in the governor’s budget. When asked to specify, he said, “Too soon to tell.”

As for the tax initiatives, they’re expected to generate about $50 million, including $21 million for equalizing the sales tax on cable and satellite use. The state was sued by the satellite industry over a law that allows the first $15 of a cable bill to be tax exempt.

Bredesen said the equalization would fix that loophole.

“It’s not like it’s some overwhelming large amount of tax,” he said. “And it will help get us through these times. If the Legislature decides not to do it, then I think a year from now a judge will decide what we have to do about it.”

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