Tenn. Republicans oppose governor’s cable tax

On February 4, 2010, in News 2010, by Mark Norris

By Associated Press, TimesNews.net
February 4, 2010

NASHVILLE, Tenn. — Tennessee Republican legislative leaders said Thursday they’re opposed to Gov. Phil Bredesen’s proposal to tax cable TV to save some government jobs and pay for higher education.

The tax is part of a state revenue plan Bredesen says would generate about $50 million a year. He wants to earmark that money for higher education and to preserve 200 jobs among prosecutors, public defenders, probation officers and foresters.

But Senate Speaker Ron Ramsey of Blountville and several other Republicans said in a press release that increasing Tennesseans’ cable bills is not the way to balance the budget.

Instead, Ramsey said, the state must reduce spending and encourage job creation.

Senate Majority Leader Mark Norris of Collierville said the budget should not be balanced “on the backs of the taxpayers.”

“The weakened economy means lawmakers must be vigilant to make sure that taxpayer dollars are spent in the most efficient and effective manner,” he said.

The Republican press release was issued Thursday afternoon, several hours after Republican House Speaker Kent Williams of Elizabethton told reporters that he didn’t expect the cable tax would pass.

“I can’t see it going anywhere,” Williams said. “I may be wrong, and it’s a shame to say, but it’s an election year.”

The governor’s revenue proposal would also equalize the sales tax on cable and satellite use. The state was sued by the satellite TV industry over a law that allows the first $15 of a cable bill to be tax exempt.

Bredesen has called the litigation “a very reasonable lawsuit.”

“You can’t tax the same service from one person and not tax it from another,” Bredesen told reporters earlier this week. “I don’t think of it so much as though we’re raising taxes across the board on television, but really we’re kind of fixing a loophole.”

The governor said he expects the average increase to be about $1.35.

“It’s not like it’s some large overwhelming amount of tax,” he said.

But Williams said he’s been told by the cable industry that it has successfully defended challenges to similar exemptions in other states.

“I’m not sure who’s right and who’s wrong, but if it’s something the courts force us to do, of course we’d have to do it,” Williams said. “Let the courts work it out. That’s why we have a judicial system.”

Republicans, who have majorities in both chambers, also oppose a proposal to apply sales taxes to food consumed by hotel and motel customers.

“We simply cannot tax our way out of this recession,” said House Caucus Chairman Glen Casada of Franklin. “We should take this moment to review our priorities and cut waste and unnecessary programs.”

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