Cigarette tax remains hot issue

Legislature faces grueling week as session winds down

By Richard Locker, Commercial Appeal
June 4, 2007

NASHVILLE -- Tennessee legislators finally resolved some of the year's biggest issues last week -- including a workplace smoking ban -- but still face a long and contentious agenda as the expected final week of the 2007 session starts today.

The partisan fight over a cigarette tax increase will be the pivotal issue when the House convenes at noon. With no debate, the Senate approved a 42-cents-per-pack increase Friday on a 17-16 party-line vote -- with the lone Senate independent siding with Democrats -- but Republicans filibustered when the tax bill moved to the House Friday night.

The House Republican Caucus agreed in a closed-door meeting to block the tax vote unless a $100 million K-12 school construction fund from surplus lottery revenue that they want is approved. Although they're a 53-46 minority in the House, Republicans can block the bill from a vote because it takes two-thirds of the House to end debate.
Beyond the tax, other big legislation with broad public impact is still up for consideration, including:

An overhaul of the HOPE lottery scholarship program. The bill would increase the dollar amounts of the scholarships across the board for this fall, reduce the college grade-point average required to maintain the awards from 3.0 to 2.75, and broaden eligibility to more non-traditional, or older, students.

A local property tax freeze for homeowners aged 65 and older. The dispute is where to set the ceiling on household income to qualify for the freeze, which was authorized by a state constitutional referendum last fall.

Its sponsors, Sen. Mark Norris, R-Collierville, and Rep. John DeBerry, D-Memphis, appear near an agreement with the associations representing local governments -- which will lose revenue under the program -- to set the ceiling for each county at the county's median household income level for its residents who are 65 and older. In Shelby County, that would be somewhat less than $36,000 a year -- which is the median for households aged 65 to 74, a higher level than the median for everyone older than 65.

Whether to reduce the state sales tax on food and by how much. The outcome likely depends on how much the cigarette tax is increased.

A package of anti-crime bills that would sharply increase prison time for convicts of violent crime who use guns and of crimes involving gangs of three or more perpetrators. It would also increase the number of prosecutors statewide.

The $28 billion state budget for the fiscal year that starts July 1, which carries with it a broad array of policy decisions and projects that may or may not be funded. Up for debate are the $57 million in crime bills, a new $23 million science building at the University of Memphis and a $290 million increase for public schools and higher education.

Bills of particular interest in Memphis and Shelby County, including a proposal to use sales tax revenue from future retail development at the Mid-South Fairgrounds to help pay for the fairgrounds' overall redevelopment.

This week marks the first time the Tennessee legislature will meet in June since 2002, when a partial shutdown of state government kept lawmakers here through, and on, Independence Day. That climaxed a four-year fight over a state income tax that finally ended with a one-cent sales tax increase.

In 2002, the issue that kept lawmakers in session long past Memorial Day was how to close a billion-dollar deficit. This year, it's how to deal with a $600 million to $700 million surplus, which is proving to be nearly as difficult.

In a marathon session Friday, the legislature approved Gov. Phil Bredesen's proposed $500 million (when fully funded) plan to improve public schools and an accompanying measure to get tough with low-performing schools.

That's big for Memphis and Shelby County schools, which would receive a combined increase of more than $70 million for the 2007-08 school year, increasing to $114 million a year when the program is fully funded. And 17 of the state's 20 failing schools are in Memphis, whose students might benefit from the increased state oversight and incentives in the school accountability bill.

The legislature also approved a ban on smoking in most workplaces employing four or more workers, including restaurants but exempting nursing homes, private clubs, open-air patios and decks at business places, stores that derive most of their income from tobacco, places that admit only adults 21 and older at all times, and up to 25 percent designated smoking rooms in hotels and motels.

Earlier in May, lawmakers quietly disposed of two major controversial issues without passing them.

The first was a blockbuster fight between AT&T on one side and the cable TV industry and local governments on the other, over AT&T's plan to ease its way into delivering digital video programming over its telephone wires. AT&T finally withdrew the bill after weeks of compromise attempts failed.

The second was a five-year-old push by doctors for new limits and restrictions on malpractice lawsuits. Although a tenuous compromise was reached, which passed the Senate, the impetus for the bill fell after key elements of the compromise fell apart -- and especially when the leading malpractice insurer for Tennessee doctors announced a decrease in insurance premiums.

-- Richard Locker: (615) 255-4923

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Tennessee General Assembly: What's left

The legislature reconvenes today for what lawmakers hope will be the last week of their 2007 session. Major issues still to be resolved include:

Cigarette tax increase:. Senate approved a 42-cent increase (to 62 cents a pack) last week. House resumes debate today.

Lottery scholarship overhaul: Raise dollar amounts of scholarships, reduce college GPA required to maintain the awards from 3.0 to 2.75, and broaden eligibility.

Property tax freeze for homeowners 65 and older. Plan would freeze property tax for those under a household income yet to be decided at the dollar amount it is when the homeowner turns 65.

Food tax cut: Whether to cut state sales tax on food and by how much.

Anti-crime bills: Would increase prison time for convicts of crimes with guns and gang crime, and add more prosecutors statewide.

FY 2007-08 state budget: Up for debate are $57 million for the crime bills, a new $23 million science building at the University of Memphis and a $290 million increase for public schools and higher education.

Memphis and Shelby County matters: Include a proposal to use sales tax revenue from future retail development at the Mid-South Fairgrounds to help pay for the fairgrounds' overall redevelopment.