Tennessee tax collections are higher than anticipated, and Democrats in the state House have a plan for spending that surplus money. They just filed a bill to that effect. But the legislature won’t gather again until January, and Democrats don’t have the votes to pass anything without GOP buy-in.
House Democratic Leader Craig Fitzhugh and a half-dozen Democrats rolled out their plan to send half the unanticipated income to need-based college scholarships. The rest would be used to lower the state sales tax on groceries and food ingredients, bit by bit.
Whether or not it passes, Fitzhugh says the bill serves notice to groups that would inevitably come up with ways to spend any increased revenues.
“When folks see revenues that are better than expected, oh, you’ll have special interest groups lining up to catch the governor’s ear, to catch legislators’ ear, and to try to be put in the budget. So we’re just trying to say that we’re taking a stand on what we believe to be a broad-based possible use of what we hope to be some excess revenues.”
Last month, tax collections were about 3 percent higher than the budget expected. It was the 11th month in a row that revenue came in above expectations.
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The bill is HB 2164, pre-filed for next year’s legislative session which begins in January.
Fitzhugh says scholarships are a priority because state public colleges have recently raised tuition.
Democratic publicists say the bill would leave the lowering of the state sales tax on grocery food to the commissioners of finance and of revenue.
described the bill so:
Each April, the Commissioner of Finance & Administration, along with the Commissioner of Revenue, would certify the exact amount of surplus revenue the state has collected for the current fiscal year. The Commissioners would then notify the Governor, Lt. Governor & Speaker of the House.
Out of the certified surplus, half of the amount would be placed in a reserve account for the Tennessee Student Assistance Corporation for the purpose of need-based scholarships. The following fiscal year, the remaining half of surplus revenue would be used to adjust down the sales tax rate on food & food ingredients for human consumption.
Our recent stories on state revenues and budget outlook:
“June Tax Collections Above Budgeted Estimates”
“State’s May Revenues Show Continued Improvement”
“Governor Haslam Prepares for Less Federal Monday in Tennessee”
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