Regaining balance with clear and undisputed tax cut
Critics of the original IMPROVE Act made a legitimate point opposing the bill as first drafted. They argued that state government cannot in good conscience ask for more money when Tennessee is running an overall budget surplus. They were right.
That was then, this is now. The original proposal is no longer before us. Those who still refer to this plan as a tax increase are either being disingenuous or are misinformed. The amended plan now under consideration is not a tax increase in any shape, form or fashion. It is not even “revenue-neutral.” It is a clear and undisputed tax cut.
Esteemed conservative advocacy group Americans for Tax Reform agrees, stating publicly that the bill is a tax cut consistent with their taxpayer protection pledge.
The amended plan rebalances our road fund to recoup the losses experienced due to advances in technology. And this plan finally ensures that big trucking companies and those who drive electric cars and hybrids are paying their fair share.
Under the current bill, most every Tennessee family will pay less in taxes overall than before. We are cutting the sales tax on food from 5 percent to 4 percent. This represents a 20 percent cut and a savings of $9.60 per month for an average family of four. Even if you are a family that watches their wallet and spends as little as possible on food, you will likely save at least $7.72 per month. This far outweighs any hit that same family would take as a result of rebalancing our user fee on roads. Under the amended bill a family of four would experience overall tax savings of at least $2.18 per month. Due to inflation, the value of the tax savings on food will only increase over time.
Over the last six years in Tennessee, we have cut $270 million in taxes. We have made government smaller and more efficient. We have fostered economic growth and attracted jobs and commerce. Most importantly, we have budgeted responsibly and estimated conservatively. As a result of our success, we are out of balance.
This is a good problem to have. Our success has resulted in a surplus in our general fund. Unfortunately, our road fund has not kept pace. Roads and bridges in need of repair are becoming unsafe. Needed road projects are being postponed.
We can fix this problem. We need to return excess dollars from the general fund to taxpayers while fixing our roads and bridges. Only then can we sustain the jobs and growth we are attracting to our state.
Balance is key in all things. Focusing on one’s work at the expense of one’s home life can work – but only for a time. Just because your spouse stays up waiting for you every night after weeks of coming home late without calling, it doesn’t mean the situation is sustainable. One night your spouse won’t wait up – and there will be a packed suitcase by the door.
The day of reckoning is upon us. The time to restore balance is now.
Our problem is simply stated: Our general fund is over-collecting and our road fund is under-collecting. Those looking for a quick and easy fix want to divert funds from the general fund to roads. On the surface, it makes logical sense. But it is a mistake — and a wasted opportunity for real reform.
Tennessee has an outstanding pay-as-you road system that operates with no debt. We accomplished this with dedicated funding through our user fee on fuel.
Our dedicated fund helped earn us a Triple-A bond rating from all three ratings agencies. While other states drown in debt and struggle to pay for new projects while paying off old ones, Tennessee stands without debt. Abandoning our dedicated fund and raiding the general fund opens the door to debt and puts our fiscal stability at risk.
The people of Tennessee don’t want “politically palatable” patchwork solutions that raid the general fund and undermine our user fee. They want bold truths and real solutions.
Tennessee Republicans cut taxes. That’s what we do. This plan not only cuts the tax on food and continues the promise of eliminating the tax on investment income, it restores the property tax cut for veterans and reduces taxes on manufacturers who make things right here in Tennessee.
Other plans cannot and will not deliver the same cuts.
We have a rare opportunity now to institute comprehensive tax reform which reduces the overall burden on our citizens. For Tennessee’s economic growth to continue we must have the infrastructure to support it. We must act now to give money back to taxpayers and keep our roads and bridges sustainable for the next generation. We must regain our balance.
Written by Tennessee's Lt. Gov. Randy McNally (R-Oak Ridge), special to the Express. Contact him at email@example.com.