NASHVILLE, Tenn. -- The Tennessee House of Representatives approved a 42-cent cigarette tax increase earlier this week and sent it to Governor Phil Bredesen to sign into law, reported The Memphis Commercial Appeal. Tennessee's cigarette tax will jump from 20 cents a pack to 62 cents July 1.
The tax hike will generate about $230 million a year in new revenue. Most of the money is earmarked for a $500 million public education improvement program that the legislature approved last week, said the report. Two cents of the 42-cent increasegenerating about $11 [image-nocss] million this yearwill be channeled into Tennessee's trauma center hospitals. Another $21 million goes into agricultural grant programs.
Despite what the newspaper called the most acrimonious party-line debate of the year, the state House vote was 60 to 34. Unlike the state Senate's 17 to 16 approval last week along party lines, 14 Republicans in the House joined 46 Democrats in voting for the tax increase; 30 Republicans and four Democrats voted no. Democrats hold a 53 to 46 majority in the House, but one member of each party is out for health reasons.
The final vote came after Democrats defeated a string of nearly 20 Republican amendments that Democratic leaders said were designed to kill the bill, the report said. Any House amendment to the bill would have sent the tax measure back to the Senate for concurrence, but two of the Democratic senators who voted for it last week are absent this week, leaving tax supporters one vote short.
The Republicans' basic argument was that Tennessee has a record budget surplus and thus a tax increase is not needed. If you vote for this tax increase when we've got a billion and a half dollar surplus, don't ever go home and call yourself a conservative, said Rep. Frank Nicely (R).
But Democrats countered that there is not enough money without a tax increase to fully fund the education program plus a $57 million anti-crime bill that most lawmakers favor, to restore money the state has been diverting from the highway fund for five years, and to give teachers and state employees a 3% pay raise.
The GOP strategy initially was to block the tax bill from coming to a vote, at least until a Republican plan to spend $100 million in surplus lottery funds on K-12 school construction was passed. But that effort deflated when the Senate Finance Committee, meeting separately while the House debate was underway, killed that proposal.
Both parties caucused to plan their strategies. Republicans pledged to stick with the school construction amendment. Democrats said such a diversion of money would hurt the lottery scholarship program in the long run and vowed to make no deals with the Republicans.
Several Republicans attempted to add amendments that would use some of the cigarette tax proceeds to cut the sales tax on foodan issue near to Democrats' hearts, the report said. But with the certainty that any amendment would kill the tax increase in the Senate, Democrats promised to cut the sales tax on food by a half-cent, to 5.5%, on a separate bill later this week.
Finally, Caucus Chairman Glen Casada (R) moved to end debatewhich passed nearly unanimouslyand the bill was quickly voted on and approved.
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