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USA Today ranks Tennessee as “poor” in several ways

USA Today ranks Tennessee as “poor” in several ways

The week after Gov. Phil Bredesen signed a budget that finally put the state on solid financial footing, a USA Today state-by-state analysis characterized Tennessee as “poor” in the areas of spending restraint, bond rating and taxation methods.

Of course, the time frame of the study published earlier this week—fiscal years 1997 through 2002—takes in all of Tennessee’s years of turmoil and none of the latest recovery period. Unfortunately, for a governor basking in the glow of his freshman year successes, the budget cuts Bredesen pushed through this year fall outside the survey’s scope.

Meanwhile, the airport-and-hotel newspaper names Utah, Georgia and Delaware as the best-run states. Lumped in the bottom 10 grouping with Tennessee are California, which the newspaper says spends about $1 billion a month more than it takes in, and—you guessed it—Mississippi.

The general thesis of the USA Today survey is that the states themselves—and not the current economy—are to blame for their own financial woes, having increased spending and cut taxes too much during the boom years of the 1990s without correcting those trends to mirror the more gloomy economic period that’s followed.

The judgment of Tennessee’s performance during the survey’s period is, of course, on the money. Don Sundquist, who was governor during the period, never really tackled the matter of controlling state spending, and state outlays increased by an above-average 6.7 percent during the period.

The budget battles began when Sundquist sought to address the long-term adequacy of the state’s taxing system, which he termed outmoded for a changing economy. Over the course of the struggle, a state that started out in good fiscal shape slid further and further out of control because Sundquist tolerated poor fiscal management as part of the broader fiscal war.

On this point, USA Today and Governing magazine, whose analysis of tax systems the newspaper used to help form its rankings, agree with Sundquist. Noting Tennessee’s staggeringly high sales tax rate and last year’s legislative passage of another sales tax hike, Governing offers this analysis of Tennessee’s tax system: “There’s something the state seems to fear more than high sales taxes, and that’s any kind of broad-based income tax—which is probably the only realistic way to deal with the sales tax problem.”

The survey terms Tennessee’s reliance on sales taxes as a “dead horse”—inadequate for a changing economy. The three states USA Today ranks as the best run, incidentally, all rely predominantly on income taxes.

But, of course, Bredesen has recognized the state’s tax debate fatigue and has taken this issue off the table for at least his first term. Then again, while Bredesen doesn’t want to make his governorship about taxes, neither does he want it to be primarily about cutting budgets. Finding somewhere else to stand will be his major challenge.

In the meantime, Governing notes the immeasurable losses Tennessee suffers from residents crossing the border to shop in other states. It quotes one high-level state employee, for example: “I’m about to buy a new car in Kentucky. I’ll save about $2,400 in taxes. And though I feel a little twinge of guilt, there’s no way they’ll ever catch me.” —P.A.

Plate gate

Now that Gov. Bredesen has allowed the “Choose Life” license plate bill to find its way onto the law books without his signature, opponents of the political plates say they’re contemplating their next move. ACLU of Tennessee executive director Hedy Weinberg says the civil liberties organization is “seriously exploring litigation” and has lawyers lined up to argue the case if they decide to go that route.

Lost in the hullabaloo surrounding the “Choose Life” plates are the three constitutional issues that have raised liberty lovers’ hackles. First, opponents allege that the plates violate the First Amendment because they bear a political slogan rather than a “viewpoint-neutral” message. They say that’s a standard test for government-sanctioned speech. Meanwhile, they say, pro-choicers attempted to pass a pro-choice license plate bill, but it failed, furthering the argument that state government is taking sides in a controversial debate.

The next problem plate-haters raise is that the money from the sale of the tags must go to companies that affiliate with New Life Resources, even while state law prohibits legislation that expressly benefits one corporation.

Finally, these insistent civil libertarians contend that it’s a violation of the so-called doctrine of separation of church and state for the government to endorse religiously affiliated corporations. And many of the 49 organizations that are cozy with New Life Resources self-identify as religious entities, according to the ACLU.

Look for a protracted legal battle over rectangular pieces of metal to take shape in the coming months. All this because the guy who was supposed to take sides in this controversial debate—the governor—instead offered only a timid condemnation. Though low on principle, it was a first-term political pro choice, giving something to the right by not vetoing it and something to the left with the rhetorical slap at the right. It wasn’t like former Kansas Gov. Bill Graves—a Republican—who last year vetoed the “Choose Life” plate, saying that vehicle tags shouldn’t be used as moving billboards for editorial comment. But, then again, we’re not in Kansas anymore. —J.S.


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