Taking on Water 

As predicted, the ship is sinking

As predicted, the ship is sinking

By Phil Ashford

During all the hyperbole of the state’s budget battle, there was no shortage of wolf-crying going on among adherents to Gov. Don Sundquist’s tax-reform ambitions. No doubt it comes as a painful relief to some that at least one dire prediction has come true.

A major government financial watchdog, Standard & Poor’s, has reduced the state’s AAA bond rating to a less favorable AA, prompting the governor and others, who warned of such a rating plummet, to shake their heads in knowing disappointment. “This downgrade does not come as a surprise,” the governor said in the wake of the news. And he warned of even more drastic consequences. “If we do not address the fundamental structural problems in our tax system, we have been told that we will be downgraded further.”

The state’s revenue gulf was never as wide as the sea of rhetoric about financial peril would have suggested. In an $18.3 billion budget, $300 million is not the end of the world, either way. But what began as a fairly small matter 18 months ago escalated over time.

By the time this past June rolled around, partisans were claiming that the very future of the state was at stake. Without the governor’s plan, they argued, Tennessee would slip into being a benighted backwater of ignorance, squalor, and high-priced candy bars. Opponents similarly escalated their claims about the dire consequences for the state coming from an income tax.

We can never know if the triumph of the anti-tax forces will be long remembered as a kind of hillbilly Battle of Tours, with Sen. Marsha Blackburn cast as Charles Martell turning back the Moorish conquest. But we can at least know that people such as Sen. Douglas Henry weren’t completely crazy when they predicted the bond rating would plummet. Of course, we also can’t know whether Standard & Poor’s quick action to trim back the bond rating was influenced by all the predictions they made.

The one certainty at this point is that the tax proponents have six months now until the next legislative session for collecting and deploying I-told-you-sos.

The one certainty at this point is that the tax proponents have six months now until the next legislative session for collecting and deploying I-told-you-sos.

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