Rep. Watson: Lawmakers Cut Taxes, Adjourn In Timely Manner
Friday, April 26, 2013
- by Rep. Eric Watson
This week, We wrapped up one of the most successful legislative sessions in Tennessee history. The first legislative session of the 108th General Assembly was focused on passing commonsense legislative initiatives to aid both immediate and long-term economic development in Tennessee’s private sector.
Measures to cut taxes, ensure employers find Tennessee an attractive destination for their businesses, and reinvigorate the state’s education system to better train the next generation of Tennessee workers were among the House's priorities. In addition, House legislators worked hard this year to ensure the state continues to foster an environment where new jobs are created and small business can thrive.
I am proud of what the legislature accomplished together this session, and adjourning this early reflects the legislature’s commitment to conducting its business in an efficient and effective manner. I have enjoyed working with Governor Haslam and my colleagues in the General Assembly to help make Tennessee the number one location in the Southeast for high quality jobs. I look forward to building upon the progress we have made this session to make our state an even better place to live, work, and raise a family. With a successful year behind us, the House lawmakers are now ready to continue studying sound fiscal policy in order to carry forward this year’s efforts into the next session.
In the final week of the legislative session, the House of Representatives passed Tennessee’s annual budget with an 83 – 14 vote. The bill’s passage was the culmination of months of tireless work crafting a fiscally responsible and balanced budget. The $32.6 billion budget cuts taxes by $43 million, puts $100 million in the state’s Rainy Day Fund, improves our educational system, and provides an even better environment for businesses to grow and for jobs to flourish.
At the beginning of the year, lawmakers promised Tennesseans that fiscal responsibility would be a priority. The budget they crafted holds true to that principle while ensuring Tennesseans get the services they expect.
I want to thank my colleagues for a job well done. With the help of Governor Haslam, House and Senate legislators worked seamlessly to pass a forward-thinking budget that embodies the principles and priorities of all Tennesseans.
Budget highlights include:
At the beginning of this legislative session, House leaders promised they would do everything to maintain the state’s strong financial record, balance the budget, and return hard-earned tax dollars back to all Tennesseans. Over the last several months, they followed through on that promise, ensuring every Tennessean across the state will realize tax savings to the tune of $43 million this year, including:
* A drop in the state sales tax on groceries from 5.25% to a flat 5.00% rate which will save taxpayers approximately $25 million statewide. This tax reduction builds on efforts during the last legislative session which reduced the sales tax on food from 5.5% to 5.25%. Lawmakers hope to continue this trend in years to come;
* Implementation of the second phase to eliminate Tennessee’s death tax, which is set to be completely phased out by 2016. Lawmakers argue the death tax breaks up family farms and small businesses, forcing families to make tough decisions during what is often the most difficult times in their lives: the passing of a loved one. In many cases, families are faced with selling off parts of farms and land or closing a small, family-owned business in order to pay the tax bill. The full repeal of the death tax will represent a $94.6 million tax cut;
* A cut in the Hall tax for seniors 65 and older. The Hall tax is imposed on income derived from interest on bonds, notes, and stock dividends. Since enactment of the Hall tax in 1929, the use of investment savings has grown as a primary source of retirement income. Because of this fact, lawmakers argue the Hall tax is actually an income tax, especially for seniors living on a fixed income. The Hall tax cut approved in the budget raises the income exemption level from $26,200 to $33,000 for single filers and from $37,000 to $59,000 for joint filers. Lawmakers have promised to build on this tax cut in the future;
* And, a continuation of property tax relief efforts passed in previous years to help veterans, seniors, and the disabled population of Tennessee.