Friday, March 19, 2010

Sounds Like a State Income Tax

Tennessee Governor Phil Bredesen has written a letter to Senator Bob Corker and Congressman Bart Gordon (who is retiring this year) warning them of coming problems should health care pass. Here's a snippet:
Bob and Bart, the problem we face is simple: by 2013 we expect to have returned to our 2008 levels of revenue and will have already cut programs dramatically--over a billion dollars. At that point we have to start digging out--we will have not given raises to state employees or teachers for five years, our pension plans will need shoring up, our cash reserves (rainy day fund) will have been considerably depleted and in need of restoration, and we will not have made any substantial new investments for years. There will have been major cuts to areas such as Children's Services that we really need to restore. On top of these, there are all the usual obligations that need to be met--Medicaid, for example, will continue to grow in excess of the rates of the economy and our tax revenues. It's going to take at least a full decade to dig our way back out and back to where we were before the recession.

In this environment, for the Congress to also send along a mandatory bill for three quarters of a billion dollars for the health reform they've designed is very difficult. These are hard dollars--we can't borrow them--and make the management of our finances post-recession even more daunting than it already is.
Emphasis added to hammer the message--Tennessee need will need more revenue, period. He didn't call for an income tax but how else will they meet obligations?

Before the current tea parties were all the rage Tennessee had their own version of tea parties in 2001-02 in response to former Republican governor Don Sundquist, who was among a group in favor of an income tax. As a result, citizens converged on the capital and began honking their horns for hours on end until they eventually caved. It took two iterations to do it. That's the precedent.

Our current governor knows it well but at some point the money is going to run out and the leadership will either have to raise more taxes outside income or enact draconian cuts. As he says, the health care mandate will force the issue.

And there's no doubt Pelosi and company understand this perfectly. They probably see the health care bill as a force multiplier for spreading the wealth around and more government solutions, which is why she said "pass it and find out what's in it". Once passed they will use the intervening window of time before enactment to explain what 'kicking open the door' means, most likely rescuing us from the house of cards through government takeovers not simply limited to health insurance (all temporary of course).

The GOP will be forced to counter this by running on a platform the Dems and major media (sorry for the redundancy) will happily describe as kicking granny to the curb. They best come up with some better responses soon.

THE GORDON 3/20/10

Looks he found a way to help the Med and in turn the financially struggling TennCare public health care system:
"You lose money on every TennCare patient that crosses the threshold already. Trying to absorb more cuts is just not feasible."
For some reason Tennessee's socialized healthcare problems are not seen as a predictor of what's coming with Obamacare.


Debbie said...

You make the point, Tennessee tried this, it was a huge failure, and one would think Washington would also learn a lesson.

As to the State income tax, I cannot believe they will try that again. There are few states with no income tax, and many have left the other states and moved here for that very reason. Tennesseans will rise up again as they did earlier.

Right Truth

A.C. McCloud said...

Never say never with these politicos.