TN Democrats urge Gov. Bill Haslam to call summer session on taxes, tuition

8:02 AM, Jun 21, 2012   |    comments
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By Chas Sisk, The Tennessean

Democrats in the state legislature asked Gov. Bill Haslam to bring lawmakers back to Nashville for a special session this summer to implement a freeze on college tuition and another cut to the sales tax on food.

With tax dollars beating expectations, Democrats reiterated previous calls to block a planned tuition increase at the University of Tennessee and Board of Regents schools. They also said the state should speed up plans to reduce the food tax by one-quarter of a percentage point.

They said lawmakers, who adjourned for the year May 1, should come back to the Capitol to pass legislation doing both as soon as possible.

"These students will be returning to school in August, and this is an issue that needs to be dealt with sooner rather than later," said Senate Democratic Caucus Chairman Lowe Finney, D-Jackson.

Democrats and Republicans have been battling for months over what to do with tax revenues that have consistently outpaced projections.

Democrats have called for using the money to dial back service cuts, lower taxes or spend on education, including the UT and Regents systems. Republicans have said the money should be saved in case the economy slips back into recession or the federal health-care reform law forces the state to spend more on TennCare.

The latest projections show the state collecting $225 million more than expected this year.

Democrats say this money should be divvied up three ways, with $78 million going to cover proposed tuition increases, $85 million going toward a food tax cut and the remaining $62 million banked in the state's reserve funds.

UT trustees are expected to vote today on a possible 6 percent tuition increase. The Board of Regents, which oversees six state universities, community colleges and technology centers, is weighing a similar increase.

Haslam has pledged to cut the food tax by one-quarter of a percentage point in next year's budget.

Little likelihood

The prospects of a special session appear dim.

The Haslam administration said after the Democratic news conference that it did not want to make budget decisions outside the usual cycle.

"We want to be sure we have a complete picture of what our budget commitments will look like before we interrupt the budget process and start spending funds in an ad hoc way," Haslam spokesman David Smith said in a statement. "The governor has said and continues to believe we need to focus on higher education in Tennessee, and examining the cost structure is certainly part of that process."

The $30 billion budget passed in the spring calls for spending $342.6 million in campus improvements and maintenance, Smith said. It does not reduce the operating budget for higher education.

Lawmakers can go around the governor and call a special session on their own, but only if two-thirds of all lawmakers agree. Democrats hold about one-third of the seats in the Senate and House of Representatives, and they said they would consider petitioning lawmakers for a special session if Haslam declined to call one.

They said the issue also could be taken up if Republicans call a special session to deal with the federal health-care law. Some GOP members have floated the possibility that one may be necessary to implement portions of the Affordable Care Act if it is not struck down this summer by the U.S. Supreme Court.

Like health care, the issues of tax cuts and tuition hikes are likely to stay in the spotlight through the November election.

Republicans, who for the past two years have held both the Tennessee legislature and the governor's office for the first time since Reconstruction, are making their records on tax cuts and managing the state budget central to their re-election campaigns.

Democrats hope to punch holes in their claims, arguing that the GOP could have cut taxes still further without creating a deficit.

"I'm sure some people will campaign on it," Finney said, "but that doesn't change the fact students are going to be returning to college ... and they'll be faced with that tuition bill in the next few days."