Naifeh Picks His Battle
I've noted several times that House Speaker Jimmy Naifeh, who pinned his political career to the income tax and nearly lost it, has been remarkably quiescent as the Bredesen administration firmly closes the door on the income tax and proceeds with the very budget cutting Naifeh called the "doomsday scenario." Naifeh has been making nice and playing along like he never thought otherwise. It's too odd and not at all in character for him. I've been waiting for something to happen.
Well, in today's Commercial Appeal comes this story wherein it seems that the other shoe may be about to drop.
Bredesen has proposed cutting the money that the State gives to Cities and Counties by 9 percent, just like the rest of his budget. It's produced predictable howls of protest. ow, Naifeh is backing a proposal by Rep. Randy Rinks that would take money from the Hall tax on investment income in place of the 9 percent cut.
The reasoning is that the Hall tax money comes from people and cities that are already wealthy, and so would be less adversely affected by a cut in revenue from that source.
Under long-standing state law, three-eighths of every investment income tax dollar collected is returned to the city or country where the taxpayer resides, with the rest going to the state.It's an interesting move. If Bredesen opposes it, he looks like he's protecting the State's wealthy, of whom he's one. If he supports it, he's going to take a hit from those same, influential folks.
The state's four largest cities and well-to-do towns such as Germantown receive a disproportionate amount, because they provide a stronger investment income tax base.
Rinks said the state's wealthier and larger communities are better able to handle the budget crunch than smaller towns and rural counties that depend heavily on the state-shared tax revenue as part of their annual budgets.
Rinks's proposal, the County Relief Act, would provide the state the same $60 million savings that Bredesen's plan would produce.
"The counties would all come out better,'' he said. "Some cities would win, and some would lose.''
It's the first public break by Naifeh from the Bredesen orthodoxy. I'm still a little unclear on what's Naifeh's benefit, other than discomfitting Bredesen; maybe this is to show him who's boss? I welcome any other theories.