published Tuesday, January 10th, 2012

Nashville: Gov. Haslam to seek lower Tennessee sales tax on food

NASHVILLE — Gov. Bill Haslam today announced he will seek to begin reducing Tennessee’s sales tax on food and and raising the exemption on the state’s inheritance tax as part of his legislative agenda this year.

Haslam also announced he will push an overhaul of the civil service system for state workers, make it easier for school systems to offer merit pay to teachers, boost the state’s FastTrack grant incentive program for businesses and restructure 22 boards and commissions, including the Tennessee Regulatory Authority.

He also wants to appoint the executive director of the Tennessee Higher Education Commission.

“The issues we are going to bring up today focus on things that matter for Tennesseans, helping us move forward,” Haslam said at an event that was part rally from supporters and administration and, later, a news conference.

The governor said he is asking lawmakers to reduce the state’s 5.5 percent sales tax on food to 5.3 percent at a cost of about $18 million annually. The goal is to get the tax down eventually to 5 percent in three years.

Haslam, a Republican, wants to raise the exemption on inheritance taxes from $1 million to $1.25 million this year, a “first step” toward eventually raising the exemption to $5 million.

He also wants to make it easier to hire and fire state employees and offer merit pay to higher-performing workers. Tennessee State Employees Association officials are already critical about some parts of the plan, warning it could return Tennessee to the days of political patronage.

Other parts of the package include eliminating what he called “antiquated” state and local salary schedules for teachers, which are now based on seniority and training. He said it would give school systems flexibility in deciding how to address pay in hard-to-staff schools and subjects.

In yet another area, Haslam said he wants to strengthen the Department of Economic and Community Development’s FastTrack program by putting more money into the effort and providing more flexibility in helping companies in areas such as site preparation and relocation expenses.

Another Haslam bill restructures 22 state boards and commissions. Among them is the Tennessee Regulatory Authority, which oversees rate increase requests from some for-profit utilities such as the Tennessee-American Water Co.

Haslam is proposing creating a five-member, part-time board for the TRA and creating an executive director whom he would appoint. The current board is four full-time members. Part-time board members would be paid, but Haslam said cost savings could go toward hiring better experts.

Observers say Tennessee would become the only state in the nation with a part-time board.

Haslam also wants to appoint the executive director of the Tennessee Higher Education Commission and have him or her report to him.

House Speaker Beth Harwell, R-Nashville, said she supports the proposals.

about Andy Sher...

Andy Sher is a Nashville-based staff writer covering Tennessee state government and politics for the Times Free Press. A Washington correspondent from 1999-2005 for the Times Free Press, Andy previously headed up state Capitol coverage for The Chattanooga Times, worked as a state Capitol reporter for The Nashville Banner and was a contributor to The Tennessee Journal, among other publications. Andy worked for 17 years at The Chattanooga Times covering police, health care, county government, ...

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