Lawmakers Must Have the Courage to Return the Surplus

May 23, 2007 11:20PM

By Drew Johnson Imagine standing at the register at your neighborhood Kroger. The cashier scans your last item and announces your total, “$78.34, please.” You hand her a $100 bill and she pulls your change—$21.66—from the register. But instead of giving it to you, she stuffs the cash into her pocket. You ask for your money, but she insists that you shouldn’t expect to get your change back. “Come again soon,” she says as you rush away looking for a store manager or a police officer. In real life, that never happens. The cashier knows better. She would be fired, if not arrested, for theft. Yet that’s exactly what the Governor and the Tennessee General Assembly do each time there’s a budget surplus. They steal your money. When the state government does it, however, it’s much more than $21.66—100 times more. This fiscal year, some state lawmakers plan to steal an average of $2,166 from every man, woman and child in Tennessee. A surplus is created when the state government collects more money in taxes than it costs to deliver the services promised in the state budget. A more accurate term for a surplus is “taxpayer overpayment.” This fiscal year, the state is flooded with taxpayer overpayments. The state expects an extra $1.3 billion, dwarfing last year’s record taxpayer overpayment of $909 million. In 2005, the Tennessee Center for Policy Research made a seemingly commonsense recommendation: Refund state surpluses to you, the taxpayer. We also advised lawmakers to do this by eliminating Tennessee’s sales tax on groceries for as long as the surplus funds allow. This plan helps Tennessee’s poorest family by temporarily removing one of the state’s most regressive taxes. Moreover, by rolling the surplus money into the next year’s budget, the state can return your money without reducing government spending by a cent. Amazingly, if lawmakers refunded the entire current surplus, there would be no state sales tax on groceries for two and a half years. I’m not idealistic enough to think that the state leaders can pry their greedy claws away from the entire surplus. After all, the Governor has already promised to throw over $280 million of the surplus at Tennessee’s broken education system. State senators have proposed over 400 new pork projects, which stand to drain tens of millions more from surplus funds. Of the state’s $1.3 billion surplus, $600 million is in the form of one-time surplus dollars. At the very least, Tennessee’s lawmakers should give that money back to taxpayers. With next year’s state grocery tax revenues estimated at just over $500 million, there’s no reason not to eliminate the sales tax on groceries for the entire fiscal year—July 1, 2007 to June 30, 2008. With the final days of the legislative session upon them, the Governor and the General Assembly have a simple decision to make: steal your money like common thieves or return your change by temporarily eliminating the grocery tax. Let’s hope for all of Tennessee’s struggling families that our lawmakers have the courage to make the right choice.