By Chas Sisk • THE TENNESSEAN

Nearly a decade after a fight over a state income tax brought angry crowds to the Capitol, Tennessee lawmakers are poised to open a debate over banning the tax once and for all.

The state Senate is taking up a proposal that would explicitly place a ban on the tax into Tennessee’s constitution. The vote, which could take place as soon as Thursday, would set up an election-year litmus test for legislators and move voters a step closer to a statewide referendum on the ban in 2014.=

Tax reform advocates say the constitutional amendment would make it harder for state officials to manage future budget crises. The income tax’s foes, however, say a constitutional amendment is needed to drive a stake through the heart of the issue before it resurrects.

“I want to tie government’s hands on this issue,” said state Sen. Brian Kelsey, R-Germantown, and the measure’s sponsor. “I don’t want there to be an income tax ever.”

Seven states have no income tax whatsoever. Tennessee and New Hampshire are the only two that tax investment income but not salaries and wages.

The amendment would add language specifically banning a tax on personal income but would let the state continue to collect the tax on investment income.

Tennessee’s arduous process for changing the constitution means the earliest a proposed amendment could come before voters would be 2014. That means the tax would remain an active political issue for at least three more election cycles.

The proposed amendment will mark the first serious debate over the income tax that the legislature has held since 2002, when then-Gov. Don Sundquist proposed a flat tax that would raise $1.2 billion and cut Tennessee’s sales tax.

The plan triggered a spirited public debate that has been credited with establishing Republican majorities in both chambers of the state legislature and may have laid the foundation for the anti-tax tea party movement in Tennessee.

Need is questioned

Even in 2002, the constitutionality of Sundquist’s plan was in doubt.

The state Supreme Court has ruled three times that the legislature lacks the authority to tax salaries and wages. The most recent of those rulings was in 1964, and the amendment’s supporters say an explicit ban would settle the issue.

But Dick Williams, a board member with Tennesseans for Fair Taxation, a group that favors an income tax that would reduce sales taxes, said the legislature should not make it any harder to pass an income tax.

“The so-called conventional wisdom is that even suggesting passage of an income tax is political suicide,” Williams said. “But they shouldn’t foreclose that by amending the constitution.”

The measure appears likely to clear the Senate, where support for an income tax is low. It faces a more difficult challenge in the House, where it remains in committee.

Kelsey said he plans to start to push for House passage once it clears the Senate. If it passes both chambers this session, the legislature would have to pass it again by a two-thirds majority after this year’s election to get the amendment on the ballot in 2014.

“This is exactly the time in which we can possibly get a two-thirds vote for this in the House and the Senate,” he said. “I think opposition to an income tax is very strong right now. … This is a real amendment that I think has a real chance of passing.”

The state Supreme Court has ruled three times that the legislature lacks the authority to tax salaries and wages. The most recent of those rulings was in 1964, and the amendment’s supporters say an explicit ban would settle the issue.

Your browser may not support display of this image. But Dick Williams, a board member with Tennesseans for Fair Taxation, a group that favors an income tax that would reduce sales taxes, said the legislature should not make it any harder to pass an income tax.

“The so-called conventional wisdom is that even suggesting passage of an income tax is political suicide,” Williams said. “But they shouldn’t foreclose that by amending the constitution.”

The measure appears likely to clear the Senate, where support for an income tax is low. It faces a more difficult

Kelsey said he plans to start to push for House passage once it clears the Senate. If it passes both chambers this session, the legislature would have to pass it again by a two-thirds majority after this year’s election to get the amendment on the ballot in 2014.

“This is exactly the time in which we can possibly get a two-thirds vote for this in the House and the Senate,” he said. “I think opposition to an income tax is very strong right now. … This is a real amendment that I think has a real chance of passing.”

The Commercial Appeal
By Daniel Connolly

The Tennessee state Senate voted 31-0 this week to ban the sale of “international driver’s licenses,” which are sham documents sold to immigrants in storefront operations around the region.

“I am very happy that the Senate has taken this step toward helping out the immigrant population in Tennessee,” said the bill’s sponsor, State Sen. Brian Kelsey, R-Germantown. He said he learned about the licenses from articles in The Commercial Appeal last year.

The bill passed Monday as part of the Senate’s consent calendar, which is for non-controversial items.

To become law, the measure must also pass the state House of Representatives and receive Gov. Phil Bredesen’s signature.

In the House, the bill hasn’t advanced beyond the subcommittee level. Sponsor Jeanne Richardson, D-Memphis, says she plans to speak with a representative of a Hispanic community group before taking it further.

“I want to make sure that it doesn’t have some secondary effect that hurts the immigrant population,” she said.

Advertisements for the international driver’s license, or licencia internacional, appear in Hispanic newspapers around the region. The authentic-looking cards and booklets are issued by groups with names like “The International Automobile Driver’s Clan.”

Some ads have explicitly said that the sham licenses give people the right to drive.

Other ads describe the document as a translation of a license from the bearer’s home country.

The products are especially appealing to illegal immigrants, who can’t get Tennessee driver’s licenses and may lack any identification at all. But a motorist who presents the documents to an officer can be charged with driving without a license.

Despite this, the international driver’s license has become a de facto secondary identification for immigrants over the past few years, with some auto dealers and insurance agents in Memphis advertising that they accept the licenses as ID.

Mauricio Calvo, the head of the group Latino Memphis, says he has mixed feelings about the international driver’s license. On the one hand, the documents are worthless for driving, but on the other hand, they’re better than nothing, and immigrants can use them to get real insurance, he said.

He said Kelsey’s bill is a “good first step.”

“But if we’re going to take it away, there should be another option for people to drive legally or identify themselves,” he said.

He said he’d like to see Tennessee offer real driving documents to illegal immigrants.

Tennessee ended its “driving certificate” program for illegal immigrants in 2006 after complaints of people crossing state lines to get the documents.

Kelsey’s proposed law would make it a Class B misdemeanor to advertise or sell international driver’s licenses. Violators could face up to six months in jail and a criminal fine up to $500.

Sellers could also face civil fines up to $3,000 per violation.

Last month, the state attorney general’s office used existing language in the Tennessee Consumer Protection Act to bring civil charges against a Nashville business for marketing the licenses. It was the first case of its type in Tennessee.

By Richard Locker

NASHVILLE — Lawmakers began work on a state constitutional amendment Tuesday to ban an earned-income tax and local payroll taxes.

If it wins legislative approval this year, the earliest it could be ratified by Tennessee voters is 2014. Despite that, its sponsor said the resolution is needed now to ward off an income tax bill filed in January but given no chance of passage.

“This is a real issue that is facing this state today,” declared Sen. Brian Kelsey, R-Germantown. “In these difficult economic times, I think Tennesseans need assurance they will not face an income tax this year.”

By winning a 7-3 Senate Finance Committee vote, Kelsey’s resolution jumped the first of several hurdles it faces before Tennesseans can ratify or reject it on the 2014 statewide ballot.

The last time legislators considered a broad-based income tax, in 2002, it fell five votes short of House passage and never reached the Senate floor for a vote. Since then, half of the members who backed it retired or lost re-election. In addition, Republicans won control both chambers, leaving an income tax with virtually no chance of passing.

“Tennesseans are not under siege of having an income tax,” said Senate Democratic Leader Jim Kyle of Memphis, who voted against the resolution.

Sen. Joe Haynes, D-Nashville, called it “political pandering, playing to the next election.”

Kelsey, who won a special December election for a vacant seat, is up for election this year for a full term.

He portrayed the threat of an income tax as real, citing the bill already filed and previous efforts in Memphis to enact a local payroll tax.

Sen. Doug Overbey, R-Maryville, voted for the resolution but said, “I don’t think we should be overstating what we’re doing and what a resolution does. I think we ought to level with the people.”

To reach the voters for a ratification vote, the resolution must win approval by this legislature by majority votes and then win two-thirds approvals in the next legislative term, in 2011 or 2012.

WSMV

NASHVILLE, Tenn. — The sponsor of a measure that would declare an income tax and payroll tax unconstitutional in Tennessee says it’s necessary because of the poor state of the economy.
The proposed constitutional amendment sponsored by Republican Sen. Brian Kelsey of Germantown was approved 7-3 in the Senate Finance Committee on Tuesday. The earliest it could go before voters is 2014.

Even though the state constitution already says an income tax is not allowed in Tennessee, Kelsey said the difficult economic times may prompt lawmakers to try to pass an income tax.

“We’ve got eight members of the Legislature who proposed an income tax this year, so if we don’t address this issue now, then when are we going to address it?” Kelsey asked. “In these difficult economic times, I think Tennesseans need the assurance that they will not face an income tax.”

He said the measure would also clarify that a city or county “cannot enact any tax that’s not specifically authorized by the constitution and the Legislature.”

Kelsey said the legislation is also necessary because it’s uncertain how the Tennessee Supreme Court will rule in the future.

However, lawmakers opposing the measure said it’s not needed because of what’s currently in the state constitution and that Kelsey’s motivation is strictly political.

“We’re doing some political pandering,” said Sen. Joe Haynes, D-Nashville. “I’m just not in the mood to pander this morning.”

Senate Minority Leader Jim Kyle said Kelsey is creating an unnecessary concern.

“People of Tennessee are not under siege of having an income tax,” said Kyle, D-Memphis. “We’ve got people who don’t have jobs. We’ve got roads that aren’t being maintained the way they need to be, and we’ve got a higher education system slipping into the abyss, and we’re up here putting on a show.”

Despite the opposition, Kelsey believes he has support to see the measure through.

“I’m cautiously optimistic with 15 co-sponsors we can get it passed,” he said.

BY LUCAS L. JOHNSON II
Associated Press Writer

NASHVILLE, Tenn. (AP) — An income tax and payroll tax would be declared unconstitutional under a proposed constitutional amendment advancing in the Senate.
The measure sponsored by Republican Sen. Brian Kelsey of Germantown was approved 7-3 in the Senate Finance Committee on Tuesday. The earliest it could go before voters is 2014.

Lawmakers who voted against the proposal questioned its necessity because the state constitution already says an income tax is not allowed in Tennessee. But Kelsey says the legislation is necessary because it’s uncertain how the Tennessee Supreme Court will rule in the future.

He wants to “ensure Tennesseans … in these difficult economic times they’re not going to face an income tax.”

By Tom Humphrey
Humphrey on the Hill
Tom Humphrey’s blog on politics and legislative news in Tennessee

NASHVILLE – Anyone selling beer from a drive-through window would have to be certified under the state’s “responsible vendor” law under a bill approved unanimously Wednesday by a state Senate committee.

As originally introduced, SB2486 would have prohibited drive-through beer sales. Sen. Mike Faulk, R-Kingsport, had delayed action on the bill for several weeks while considering various proposed amendments.

The amendment finally settled upon was adopted Wednesday by the Senate State and Local Government Committee, which then unanimously approved it.

As amended, stores will still be permitted to sell through drive-through windows, but if they do so, employees will have to be enrolled in the “responsible vendor” program.

The program is voluntary for most beer sellers. It requires that an employee attend training classes on alcoholic beverage laws and how to identify potential customers who are intoxicated or underage, Faulk said.

Those attending the class get a certificate that must be annually renewed.

The bill now goes to the Senate floor. It still awaits a committee vote in the House, where it is sponsored by Rep. Jon Lundberg, R-Bristol.

York Institute

The Senate Education Committee recommended against the proposed elimination of $2.3 million in state funding to York Institute, a 700-student high school in Fentress County founded by World War I hero Alvin C. York.

Gov. Phil Bredesen’s proposed budget calls for ending state support as part of state spending reductions. But Sen. Ken Yager, R-Harriman, who represents Fentress County, said the state should honor a commitment made to York 85 years ago.

“We do not want to be the General Assembly that pulls the plug on this school, which was Sgt. York’s dream for rural education,” he said. “Tennessee made a commitment to fund the school in 1925 and since that time it has been a model institution bearing his name through 14 governors and 64 General Assemblies.”

The committee also heard appeals from York’s son, Edward York, York Institute Principal Phil Brannon and Mike Jones, Fentress County school superintendent. Jones said the county would face major problems in making up the lost state funds to continue educating the 700 students.

Birth certificates

The state would issue birth certificates for stillborn infants under legislation approved Wednesday by committees of both the House and Senate after they heard appeals from two mothers of such children.

“It’s just a horrific thing to go through and have nothing to show for it,” said Rebecca Dyal of McKenzie in testimony to the House Public Health Subcommittee. “All that we’re asking is for the state to recognize that they (the infants) were here.”

Beth Barnett of Cordova told the Senate General Welfare Committee that a birth certificate would acknowledge an event “for basically psychological reasons and grieving.”

“But it’s also like a kick from the state when you find out you’re going to walk out of the hospital with almost nothing; and then you find out that the state doesn’t even recognize that you even gave birth, period,” she said.

The bill – HB3286 – calls for issuance of a birth certificate, upon the request of parents, for stillborn infants after 20 weeks or more into a pregnancy.

The bill was approved unanimously by both committees. The Senate version, sponsored by Sen. Brian Kelsey, R-Germantown, next goes to the Senate floor for a vote while the House version must made two more committee stops.

Prison meals

Legislation that would have required that most prison inmates be fed just twice a day was withdrawn from a Senate committee Wednesday, and the sponsor said it is likely dead for this year.

Sen. Doug Jackson, D-Dickson, said Department of Correction officials were concerned that some inmates might not get enough food if the bill was passed and he wants to study the matter further.

He said the goal of the bill was to save the state money, not to punish inmates.