Gas tax increase supporters initially believed they had scored a great political coup on Monday when Washington insider Grover Norquist, founder of Americans for Tax Reform (ATR), declared his support for the amended version of Gov. Haslam’s IMPROVE Act that passed the Senate Transportation Committee last week. That amended version reduced the proposed gas tax increase from 7 cents per gallon to 6 cents per gallon.
But the fierce backlash from conservative opponents of the gas tax increase in Tennessee to the last minute attempt by supporters of the governor’s plan to bolster its chances by calling in a “celebrity ” who has never lived in the state and knows little of the intricacies of the bill or the state’s budget, spells more, rather than less, political trouble ahead for the governor and his allies.
“The recent amendments made by the Senate, and supported by Gov. Haslam, have improved the bill to the extent that the bill is now a net tax decrease, and thus not a violation of the Taxpayer Protection Pledge…ATR scores the amended version of SB 1221 / HB 534 as a net tax cut and therefore Taxpayer Protection Pledge compliant,” Norquist wrote “in a memorandum to the members of the Tennessee General” cited in a statement released Monday by the office of Senate Majority Leader Mark Norris (R-Collierville).
Norquist did not offer an explanation of who at ATR scored the amended version of SB 1221/HB 534 (The IMPROVE ACT) or what data ATR used to conduct that scoring.
“It is clear that Grover Norquist is using Common Core math in his calculations, since this is not a tax cut, or even close to revenue neutral,” former Nashville talk radio host Steve Gill tells The Tennessee Star.
“Even with Inside-the-Beltway Washington, D.C. calculations, the numbers don’t add up,” he adds.
“ATR’s new position is particularly concerning because we don’t even have actual final numbers on what the Senate plan does,” Gill notes.
As The Star reported on Monday, thirty members of the Tennessee General Assembly have signed the ATR Tax Pledge, and many of them have publicly supported the governor’s gas tax increase. Most of them declared their support prior to the amendments in the Senate version that Norquist claims to be familiar with now.
“I would like to ask a question of Grover Norquist, Senator Norris and Gov. Haslam,” former State Rep. Joe Carr tells The Star.
“They are claiming the governor’s IMPROVE Act is revenue neutral because it’s reducing taxes in a handful of areas, while dramatically increasing the gas tax,” he says.
“But revenue neutral for whom?” Carr asks.
“What individual out there who will pay these extra gas taxes is able to benefit from the Hall Income Tax reduction, the Franchise and Excise Tax reduction, the manufacturers credit, and the tiny reduction in sales tax for food in such a way this bad bill will be ‘revenue neutral’ for their household budget?” he continues.
“The Tennessee working family is going to be carrying the burden of this tax increase, while the same few people who always benefit from ‘targeted tax cuts’ will benefit again,” Carr says.
“That’s just nuts. That sounds like something liberal Democrats in Washington do,” he concludes.
“I am just really disappointed that a person with as much political experience as Grover Norquist would succumb to the idea that a government has the capacity to swap equally one tax for another, ” State Rep. Andy Holt (R-Dresden) tells The Star.
“We’re transfering the burden of this tax to people who can afford it the least, young families and the working poor,” Holt adds.
“I am a 35-year-old small business owner and farmer with six children. I don’t pay Franchise and Excise Taxes. I don’t pay Hall Income Taxes,” he says.
“What do I get in return for this bill?” Holt asks of the governor’s IMPROVE Act.
“For every $100 I buy in groceries I get $1 off. But my gas taxes go up directly and significantly, and everything I buy that is transported by truck goes up indirectly,” Holt says.
“We didn’t increase taxes last year to offset the phase out of the Hall Tax. We didn’t increase taxes two years ago to offset eliminating the gift and inheritance taxes,” Ben Cunningham, founder of the Nashville Tea Party, tells The Star.
“And we still have record surpluses BECAUSE we are a low tax state attracting record capital investment and job growth,” he adds.
“We don’t need to increase gas taxes just to comply with some arbitrary balancing calculation. No gas tax Hike!!” Cunningham concludes.
“He clearly has no idea at all what the amended version of the governor’s gas tax increase plan that passed the Senate contains. It is a net tax increase, period. Anyone with any common sense knows that. Grover Norquist has, with one reckless and poorly researched letter, destroyed any credibility he ever had with conservatives in Tennessee,” a local Tea Party activist says.
Norquist’s conservative bona fides have been openly questioned by many long-time activists, especially in light of his 2016 endorsement of Senator John McCain, the Arizona “establishment” Republican who famously referred to Tea Party activists as “hobbits.”
“I’m very disappointed that Americans for Tax Reform has fallen for the bait and switch tactic often used by liberals,” Tennessee attorney and Tea Party Nation founder Judson Phillips tells The Star.
“They offer to cut one tax in exchange for an increase in another and then a couple of years later come back and tell us we must now raise the tax that was cut. The IMPROVE act is not revenue neutral. It is the biggest wealth grab in the history of this state. With the improve act Tennessee moves from being a tax friendly state into the column of wasteful tax and spend states headed up by California and Illinois,” Phillips says.
State Senate Majority Leader Norris, who is considering a possible run for governor, sees it differently.
“We have worked diligently to rebuild our state, not only with a focus on keeping our roads and bridges safe, but to reallocate revenues to maximize the return to Tennessee taxpayers,” Norris said in the statement released by his office on Monday.
“This legislation is the latest along the continuum of cuts providing widespread tax relief for Tennesseans, while paving the way to new and better jobs to Tennessee,” Norris added.
Conservatives, however, were relentless in their criticism of both Norquist and the governor’s IMPROVE Act, which they characterize as a gas tax increase whose purported related tax cuts are nowhere near a balance.
“It is a humiliating turn of events for Grover Norquist to be reduced to breaking his own Tax Pledge in order to curry political favor with big government spending Republicans in Tennessee,” one long time conservative activist tells The Star.
Former radio talk show host Gill says the IMPROVE Act will be a body blow to the middle class in Tennessee if it passes.
“For the working men and women across the state of Tennessee who pull into a gas station and pay higher prices, and pull into the grocery store and pay slightly lower taxes, it will still be a massive net tax increase,” Gill says.
“I am particulary apalled that Grover Norquist and ATR claimed credit for passing the Hall Income Tax cut last year, despite being completely absent when it was passed. Now he’s trying to claim credit for a tax cut last year against a tax increase this year,” Gill points out.
“Their Franchise and Excise tax numbers are a guess at best,” Gill says of the purported tax reductions in the amended Senate Bill.
“And they’re still trying to claim a cut based on $18 million in open container revenue that will be returned to the state, which is tax money we’ve already paid,” Gill adds.
“Not only is this a significant increase in taxation, it completely ignores the fact that nearly $189 million of current gas tax has been diverted to the general fund!” Mark Skoda, founder of America First Tennessee, tells The Star.
“Norquist assumes that this increase is netted out and therefore meets his Taxpayer Protection Pledge. However, Tennesseans will be paying more each and every day without guarantees that the roads would get better or funds would be used solely for infrastructure. If past is prologue, we can assume more diversion of funds. This is hardly conservative!” Skoda concludes.
On Tuesday, the Senate version of the IMPROVE Act will be considered in the State and Local Committee, and the House version will be considered in the House Transportation Committee.