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Location: Nashville, Tennessee, United States

7/26/2002

Now We Know the Truth
For three years, Gov. Sundquist has maintained that he only reluctantly came to support an income tax after his initial proposal for business tax reform, announced in his Feb. 8, 1999, State of the State address, was rejected by the General Assembly.

You remember his famous statement in that speech: "All an income tax does is raise the tax burden on Tennesseans and create a way to finance the easy and endless expansion of government. Tennessee does not need a state income tax."

Well... now we know that even as he stood in the well of the House and made that famous declaration, a seeming renewal of his campaign pledge to oppose the income tax, the governor was secretly planning to propose an income tax.

We know it because the governor has admitted, in this interview with WSMV -TV, that he in fact decided to propose an income tax during the Christmas holidays of 1998 - almost two months before his state of the state address.

An excerpt:
With just six months remaining in office, governor Don Sundquist says his biggest disappointment was having to ask for an income tax. ... He said he reached the hard decision after his staff came to him Christmas of 1998 and told him the state's tax structure was collapsing.

The online version of the WSMV story has a typo later in the story in which the fateful income tax decision was made during the Christmas holidays of 1999 - but history shows that Sundquist was already backing the income tax plan proposed by Sen. Bob Rochelle in the fall of 1999. He even called a special session on tax reform so the Legislature could pass it.

History also now shows that, far from being dragged kicking and screaming to an income tax only after his business tax reform plan was rejected, Gov. Sundquist actually planned to go for an income tax from the get-go. He made the decision only a few weeks after being re-elected on an anti-income tax pledge. It's obvious now that the business tax reform plan was merely designed to provide him political cover so he could claim he only reluctantly supported the income tax because the legislature rejected his better plan.

UPDATE: Is the state's tax structure "collapsing," as Sundquist claims? This fiscal year, despite the lingering effects of an economic slump, total tax collections through the first 11 months of the fiscal year are down a miniscule. 0.15% from last fiscal year - and last fiscal year's total revenues were the highest in state history. Collapsing? Not then. Not now. Not at all.