Surplus: The Silence Ends in Knoxville, Sort Of
Knoxville News Sentinel political reporter and columnist Tom Humphrey has finally told Knoxville readers that Tennessee ran a revenue surplus in the 2002-03 fiscal year, but he fails to give them all the facts - and takes a snide swipe at me. In his Sunday column, Humphrey claims Tennesseans seem to have forgotten about last year's big sales tax increase.

Indeed, the $1 billion increase seems almost forgotten. One conservative Web site writer hailed another figure from the money-counter's report - that the state finished the last fiscal year on June 30 with a $2.6 million surplus - as evidence of sales tax solidity and of a "fabricated budget crisis" in prior years. The $1 billion increase was never mentioned. In other words, you can lift $1 billion out of Tennessee pockets, and nobody cares - unless you mention IT.

He doesn't mention me by name or provide readers a link to my website, but of course it is me he's talking about, and this post I wrote back on August 12.

A few comments.

1. I did mention the billion-dollar sales tax rate increase, when I quoted from the Department of Finance's monthly revenue report, where it said Adjusted for the rate change...

2. The tax rate increase was not relevant to my August 12 column, which merely noted that after four years of being told the sales tax - at whatever rate - was unable to produce meaningful revenue growth, that same sales tax produced a small revenue surplus. The sales tax surplus exists even if you factor out the rate increase.

3. Humphrey misleads his readers into thinking there was a $2.6 million surplus of sales tax revenue. The truth is, there was a $28.9 million surplus of sales tax revenue - a far more significant number - which more than offset small shortfalls in other revenue sources.

4. Humphrey simply doesn't deal with the central contention of my August 12 column, which is that the unexpectedly large growth in sales tax revenue is yet more proof that Tennessee made the right choice in not adopting an income tax. For, as I note in the column, States like California that rely heavily on income taxes are facing massive budget deficits. Because the income tax performs more poorly during a sluggish economy than does the sales tax. Hence, had Tennessee followed then-Gov. Don Sundquist's wishes and created an income tax three years ago, Tennessee's budget revenue collections would not be in surplus today, it would be in deficit.

5. By not naming me or my website or providing readers a clue or two of how to find what I wrote, Humphrey denies his readers a chance to see if, A) he is quoting me accurately and in context or not, and B) if he is representing my views accurately or not. By not sourcing the quote, Humphrey leaves his readers no way to judge his accuracy. On the other hand, I meticulously source my data, and provide hyperlinks where possible. [Ed. note Must be that vaunted credibility thing that newspapers have and bloggers don't, I guess. Er... yeah, right.]

The good news is, I have the Internet to respond to Humphrey's column. The bad news is, unless something rather bizarre and unexpected happens, most readers of the Knoxville paper won't ever see this. Humphrey owes his readers better. Heck, he's a smart guy and a good writer and he's capable of giving them better. You just have to wonder why he doesn't.

Maybe you should tell Tom Humphrey to tell his readers the whole truth about the revenue surplus. It's just a thought.