Senator Joey Hensley, MD; Tennessee 28th District Capitol Hill Week in Review

State’s sound financial footing benefits Tennesseans

Our state’s conservative fiscal strategy is working - creating new jobs and opportunities for Tennesseans. Over the last decade, we have worked diligently each year to prepare responsible balanced budgets that include strategic investments in jobs, education and infrastructure to boost our economy; thoughtful reductions to promote government efficiency and accountability; and even put back savings to weather economic storms. This strategy has yielded great results with the Volunteer State now ranked first in the nation for fiscal stability.

The state’s AAA bond rating delivered by all three major rating agencies earlier this summer helped boost this status. Tennessee’s credit rating reflects the extremely strong confidence the rating agencies have in the state’s capacity to meet its financial commitments. The agencies also look at the fact that we are the least indebted state in the nation per capita, our top-ranked pension plan, and our status as one of only five states without road debt. As 2nd Vice-Chair of the Senate Finance Committee I am very pleased that it was the sixth consecutive year that we earned the agencies’ highest ratings.

So why is the important? Tennessee’s sound financial footing and reputation for being a well-managed state has received the attention of the business world. We outpace the nation for current job recovery and overall business growth. For example, despite obstacles presented by COVID-19, business starts jumped to a record high in the first half of 2021. About 70,118 businesses filed for business licenses over the past year, and 19,983 filed in the second quarter of 2021, the highest quarterly total ever recorded.

The state’s financial stability has also provided an environment to ease tax burdens on Tennesseans. While many states across the nation adopt higher taxes, Tennessee’s state government has done the opposite. Since 2011, our General Assembly successfully cut approximately $880 million in taxes. We have phased out the inheritance tax, eliminated the gift tax, gave Hall Tax relief to senior citizens, and lowered the state’s portion of the sales tax on food, to name a few of the tax cuts. The beneficiaries include the elderly who have saved all their life and utilize investment income to help fund their retirement; farmers who want to leave their family farm to their children, and everyone who purchases grocery food.

And, it is good to remember, these cuts were made despite the fact that Tennessee does not have a personal income tax. That fact is another reason Tennessee is experiencing job growth.

Other tax cuts made over the past decade include:

Eliminated the professional privilege tax ($400 annually) for 15 of the 22 professions which pay it;

Cut taxes on manufacturing to enhance job creation;

Tossed the $6 million gym tax on smaller fitness facilities;

Reduced sales tax on fiber optic cable by $2.5 million;

Saved our agriculture industry professionals $750,000;

Slashed the $455,300 ammunition tax on law-abiding citizens;

Took the sales tax off gun safes and gun safety devices ($321,300), and

Continued and enhanced the Annual Sales Tax Holiday in August both last year and this year. This year we added a week-long sales tax holiday on the purchase of food, including restaurants which were hit hard by the pandemic. ($24.8 million)

We are on the right track! We must continue our efforts by managing state government conservatively, investing in priorities, avoiding debt, and finding efficiencies to put more money back in the hands of taxpayers.