Bredesen

Tennessee governor Phil Bredesen has proposed increasing a tax on cable television service to help raise money for education and public safety.

The tax proposal would remove a current exemption for state residents on the first $15 of their cable bill, making the entire amount subject to the state sales tax.  The monthly cost — about $1.35.

The “cable tax” was part of a package of “revenue enhancers” proposed by the governor to create a $50 million dollar earmark targeted to preserve government jobs in education, as well as foresters and those working in the criminal justice system.

Bredesen’s proposal may stem, in part, from a lawsuit filed by satellite providers against the state.  They’re upset customers must already pay sales tax on the entire amount of their satellite service bill, while cable gets a special partial exemption.  Bredesen’s saw their point.

“You can’t tax the same service from one person and not tax it from another,” Bredesen told reporters at a press event earlier this month. “I don’t think of it so much as though we’re raising taxes across the board on television, but really we’re kind of fixing a loophole.” 

Loophole or not, many consumers and Republicans in the state legislature don’t like the proposal.

Senate Speaker Ron Ramsey (Blountville), among several other Republicans participating in a press release objecting to the tax, said raising cable rates is not an appropriate way to balance the state budget.  The Republicans called instead for spending and tax cuts to encourage businesses to create more jobs.

Governors across all 50 states are looking for creative solutions to solve state budget woes as the American economy, and tax receipts, continue to drag.  Many are proposing increases in service fees, new targeted taxes, and one state — New York, is proposing to delay sending some residents their state tax refund checks until this summer.

Republicans, who control both houses of the Tennessee legislature, suggested the cable tax would not find its way into law. 

Bredesen challenged the Republicans to come up with spending cuts or new revenue sources themselves.

“You’ve got to move beyond saying ‘I don’t like this,‘ and into ‘I don’t like this, and here’s how we plan to fix it,'” Bredesen said in a statement.

[flv width=”480″ height=”380″]http://www.phillipdampier.com/video/WSMV Nashville Lawmakers Propose Increase In Cable Bill 2-4-2010.flv[/flv]

WSMV-TV in Nashville discusses Tennessee’s cable tax proposal and finds out what area residents think about it. (2 minutes)