Updated May 2, 2008

Consequences of Tennessee's Failure to Invest

PUBLIC INVESTMENT:

• 43^rd in financial commitment to public health (per person)
• 44^th in financial commitment to elementary and secondary school (per student)
• 48^th in financial commitment to higher education by state and local government (per person)

OVERALL RETURN ON INVESTMENT:

• 45^th safest state
• 47^th healthiest state
• 47^th most livable state

INVESTMENT RETURNS (IN PAINFUL DETAIL):

• 41^st in children living above the national poverty line
• 41^st in percent of 4th graders who read at a 4th grade level
• 46^th in percent of 4th graders who can do 4th grade math
• 41^st in percent of population who graduated from college
• 42^ndin high school graduation rates
• 42^nd in citizens living above the national poverty line
• 44^th in higher education enrollment
• 46^th in seniors living above the national poverty line

WHAT TENNESSEE DOES WELL:

• 6^th in children living in extreme poverty
• 10^th in young adults not attending school. not working, and with no degree beyond high school
• 3^rd in meth lab incidents
• 5^th in percent of adults overweight or obese
• 8^th in grandchildren in the care of grandparents

Data sources: Annie E. Casey Foundation. “Kids Count: A National State-by-State Effort to Track the Status of Children in the US. / Congressional Quarterly, Inc. 2008. Governing City & State. Washington, DC. / Morgan, Kathleen O’Leary and Scott Morgan (eds). State Rankings 2008: a Statistical View of America, Eighteenth Edition. CQ Press. / Morgan Quitno Press. “Results of the 2007 Most Livable State Award”. State and City Ranking Publications. / United Health Foundation. 2006 Edition. “America’s Health Rankings: A Call to Action for People & Their Communities”. Minnetonka, MN.

PROBLEM:

Tennessee's tax system hurts all Tennesseans and cannot adequately supply the state's basic services.

• It is irrational and fails to meet the state's needs by levying taxes in such a way as to let wealthier sectors of the population, who spend little of their income on items subject to the sales tax, pay a fraction of what low and middle-income families pay.
• With the growth of Internet shopping and the shift to a more service-oriented economy, the sales tax has become increasingly ineffective in the 21st Century. April, 2010 was the 23rd consecutive month that sales tax revenues in Tennessee declined.

SOLUTION:

Tennessee needs to reduce its dependence on the sales tax and embrace a more balanced, common sense approach to funding state services. Long term, Tennessee needs to consider comprehensive tax restructuring, including full repeal of the food tax, reduction of the sales tax, closing corporate tax loopholes, and establishing a progressive state income tax.

• Proposals such as the Tax Modernization and Economic Stimulus Act and the Tax Cuts and Job Creation Act do exactly that. TFT is continuing to work toward passage of such reform as a long-term objective.
• Other initiatives such as the Food & Business Tax Fairness Act, will make immediate and measurable progress in addressing the fundamental problems with Tennessee's tax system.

With a fair and adequate tax system, we can be proud of Tennessee.

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