ASK MAYORS FOR GROCERY CUTS

Want to lower your grocery prices this summer? You’ll have to lean on the Chattanooga City Council and the Hamilton County Commission.

You may recall that Tennessee Gov. Bill Lee called for, and legislators passed, the Tennessee Works Tax Act last year, eliminating sales tax on food from August through October. It saved consumers some $400 million in taxes and was called one of the largest tax cuts in state history. Lee had previously called for, and the legislators passed, a one-month tax holiday on food in 2022.

Higher than expected revenue allowed the state to offer the breaks, the governor and legislators said. The cuts were especially helpful since the highest inflation in 40 years had driven prices to record amounts over the last three years.

However, no such food tax holiday will happen this year as Tennessee faces declining revenues as compared with previous years.

But, hey, legislators still have your backs. You can still have lower grocery prices. You just have to convince your local governing bodies to exempt the tax for the retail sale of food and food ingredients within a county, city or town or adjust it to a rate less than that taxed for other privileges, goods and services.

See how it works? The state government won’t take the hit; the local government will. And if they don’t offer it, well, blame your mayors and not your state legislators because, you know, they were just trying to help.

We bet this proposal is going over like a lead balloon in most city halls and county courthouses.

Locally, both Chattanooga Mayor Tim Kelly and Hamilton County Mayor Weston Wamp have just proposed fiscal 2025 budgets and, though neither has a tax increase, neither mayor is proclaiming that happy days are here again.

“Other cities across America are either raising taxes or making severe cuts to services as federal pandemic-era funds dwindle,” Kelly wrote on Instagram. “In contrast, we’re proposing a balanced budget for next year that funds our key priorities without raising taxes.”

Scott Martin, director of the city’s parks and outdoors department, put it this way on LinkedIn: “A tight public budget year in Chattanooga as the city successfully doubles down on core services, while not increasing tax rates in our growing and dynamic community. Adulting.”

Wamp on Monday was talking about the county absorbing an additional $4.2 million in health care costs, but he just as well could have been talking about the budget as a whole.

“This is the part of budgeting that is not exciting,” he said. “It’s not fun. It’s not good news, but it’s better than the alternative … .” If he were talking about the budget, he might have finished the statement by saying “… the alternative of raising taxes.”

The 2024 grocery bill passed the state Senate unanimously and the House 89-4. An amendment sponsored by state Sen. Bo Watson, R-Hixson, defined the local tax rate to be the city portion of the combination of county and municipality taxes. That reduced the potential tax savings if every municipality went along with the maximum tax cuts from $499 million to $10.5 million

Both Sens. Todd Gardenhire, R-Chattanooga, and Watson voted for the final bill, as did state Reps. Greg Martin, R-Hixson, Patsy Hazlewood, R-Signal Mountain, Greg Vital, R-Harrison, and Esther Helton-Hayes, R-East Ridge. State Rep. Yusuf Hakeem, D-Chattanooga, did not vote.

“It is completely their call,” House Majority Leader William Lamberth, R-Portland, said, as quoted by The Center Square, “but if [local officials] decide they can live without that tax on food in their city, if their budget can handle that, it allows them to do so.”

Awfully generous of him, we think.

Tennessee is one of 13 states with a sales tax on groceries, according to the nonpartisan Center on Budget and Policy Priorities. Then-Gov. Bill Haslam and the legislature reduced the state tax on food items from 5% to 4% in 2017, but bills are filed in the legislature each year to fully eliminate the sales tax on food.

A bill introduced by state Rep. Aftyn Behn, D-Nashville, in the recently completed session would have eliminated the tax and would have paid for it with a .75% tax on the taxable value of every business. The measure was placed behind the budget in the House Finance, Ways, and Means Subcommittee and eventually taken off notice, essentially killing it.

So Tennesseans hoping for a break in the cost of food for those summer parties and fall tailgating this year will have to wheedle their local governments for some assistance. But if Chattanooga and Hamilton County are typical of most places in the Volunteer State in a tight budget year, we would expect a lot of sympathy but little help.