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Press Release


Citizen Group Asks Bredesen: Reconsider Decision to Deny Tennesseans Fuel Tax Relief

For Immediate Release September 12, 2005

(Alexandria, VA) -- Suspending the gasoline tax to give Tennesseans a respite from high fuel prices is not just a knee-jerk idea: that's the message the 400,000-member National Taxpayers Union (NTU) stressed to Governor Phil Bredesen in urging him to reverse his position from last week and work for relief. The non-partisan citizen group, which has 6,100 members in Tennessee, has sent Bredesen an open letter asking him to "cushion the blow" of Katrina-related fuel supply disruptions and ongoing gas price spikes by lowering taxes on motorists.

"NTU encourages you to permanently lower state gas tax rates or provide temporary relief through a 'gas tax holiday,'" NTU Government Affairs Manager Kristina Rasmussen wrote to Bredesen. "It is our belief that such a move would be the best solution available for assisting consumers in your state in this time of crisis."

Rasmussen noted that just over a week ago neighboring Georgia's Sonny Perdue became the latest Governor to temporarily suspend by Executive Order the state's per-gallon and sales taxes on gasoline (following those in Illinois and Indiana who did so in 2000). Bredesen dismissed such a proposal from Republican lawmakers last week, calling it a "reflex that the answer to anything is to cut taxes" -- and praising instead the President's action to release federal oil reserves. However, Rasmussen contended that there are many additional reasons why the Governor should take a second look at fuel tax relief:

  • One of Governor Bredesen's most prominent Democratic Tennessee colleagues, Congressman Harold Ford, has backed legislation to suspend the federal gas tax. "These plans are not partisan 'reflexes,' they are honest attempts to deliver some modest help at a time when Tennesseans could sure use it," Rasmussen observed.
  • Although Tennessee's gasoline excise tax ranks near the middle nationally, the combined state-federal burden (not including local option taxes) approaches 40 cents per gallon -- constituting nearly $6 in the price of a typical fill-up. Suspending Tennessee's portion of this burden would therefore still mean noticeable savings for most consumers.
  • Tennessee's steadily-accumulating budget reserves of $260 million indicate that the government is capable of absorbing revenue "losses" from tax reductions without dramatically affecting the state's fiscal balance.

"Surely the state can afford to give back to overburdened motorists by suspending the gas tax," Rasmussen stated in her letter to the Governor. "Your active leadership would ensure that beleaguered Tennessee motorists can better cope with this trying time."

NTU is a non-profit organization working for lower taxes, smaller government, and greater economic freedom at all levels. Note: Rasmussen's letter to Bredesen, along with numerous studies and commentaries on transportation policy, may be accessed at www.ntu.org.

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