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Gerri Willis: National Tax Freedom day, you know that day when the average American has
worked long enough to pay his taxes for the year, and it’s still five days away for
the nation, but the low taxes in Tennessee, means the volunteer state has been celebrating
their freedom from taxes since the end of March, and today the Tennessee house voted
to repeal it’s death tax, and cut their food tax. Joining me now: Tennessee’s Republican
Governor Bill Haslam. Welcome to the show Governor great to have you here. Congratulations,
I know this is something you worked for. Do you think it will make a big difference to
TN and its economic prospects? Gov. Bill Haslam: I think it will, as you
mentioned in your intro, we are a low tax state now if you live in Tennessee you finish
paying taxes 12 days ago on average, which like I said is about 18 or 19 days ahead of
the rest of the country which is all your money for that three week period. But I do
think this will make a difference the one thing I think we have to state was the tax
that was out of whack was the state or the death tax, and it was causing people to move
or not to relocate here. So if you had an estate of a certain value, you got to an age
when you thought, “I love living in Tennessee, but it might be cheaper to die in Florida.”
So, Gerri Willis: Right, Exactly, it was said
you even had people leave, and move to retire in Florida because of that difference. You’ve
taken some heat though for not doing this sooner. Art Laffer in particular was sort
of after you and the Wall Street Journal editorial page frankly, both of them after you to get
this done sooner and here’s what Laffer said about waiting. They said “Over a decade
the cost of the estate tax was $7 billion in state and local revenue, 200,000 jobs and
14 percent economic growth.” At the end of the day you got it done, you got it in
place. Do you feel like you waited too long? Gov. Bill Haslam: We’ve been in office for
14 months and the “do away” with the tax has been in place for a long time. I think
this quickly and significantly we got it passed with pretty handsome majorities in both houses
so… The issue is this, and we love the fact that Art Laffer lives here in Tennessee, and
we hope he doesn’t die for a long time but the important thing is… we like him
Gerri Willis: Me too! Gov.Bill Haslam: …but when he does, his
heirs will be in good shape, and I think when taking a tax that is punitive to folks, and
it does chase capital away. Gerri Willis: Right
Gov. Bill Haslam: States are a great laboratory for this reason. They can show the nation
what’s done because people literally do choose and we make decisions for economic
reasons. I know a lot of people who were living in Tennessee who got to a certain age and
moved their official residents elsewhere and sometimes that meant investing their capitol
elsewhere. As we say all the time, government doesn’t create jobs, we don’t, its people
with capitol their willing to risk that capitol to create jobs, and if we’re not encouraging
them to be here, then somebody else will. Gerri Willis: We I’ve said many times on
this show. The estate tax is actually the third tax on your earnings because you invest
those, you get the earnings, you get tax on it, you invest the earnings you get taxed
on it, and then the estate tax is the final insult for people who work hard all their
lives. Now your plan phases the estate tax out over about four years as I understand
it… Gov. Bill Haslam: Right
Gerri Willis: But I also want to talk about the rest of what you’re doing down there
in Tennessee in the volunteer state because I don’t think a lot of people understand
that you have this track record that you know, I hate to say nice things to politicians,
but it’s really pretty good. You’ve gone a long way to ending collective bargaining,
there’s tort reform, and school reform. Let’s talk about collective bargaining,
now this was not big headlines across the nation; what did you do?
Gov. Bill Haslam: Well last year we actually had two significant pieces, one was tenure
reform, that basically took it from five years, well three years where everybody got it, to
five years and then you had to grade out in one of the top two categories, and then we
also… Gerri Willis: You had to earn it.
Gov. Bill Haslam: …addressed the issue Gerris Willis: You had to earn it, it wasn’t
an automatic thing. Gov. Bill Haslam: Exactly. Exaclty. Before,
basically if you stayed alive for three years you got it. The second thing is we ended collective
bargaining, and now there’s what they call collaborative conferencing, but it’s a much
different approach for teachers. We addressed tort reform last year which we think is a
major attraction for business… Gerri Willis:Well let me stop you here for
just a second because I want to ask you about the collective bargaining with teachers in
more detail, because here in New York state what we’ve seen is that the teachers union
have such power that it’s very difficult for people to fight back, I just interviewed
a woman who lost her job because she spoke out against the unions.
Gov. Bill Haslam: Right Gerri Willis: Is the culture in Tennessee
different with the Tennessee teachers unions? Gov. Bill Haslam: Yeah I think that is really
safe to say I mean the culture with unions in general would be much different in Tennessee
than they are in New York, and we think that’s a real competitive advantage for us, but you
know this year the other significant thing we did with government employees it literally
just passed today, about three hours ago, is address the civil service laws around government
hiring, you know, in government there’s two kinds of taxes, there’s the one you
charge folks, and then there is the unseen tax of having a government that doesn’t
operate as efficiently as it should. Every one of our 22 commissioners said “the way
you can government more efficient is to address a way that we hire, and we decide who we’re
going to lay off in those cases, and it has to be on merit, not just seniority, and we
were able to get that passed just this morning. Gerri Willis: You know, the fact that this
is revelatory is amazing to me but you also did some tort reform down there. You want
to talk about that too? Gov. Bill Haslam: Well you know what we did,
again, I think that you have to look around and say is “what are your competitor or
peer states have in place?” We looked at everything from caps on damages to some other
things and we realized we weren’t as competitive interestingly once, and there was a lot of
push back from trial attorneys saying: “you’re going to; this is taking away an element of
fairness.” We think that element of protection is still there, but we’re now a much more
attractive place to do business, and we’ve seen that. Some corporations that have literally
this past year decided to come here and we ask why they say when you changed the law
of tort reform it was a big influence for us.
Gerri Willis: Well you know Mitch Daniels has been a mentor for you the governor of
Indiana, it’s kind of obvious, you know it occurs to me, I have to let you go, but
you know maybe the GSA is looking for a new manager to fix some of the problems with the
staging there, maybe you’re the guy to do it. Governor, thanks for coming on. It was
an absolute pleasure talking to you, and congratulations on being tax-free.
Gov. Bill HaslamThanks so much .