March 28, 2022

Tennessee Gov. Proposes Pause on Grocery Tax

  • Flyover Country

By: Konrad Holden

In Brief: 
Republican Governor Bill Lee of Tennessee proposed a budget amendment for the next fiscal year that would pause the state’s grocery tax for 30 days. The proposal is in response to rising inflation during Biden’s 2nd year in office. The governor argued that cutting the 4% grocery tax would give “direct financial relief” to Tennesseans during the 40-year high in inflation. Other governors across the country have proposed similar measures to combat inflation and give relief to consumers burdened by price increases.

The Background: 
In mid-March, the Department of Labor released new statistics showing that February set a new 40-year record for inflation at 7.9%. This number beat January’s inflation rate, which was also a 40-year high. 

Consumers across the country are seeing rising prices in nearly every sector of the economy: fuel, groceries, and everyday necessities.

Gov. Bill Lee of Tennessee has proposed a budget amendment that would waive the grocery tax in the state for 30 days. The current state grocery tax is 4%. 

Lee released a statement explaining his budget amendment: “As Americans see their cost-of-living skyrocket amid historic inflation, suspending the grocery tax is the most effective way to provide direct relief to every Tennessean. Our state has the ability to put dollars back in the pockets of hardworking Tennesseans, and I thank members of the General Assembly for their continued partnership in maintaining our fiscally conservative approach.”

Lee is not the only governor to propose a measure like this. 

Last Wednesday, California Governor Gavin Newsom revealed an $11 billion plan to send direct payments of $400 for every registered vehicle to citizens of California to help with the rising price of fuel. California currently has the highest average gas price at $5.917. Newsom blamed the rising prices on the Russian invasion of Ukraine in late February.

Notable Quotes: 

“We’re taking immediate action to get money directly into the pockets of Californians who are facing higher gas prices as a direct result of Putin’s invasion of Ukraine.” - Gov. Gavin Newsom (D-CA)

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