WTVF: Rep. Jason Mumpower Defends His Tennessee Titty-Bar Tax Break

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NewsChannel 5 Investigates: TN Family Tax Break Benefits NY 'Strip King'
http://www.newschannel5.com/global/story.asp?s=9956397



It's a Tennessee tax break meant for families.

So how did a so-called strip club "king" from New York end up taking advantage of the legal loophole?

Right now, Tennessee state government needs all the money it can get.

But some very wealthy people are getting very big tax breaks -- and our NewsChannel 5 investigation discovered they're not all Tennesseans.

"Family-owned businesses are part of what has made this state and this nation great," said the House Republican leader, Rep. Jason Mumpower of Bristol.



Rep. Jason Mumpower, R- Bristol
District 3 — Johnson and part of Sullivan Counties

For some, Norman Rockwell's family images capture a life worth defending -- in this case, defending from state business taxes.

"We passed this recognition of family-owned businesses a number of years ago to help it promote exactly what it has promoted," Mumpower added.

But if that is what lawmakers thought they were promoting when they approved a tax break nine years ago for "Family-Owned Non-Corporate Entities" -- FONCE, for short -- they also created a haven where a New York "strip king" could re-invest millions of dollars.

Tax free.

"Is that your idea of a family-owned business?" NewsChannel 5 chief investigative reporter Phil Williams asked Mumpower.

"That wouldn't be, no," the Republican leader answered.

Still, after New York's strip clubs made him a wealthy man, Sam Zherka looked South to invest that money.

Our investigation discovered that, two years ago, Zherka began buying up apartment complexes in Hendersonville, Goodlettsville and Clarksville. Property records show 12 properties valued at more than $55 million.
 
Zherka, who has also become a newspaper publisher, appears in an anti-tax ad now running in his home county.

And his former attorney, John Stone, says the deals here were structured through various entities designed to help him legally avoid Tennessee taxes.

"It tells me that we've created a tax haven here in the state of Tennessee," said state Revenue Commissioner Reagan Farr.

Farr couldn't discuss Zherka's taxes, but he says the FONCE law allows out-of-state investors from 43 other states to escape paying Tennessee taxes on more than -- get this -- $1 billion in commercial property.

"We are providing all the services that make their property valuable," the revenue commissioner added.

"All of the Tennesseans who are here, buying their goods, paying their sales tax, businesses paying their franchise and excise tax, we are all subsidizing these wealthy out-of-state investors."

(...)

But Mumpower disagreed. "In this economy, the last thing that we need to be doing is raising taxes at any level."
 
Does that mean continuing to give Tennessee tax breaks to folks who are not even Tennesseans?

"Let's find a way to take care of those people who are coming in from out of state and taking advantage of us," Mumpower said. "Let's not hurt everybody because of one or two bad apples."

(more at source)

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1. hmmm...also applies here

Rep. Jason Mumpower and the Tennessee FONCE Titty Bar Tax Breaks...

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2. Lt. Governor Ron Ramsey wants out of the bright headlights of the FONCE Titty Bar Tax Break

Ramsey Ready to Surrender on the FONCE Loophole
http://blogs.nashvillescene.com/pitw/2009/03/ramsey_ready_to_surrender_on_t.php

By Jeff Woods in Legislature, Woods
Thursday, Mar. 26 2009 @ 1:52PM

Politicians are making sense to me today. How strange. First, Sen. Lamar Alexander comes out against devastating the environment. Now, Lt. Gov. Ron Ramsey says he might see his way clear to vote to stop rich people from dodging taxes.



Tennessee Lt. Governor Ron Ramsey, R-Blountville

Ramsey told reporters today it's possible he can stomach closing the loophole that's turned Tennessee into a tax haven for real-estate tycoons. It's just a guess, but we're thinking Ramsey's new willingness to compromise might have something to do with that New York titty bar owner who was discovered enjoying Tennessee's benevolence.



Both Lt. Governor Ron Ramsey and Rep. Jason Mumpower have both kept their eyes on the Tennessee FONCE tax break for a long, long, long time now...

Ramsey says he'll vote to close the loophole for family-owned non-corporate entities if he can agree with the governor on a level of investment to exempt from business taxes. Only 247 of the 3,235 businesses taking advantage of the loophole own properties with appraised values of less than $100,000, the administration says. Bredesen says he'd exempt the 712 businesses worth less than $250,000.

(...more at hyperlink above)

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3. Please Ron...don't use the federal stimulus money to weatherize Tennessee titty bars...

State budget includes plenty to argue about
Delayed proposal to be presented tonight
http://www.knoxnews.com/news/2009/mar/23/state-budget-includes-plenty-to-argue-about/?printer=1/

By Tom Humphrey
Monday, March 23, 2009

NASHVILLE - Money will be thrown into the mix of things for legislators to argue about tonight as Gov. Phil Bredesen presents a proposed state budget that has built-in controversies, both old and new.

The budget presentation for the next fiscal year, which begins July 1, comes more than a month later than usual and with state tax collections running more than $1 billion below projections used in adopting the current year's budget.

Bredesen asked for a delay in laying out the spending plan, normally submitted in February, to figure out the impact of federal stimulus funding.

The total to be received by Tennessee over a two-year period has reached "about $5 billion, best we can tell," Bredesen said last week. The figure used a few days earlier was $4.5 billion.

The inflow of federal funding, while easing or eliminating the need for sudden and dramatic cuts in multiple state government programs, also has created new areas of controversy and concern.

Lt. Gov. Ron Ramsey says there is a danger of the state spending federal money on programs now, then hitting "a brick wall" in two years when the money runs out, requiring either a tax increase or unpopular cutting.

He cited $800 million in federal stimulus money for food stamps, allowing the state to either provide help to more people or boost the amount given those already eligible.



Lt. Governor Ron Ramsey, Tennessee EBT "food stamp" foe

"If you do that, what do you do two years from now when the money runs out? I know how politically hard it is to take something away once it's been voted in," he told reporters Thursday.

Ramsey said Bredesen and Deputy Governor John Morgan contacted him the next day to "assure me that it (food stamp funding) would automatically go back to where we are now" when the federal money ran out.

"That made me feel a little better," he said, but added that other stimulus programs also raise concern - for example, the possibility of "fraud or abuse" in spending an extra $100 million in a home weatherization program.

Lt. Gov. Ron Ramsey worries about being too generous with poor people
http://www.nashvillescene.com/2009-03-26/news/lt-gov-ron-ramsey-worries-about-being-too-generous-with-poor-people/

By Jeff Woods
Published on March 25, 2009 at 8:11am

The economy's cratering and families all across Tennessee are struggling to feed their children. But help is on the way.

As part of the stimulus package, the feds are sending Tennessee $800 million for food stamps for the next two years. Good news, right? Not according to Lt. Gov. Ron Ramsey.

He's fretting the money will make our food stamp program too generous and wondering how we ever will spend all that cash without unreasonably raising the expectations of poor people for full stomachs.

Ramsey's comments to reporters last week drew an immediate rebuke from House Democratic caucus chair Mike Turner.



Rep. Mike Turner, D-Old Hickory
District 51 — Part of Davidson County

"Let them eat cake. That's what he thinks," Turner said. "Our first priority in hard times like these is to make sure that people can eat. There are a lot of poor people in Ron Ramsey's district <Tennessee Senate District 2, which encompasses Johnson and Sullivan counties>, and he needs to be looking out for the poor people in his district."

Tennessee has one of the nation's stingiest food stamp programs, contributing roughly $100 to a family's monthly food budget. At last report, one in six Tennesseans were receiving the benefit, and that number was going up fast. To be eligible, a family of four can't earn more than $27,560.

You'd think our elected leaders would be anxious to provide as much help for these families as possible. But for Ramsey, the issue is what happens once that money disappears in a couple of years. He worries that too many families will become dependent on the extra help and demand that the state keep giving it.

Mike, Mike,Mike...what in the world are you talking about "poor people" in Ramsey's district? Come on now, Mike...the Gregorys aren't poor!

Hunger strikes: Economy, fear of future force more East Tennesseans to seek sustenance at food banks
http://www.knoxnews.com/news/2008/nov/01/hunger-strikes-economy-fear-future-force-more-east/
By Amy McRary (Contact)
Saturday, November 1, 2008