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Tennessee Governor Urges State Income Tax To Pay for

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$590-Million School-Reform Plan By Lonnie Harp

Gov. Ned McWherter of Tennessee last week urged lawmakers to establish a state income tax to pay for his four-year, $590-million education-reform plan.

In his State of the State Address late last month, the Governor had formally announced the substance of his school-improvement program, most of which had been made public last fall.

Last week, Mr. McWherter followed up with his funding plan, thus ending months of speculation about what tax options he might choose. Aides said Governor McWherter had sought to put together a plan that would win the broad-based support needed to overcome the state's longstanding opposition--fortified by the current recession--to an income tax.

"It is the worst possible time to introduce a package like this," said an aide to the Governor.

"We need to be conservative and responsible, but we must be bold enough to do what needs to be done," Mr. McWherter told lawmakers in his State of the State Address.

"The purpose to which I will edicate the rest of my public service is to set about rebuilding our community schools," said Mr. McWherter, who is beginning his second term after a long tenure in the legislature.

To make the 4 percent income tax more attractive to lawmakers, the Governor's finance plan would cut the sales tax, which in many areas stands at more than 8 percent, to a maximum of 6 percent. Food and residential utilities also would be exempted from the sales tax.

The funding plan was designed to increase the state's share of education funding to 70 percent, from its current 50 percent share. Officials estimated that it would boost school budgets in 55 of the state's 139 school districts by at least 50 percent.

Projections from the Governor's office also show cumulative taxes falling in 88 of Tennessee's 95 counties.

Despite the extensive groundwork by the Governor and state education officials, observers last week said that the plan faces an uphill climb in the legislature.

"The Governor took a very bold step," said Dave Goetz, executive di rector of the Tennessee Business Roundtable. "The question is wheth er there is enough trust from the vot ers and the legislature that the mon ey is going to be well spent."

"One of the reasons there has been no income tax here is the substan tial sentiment that it would be a blank check," Mr. Goetz said. ''Its success hinges on the education plan being perceived as providing the ac countability people are demanding."

The Governor's school-reform plan includes mandatory kindergar ten, reduced K-3 class sizes, changes in the high-school curriculum, school-based decisionmaking, and the elimination of 3,700 state regu lations that limit administrators' flexibility. (See Education Week, Oct. 17, 1990.)

In early hearings on the substance of the education package, questions have focused on its assessment provi sions, which call for measurements of achievement at the district, school, and classroom levels.

Concerns also have been raised about the proposal's requirement for appointment of local superintendents. About two-thirds of the state's superintendents currently are elected.

Officials last week said they ex pected the legislature to deliberate on the proposal well into the spring.

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