Tax protesters break windows in Tennessee Capitol

A protester at Tennessee's Capitol on Thursday

NASHVILLE, Tennessee (CNN) -- Demonstrators angry over a proposed state income tax broke windows in Tennessee's Capitol on Thursday as state lawmakers struggled with a budget shortfall.

Both houses of the legislature had considered enacting a state income tax, but the proposal failed. Thursday's demonstration was sparked by reports that state lawmakers were reconsidering the measure.

Nearly 200 demonstrators, setting off air horns and chanting, "No new tax," crowded the steps of the Capitol early Thursday evening. CNN affiliate WTVF reported that demonstrators broke windows in the building and vandalized Gov. Don Sundquist's office.

"I just can't believe that our representatives would sell us out by adding more taxes to an already overtaxed community," one demonstrator told WTVF.

Tennessee is one of only nine states without a state tax on personal income, but the state faced a nine-figure budget shortfall as the end of its legislative session approached. Lawmakers had been considering a flat income tax of about 3 percent.

"The people are passionate when they say no income tax," Steve Gill, a Nashville radio talk show host who helped organize the protests, told The Associated Press.

Sundquist, a Republican, had threatened to veto a budget that was not balanced. The Senate took more than $500 million from Tennessee's share of the tobacco lawsuit settlement to pass a balanced budget, and the House approved the bill later Thursday.

The Senate added $400,000 to fund a blue-ribbon panel to review the state's tax structure, but the measure died in the House.