NASHVILLE (AP) - According to projections by Gov. Bill Haslam's administration, increasing Tennessee's estate tax exemption by $500,000 would cost the state about $23 million in lost revenues

The inheritance tax currently applies to estates worth more than $1 million, and was paid in 845 instances in the last budget year.

Haslam has said he agrees with fellow Republicans in the Legislature who want to reduce the estate tax because it "chases capital away" by discouraging retirees from living in Tennessee.

But the governor warns that the state's finances aren't strong enough to afford reductions in either the estate tax or the Hall tax on interest and dividends.

Republicans in the Legislature are nevertheless pressing to reduce one or both of the taxes as they gear up for their re-election campaigns.