Wednesday, December 30, 2009
- by Rep. Eric Watson
The second session of the 106th General Assembly will start differently than most years, as lawmakers will be heading into a Special Session on January 12th to address education issues. The governor called the Special Session after it was determined Tennessee has a shot at Race to the Top dollars, a federal grant program set up through the Recovery Act. The federal government has set aside approximately $4 billion for the Race to the Top program, and states have a shot at the money provided they can come up with innovative ways to improve education in their state prior to a deadline of January 19. Because of the special session, the Governor is slated to present the budget to the General Assembly on February 1st, 2010.
After the special session has concluded, myself and other lawmakers plan to focus on balancing the budget, adequately funding education, and streamlining state government functions. With analysts predicting at least a $1 billion budget shortfall, lawmakers face difficult decisions in the months ahead.
The state is facing an unprecedented projected revenue deficit of roughly $1 billion. Because the Tennessee General Assembly is constitutionally mandated to pass a balanced budget, lawmakers will face extraordinary challenges. In October, Tennessee fiscal analysts said $1.1 billion in baseline budget reductions will likely need to be made in order to keep the state finances afloat.
The 2009-10 budget, passed in June of 2009, anticipated revenue growth of approximately one percent, but revenues have been falling short of that mark. In October, the last month of available data, revenue declined once again. For a record 17 straight months, Tennessee has seen negative revenue growth.
Budget facts and figures
· The current budget, as passed, also requires the Administration to identify additional reductions of over $290 million in next year's budget in order to balance the budget on a recurring basis by fiscal year 2011-12.
· The General Assembly reduced growth by $750 million (12 percent) last year, but approximately $526 million was added back - from federal stimulus funds as one-time funding - minimizing the first year appropriation reduction to only $227 million.
· The General Assembly will now have to look at reducing growth without the assistance from the stimulus funds. In other words, the 2009-10 budget anticipated $753 million in planned recurring reductions. The net reductions were $227 million. The budget the General Assembly will receive in the 2010 session will be at least $526 million less.
· When disbursements of federal funds are complete, Tennessee will get around $5 billion in stimulus funds from the American Recovery and Reinvestment Act (ARRA). The money is used for programs from highways and bridges to food stamps and home weatherization.
· Tennessee is set to receive roughly $5 billion in stimulus funding over several years. This year, the state will have approximately $658 million in ARRA funds, and $252 million is estimated to come from TennCare match funds. Higher education will receive $165 of the $658 million infusion of money.
The Bredesen Administration has reportedly met with the various state departments and is asking for 6 percent to 9 percent more in reductions on top of the $753 million. In addition, the Governor is asking for $120.3 million in over appropriations, estimated at about $70 million.
Some who are concerned about the difficulty that comes from such substantial cuts have said an alternative to raising the sales tax rate or adding an income tax would to study how sales taxes are applied and areas where exemptions might be repealed-from medical services to gasoline.
The State Funding Board is expected to make a preliminary revenue estimate in December, giving lawmakers a better snapshot of the budget hole it is facing. The Board will likely revise the estimate in late March or early April, as opposed to its practice of meeting in May, hopefully allowing the General Assembly to finish earlier in the year.
State faces other financial challenges
The Unemployment Trust Fund will once again be a significant issue early in the 2010 legislative session. Despite a $140 million infusion of federal stimulus funds into the system in 2009, the fund continues toward insolvency. Analysts are predicting the fund could be very close to deficit status by the end of the year. The most concerning time to be in the red will be between mid-January and mid-February. If the state incurs a deficit, it will likely require a bridge loan from the federal government until the legislature can make other provisions in the Unemployment Trust Fund.
The Lottery Scholarship Fund will be another area for the legislature to examine. Nearly $10 million in reserves was needed to close the 2008-2009 fiscal year, and adjustments to the lottery-funded Pre-Kindergarten program brought program expenditures in line with revenue estimates for the 2009-2010 fiscal year. Lawmakers will need to keep a close eye on the fund in order to fulfill its commitment to lottery scholarship recipients.
The General Assembly passed innovative legislation in 2009 designed to grow jobs through a program which provides capital to small, medium, and start-up businesses here in Tennessee. The bill created the TNInvestco program for businesses that oftentimes do not enjoy the same economic development incentives that have been provided to larger companies that invest capital in the state.
The legislation authorized tax incentives for private investors to create a pool of capital totaling $120 million that was divided among professional investment firms. The six Tennessee-based firms then invest the money in small businesses located and headquartered in Tennessee. The legislation stipulated that the money must remain invested in Tennessee for a minimum of ten years. Capital returned to the state must first go to the General Fund. Once enough money has been repaid, the remaining funds will be deposited in the Rural Opportunity Fund. Throughout the ten years the money is invested and even beyond, the state will reap the benefits of job growth from these small businesses.
Lawmakers are looking to expand the program this year, building on its success. Each of the six TNInvestco funds chosen are receiving an allocation of $20 million in gross premium tax credits. The goals of TNInvestco as outlined by state officials are to develop Tennessee's entrepreneurial infrastructure, to bring additional jobs to the state, and to diversify the state's economy. According to the most recent data, the vast majority of jobs in the state are created by small businesses with 500 or less employees.
Despite budget challenges, education will still be at the forefront of the debate in the 2010 legislative session. Because Tennessee currently ranks 41st in student achievement, it is imperative to move forward with key education initiatives, in addition to funding K-12 education.
I will continue to move forward with my Education First proposal, which would literally make education spending a top priority by requiring the General Assembly to pass an education budget independent and prior to the rest of the state's expenditures. The bill will prioritize education spending and eliminate any last minute compromises that often accompany the massive appropriations bill, which is generally one of the last acted upon pieces of legislation before adjourning.
I feel that this "first funding" requirement will prevent the education budget from becoming a political football during legislative sessions and prevent its use as a late-session hostage in budget negotiations. Also, by funding education first, the schools will have the budget in time to allow them to hire teachers and prepare their own budgets earlier, a common problem that is cited with passing the state budget at the 11th hour.
Nevada voters overwhelmingly approved a constitutional amendment that enacted an Education First plan in 2006, after the Nevada legislature approved the ballot initiative with little fanfare. The first time the legislature utilized the plan was in 2007, and it was reported the transition went smoothly.
Tennessee currently ranks 41st in student achievement. Only 63 of every 100 Tennessee ninth graders will graduate from high school, and only 17 will complete their college education within six years after graduating. Lawmakers believe that Tennessee can do better, and agree that education initiatives should be a top priority for the Tennessee General Assembly.
In 2009, former Tennessee United States Senator Bill First started the Tennessee State Collaborative on Reforming Education (SCORE), an initiative aimed at jumpstarting long-term educational change in Tennessee to improve the state's educational system. In October, the organization released a report entitled "A Roadmap to Success: A Plan to Make Tennessee Schools #1 in the Southeast within Five Years." The report offers 63 measurable steps to reform education in the state.
The SCORE recommendations do not require increased funds; instead utilizing resources the state already has and by tapping into private funding, like the Gates Foundation, to implement innovative new strategies in the classroom.
The SCORE report recommendations are based on four key strategies:
Embrace high standards
Cultivate strong school leaders
Ensure excellent teachers
Utilize data to enhance student learning
The report says Tennesseans must embrace the state's more rigorous assessments and higher academic standards. Teachers must be given the support they need to elevate classroom instruction to meet those expectations, including the creations of professional learning communities where teachers can learn best practices. SCORE also recommends Tennessee rethinks teacher compensation systems with a plan to reward excellence. Several lawmakers intend on filing legislation that is based on the suggestions made by SCORE.
The Healthcare Choice Act will be introduced this year in an effort to lower health insurance costs and provide choice to all Tennesseans. The legislation would allow Tennesseans to purchase health insurance plans from companies in other states, a practice that is currently prohibited.
Americans want and deserve a health care reform alternative to the government-run health care that is being discussed in Washington. Supporters say reform is better handled at the state level than by the federal government, and the legislation will lower heath insurance costs and provide more choices to Tennesseans. The Health Care Choice Act will expand the number of health care plans available for purchase from 127 in Tennessee to potentially more than 5,000 plans nationwide.
At least five other states have introduced similar legislation, including New Jersey, Colorado, West Virginia, Pennsylvania, and Washington. A bill introduced on the federal level aims to allow states to enter into an interstate compact to sell health insurance over state lines. The Washington Post recently reported that Tennessee's own U.S. Senator Bob Corker is pursuing legislation on the federal level to allow a new insurance exchange, allowing companies to compete across state lines nationwide.
Over the summer and fall, lawmakers have held numerous special committee meetings devoted to examining the use of traffic cameras in communities across the state. Cities and counties in Tennessee and across the country have increasingly turned to the automated systems for surveillance of intersections and roadways.
Many lawmakers have questioned the conflicting research that the traffic cameras reduce accidents. The special study committees that met over the summer and fall say lawmakers bring both supporters and opponents of the cameras in for discussion and testimony.
Various law enforcement officials attended the special study committee meetings to testify in favor of the traffic cameras. Law enforcement officials testified that the cameras provide many benefits to the community, primarily making areas safer for drivers. Officials contend the cameras reduce fatalities, improve traffic flow and intersection blockage, and make driver behavior safer.
In addition, law enforcement officials say that the cameras allow them to respond to community calls for increased enforcement in problem areas. They testified that the cameras free up police officers from traffic duty, and allow them to attend to other crimes taking place within the community.
Despite the testimony from law enforcement officials, lawmakers said they receive regular complaints from constituents regarding the use of traffic cameras. Lawmakers echoed criticisms from constituents that in addition to a violation of rights, the motivation behind the cameras is money, not safety.
Several pieces of legislation have been filed in response to constituent concerns, and will be considered in 2010. In addition to filing legislation to do away with the cameras, lawmakers have been exploring other possibilities to lessen their impact. Most notably, legislators have discussed forcing communities to display clearer signage, re-directing the money raised from citations to road or education funds, and mandating that only companies headquartered in Tennessee be allowed to operate or process cameras or citations.
Issues to be considered in 2010
Juvenile Sex Offender Registry - Lawmakers will push for passage of legislation to place violent juvenile offenders between the ages of 14 and 18 years of age on Tennessee's Sex Offender Registry as required under the federal Adam Walsh Act. The adoption of this legislation would put Tennessee into compliance with the requirements under the Adam Walsh Act which was supposed to go into effect in 2009. Tennessee was awarded over $50 million in Byrne Grant funding last year, 10 percent of which could be in jeopardy unless the state adheres to these requirements. However, in June U.S. Attorney General Anthony Holder signed a one year agreement to extend the deadline for states to comply with the Sex Offender Registration and Notification Act. Only Ohio has complied with the law thus far.
Mandate Resolution - In the same vein, lawmakers will offer a resolution asking the federal government to refrain from passing down mandates, unfunded or otherwise, to the state. Recent reports that the healthcare reform bill, currently before the U.S. Senate, has fueled concern that the bill could cost Tennessee taxpayers up to $1.4 billion in unfunded mandates.
Secret Ballot Protection Act - An initiative will be offered that seeks to preserve the right of voting by secret ballot when it comes to deciding whether or not to elect an exclusive bargaining representative, or forming a union. The Secret Ballot Protection Act, which was offered last year but did not move forward, is a counter measure to "card check" legislation, which would make employees' votes on such matters public. Proponents of the Secret Ballot Protection Act say the card check legislation would subject employees to intimidation and other harassment in the workplace.
Proof of Citizenship to Vote - Legislation will be reconsidered this year to require proof of citizenship before registering to vote. The legislation, which I have offered for several years now to protect law-abiding citizens from voter fraud, died last year in the Elections Subcommittee by a 3 to 3 vote.
Photo ID to Vote - Expect legislation to require photo identification at the polls before voting to once again come before the General Assembly. The legislation seeks to make sure that those voting are both legal residents and are indeed the person registered to vote to avoid fraud and abuse. The legislation also died in 2009 in the Elections Subcommittee by a 3 to 3 vote. I will once again move forward with both pieces of legislation.
Restaurant Menus - The General Assembly in 2009 to prohibit non-elected local government entities or boards from imposing requirements on restaurants to provide nutritional information on menus. After the General Assembly adjourned, however, the Governor quietly vetoed the bill. The bill was filed after constituents voiced concern that some communities could impose different standards and significantly increase costs to small restaurant owners by requiring nutritional information to be placed on every menu. In March, Davidson County's Metro Board of Health voted to enact the guidelines on providing nutritional information to customers for certain restaurants, even though Congress is considering the federal LEAN Act, which would implement a national standard to print the information on menus. Adopting a county-by-county approach to the disclosure of nutritional information increases costs to restaurants, many of whom are small business owners. The issue may be revisited in 2010.
Closing the gun carry permit database - A bill which aims to protect the confidential information of handgun carry permit holders is also likely to be considered once again the General Assembly. The proposal would protect the confidential information by removing the handgun permit holders' database from provisions of the state's open records law. Many citizens were concerned about the information being made public last year after several newspapers published easily searchable databases online with personal information. Permit holders fear criminals will use the information to target their homes to steal weapons, while those who do not own guns are worried about the risk of being identified as a home without a firearm.
Streamlining government processes - Several members will seek passage of proposals to streamline the legislative process. Lawmakers are looking to make the part-time legislation more effective and efficient in order to save even more taxpayer dollars in a year when cuts will need to be made across the board. The proposals range from bill and resolution limits to changing the way committees function.
Worker's Compensation - The General Assembly may bring up for consideration an implementation delay for worker's compensation legislation that was passed in 2008. The legislation takes effect in January 2010, and the legislature will immediately begin to consider moving the implementation date for Public Chapter 1041 to 2011. In these difficult economic times, legislators are concerned it could mean increased fees for contractors at a time when the construction industry is already facing hardship, but they wish to examine the issue further.
DUI Interlock - Lawmakers plan to once again propose legislation aimed at lowering the number of DUIs in the state of Tennessee. Motor vehicle crashes are the leading cause of death among persons between the ages of 3 and 33, with 50 percent of the victims being in alcohol-related crashes. In order to toughen penalties for DUI repeat offenders, DUI Ignition Interlock legislation will be proposed. Interlock devices are small pieces of equipment attached to the steering wheel of a car with a tube that the driver must breathe into in order to allow ignition to start.
Tennessee currently has only five of the eleven elements proposed by the National Transportation Safety Board (NTSB) who have designed model legislation for comprehensive approach to lowering the incidence of DUI in states, meaning that Tennessee misses out on federal funds to improve roadways. The NTSB has urged passage of a more uniform and mandatory system for installation of interlock devices to immobilize the vehicle of a drunk driver upon detection of alcohol in their body.
Wine in Grocery Stores - Allowing the sale of wine in grocery stores will likely be presented again, as a joint study committee has been examining the issue over the summer and fall. The complex issue involves not only the state's ability to regulate liquor stores, but also wholesalers, grocery, and convenience stores. Thirty-three states, and the District of Columbia, allow wine in retail stores.
Until next time, God bless,
Rep. Eric Watson