A Preview of the 2010 Legislative Session

A Preview of the 2010 Legislative Session

Budget and jobs headline 2010 legislative agenda /

Special Session on Education is set to enable Tennessee to draw down federal funds for states with significant reforms  

     (NASHVILLE, TN), January 2010 –  The state budget tops the list of issues that will be debated as lawmakers return to Nashville to begin the second half of the 106th General Assembly.  Although the budget deficit will be the predominant driver for legislative action this year, other issues expected to be on lawmaker’s agenda in 2010 are unemployment and job creation, worker’s compensation, and preparing for Congressional action on health care that could negatively impact the state’s finances in the future.

     However, before the General Assembly begins the work of the regular 2010 legislative session, legislators are meeting in a Special Session on Education to consider legislative changes required to draw down federal “Race to the Top” dollars available to states. The governor called the Special Session after recognizing that Tennessee has an opportunity to receive these funds if the General Assembly acts promptly with certain education reforms.  Race to the Top is authorized under the American Recovery and Reinvestment Act of 2009 (ARRA) and is a competitive grant program to encourage and reward states who are implementing significant reforms in the four education areas: enhancing standards and assessments; improving the collection and use of data; increasing teacher effectiveness and achieving equity in teacher distribution; and turning around struggling schools.  

     The state must adopt legislation to conform to the Race to the Top requirements by January 19, 2010, to qualify for priority status for receiving the funds.  Priority is given to states that have already adopted an innovative and cohesive plan to improve education.  Such action could enable Tennessee to receive as much as $400 million of the $ 4.3 billion in federal funds set aside for states that meet reform guidelines. If Tennessee is successful, the funds would be split with half used for statewide efforts, and with the other half going to local education agencies if they agree to participate.


     The General Assembly is expected to consider the K-12 reform proposals first, followed by proposed changes to higher education in Tennessee.
     K-12 Education — Some of the legislative topics expected to be debated regarding compliance with Race to the Top requirements include:

    * Requiring the use of teacher effect data in teacher and principal evaluations
    * Requiring tenure decisions to be based in part on teacher evaluations
    * Requiring annual teacher evaluations
    * Establishing a statewide recovery district for failing schools and school systems

     Expect legislation to focus on changing the way Tennessee evaluates teachers. The state already has one of the best evaluation databases in the nation to measures student’s achievements from year to year. Lawmakers will discuss tying this data to teacher evaluation, tenure, and performance pay. The SCORE (State Collaborative on Reforming Education) report, which stemmed from an initiative headed by former U.S. Senator Bill Frist, will serve as a compass in guiding legislators in their reform efforts.  The SCORE report recommended directly linking tenure decisions to teacher effectiveness.  It also recommended allowing student achievement gains to be included as one component of the teacher effectiveness measure before a final tenure decision is reached.  
     On the issue of providing help for failing schools, expect the legislative focus to be on early intervention.  If a school is low-performing, the state would be ready to take action sooner.  Several years ago, the legislature changed accountability measures to put Tennessee more in sync with No Child Left Behind standards. Proposals could also include new parameters by which schools will be classified as “failing,” and affix new accountability standards to the plan.

     Another area that could be addressed is the effectiveness of any statewide efforts to enhance Science, Technology, Engineering, and Math.  Tennessee students must be proficient in these subject areas to compete in a changing global economy.   

     On improving high school graduation rates, the legislature will consider proposals to place more emphasis on preparing students for college. This includes preparing students for community college and technical schools, in addition to the state’s four-year higher education institutions.  Some lawmakers favor greater utilization of the state’s two-year colleges as a preferred point of entry for incoming freshman.  Similarly, the General Assembly will likely consider making it easier to transfer credits between institutions to make post-secondary work flexible enough to meet the needs of more graduating seniors.   

     Higher Education — On higher education, the General Assembly will look at a proposal to tie some funding to performance, which would be measured by the number of students who complete their degree program. Among other higher education issues proposed are changing the credit transferring process to establish a statewide transfer agreement between all two- and four year colleges and universities; eliminating remedial education in four-year institutions, and allowing students to dual-enroll in two and four-year institutions. The goal is to direct more students to post-secondary work that fits their academic and workplace needs. The plan would include streamlining and simplifying the process for students to  transfer, enroll, or dual-enroll.

     Worker’s Compensation —  The governor also broadened the call for the General Assembly to immediately suspend a new law in the Special Session which requires certain construction subcontractors and independent contractors to carry workers’ compensation insurance on themselves due to unintended consequences.  That law, Public Chapter 1041, took effect on December 31.

     A Joint Workers Compensation Committee heard testimony on the unintended effects of the new law in Nashville last October.  Those most impacted by the legislation are independent contractors and sole proprietors.   

     Recommendations for alternatives have been collected from consumers and affected industries and are being examined.   

     Budget — The state is facing a budget gap that could go over $1 billion, making the 2010-11 budget the most challenging in recent history.  Unlike Congress, the Tennessee General Assembly is constitutionally bound to balance the budget.   Revenues have fallen short of the weak one percent growth projection assumed for the current budget year which started in July.  The weakening economic condition means lawmakers must be vigilant to make sure that taxpayer dollars are spent in the most efficient and effective manner.   

     As of December, the state was in its 18th consecutive month of revenue declines in an unprecedented economic downturn.  Although the state is in its deepest “fiscal downturn” in modern history, some of the cuts’ potentially harmful effects, possible layoffs and reductions, have been greatly abated so far by some of the $5 billion in federal stimulus money for Tennessee, concealing what’s been going on in terms of revenues.  The General Assembly made $753 million in cuts (12 percent) last year, but approximately $526 million was added back with one-time funding, minimizing the first year appropriation reduction to only $227 million.  Now the state must look at making these cuts without money to backfill.   

     The administration asked Tennessee’s various state departments for 6% to 9% more in reductions on top of the $753 million already identified in the current budget year.  Hearings were conducted in late November regarding the reduction plans submitted to the governor from state agencies.  The various departments presented grim pictures under their spending reduction plans, including the Department of Mental Health which placed on the table what they termed “draconian” cuts in core services like alcohol and drug treatment, the behavioral health safety net and community mental health support services.  In TennCare, departmental officials said everyone on the program except pregnant women and children will be affected by the plan they offered.  The officials said they might also have to impose a $10,000 annual cap on hospital coverage, an action that must have approval from the federal government.   

     Other departments and agencies of state government echoed similar lists of painful cuts for consideration to help balance the budget.  

     Economists predict the state’s tax base won’t return to 2008 levels until at least 2014.


        Unemployment — One of the most significant factors attributing to the state’s budget gap is the high unemployment rate.  Job losses are at 10.3 percent statewide, as of December, a level not seen since the early 1980s.     

   The prolonged unemployment rate has greatly stressed the state’s Unemployment Compensation Fund.  The fund is expected to be very close to broke by the end of 2009 and could possibly dip into the red in the first quarter of 2010.   Expect the solvency of the fund to be a topic for discussion again this session, as the governor has already indicated that the administration may bring a proposal to broaden the wage base during the upcoming legislative session.  

     Bredesen won approval of legislation last session to broaden the taxable wage base to $9,000 from $7,000 and adopted a 0.6 percent premium charge.   Although the state can borrow money to keep the fund solvent without interest until December 2010, any additional funds would require interest from the federal government that could cost businesses more in the long run according to the administration.  Federal control of the state’s fund would mean Washington could dictate future tax rates and wage base thresholds.  Twenty-four states have already borrowed money from the federal government to keep their unemployment funds solvent.   

     The nation has lost 8 million jobs during this recession, which is more than the last four recessions combined.  Tennessee has shared evenly in this loss with a 5 percent decline.  However, Tennessee had the 17th largest private sector loss.  The stimulus package passed into law by Congress has not made any notable improvements in private sector job recovery in the state.   

   Rural Tennessee communities have been hardest hit by the recession, due to the loss of non-durable manufacturing plants located in these communities.  The cities have a more diverse workforce, many of which are service-oriented, a sector of the job market that has not taken as hard a hit as manufacturing and other jobs found in rural areas.  Every industry in Tennessee is in decline, except health care and education.  The hardest hit industries are construction, which has suffered at a 20 percent loss and non-durable manufacturing, at a 10 percent decline.   

   One of Tennessee’s key state economic advisors, Dr. William Fox of the University of Tennessee, does not predict state revenues will start growing again until employment begins to move in the right direction.   

     Congressional Action — As Tennessee struggles to make ends meet in our state budget, the state is also bracing for the health care proposal currently pending in Congress.  The proposal could cost the state anywhere from over $800 million to $1.4 billion from 2014 to 2019, depending on which version is passed.  The decision from Washington could have dire effects on the state’s budget and the ability of Tennessee to control its own health care program.

     In the wake of Senator Ben Nelson’s “cornhusker kickback,” Lt. Governor Ron Ramsey has already asked Tennessee’s Attorney General to offer preliminary legal options to the Tennessee General Assembly as to how we may best protect our citizens from this unfair and quite possibly unconstitutional federal action.  Senate Majority Leader Harry Reid has publicly acknowledged the critical sixtieth vote in favor of passage was cast by Nebraska Senator Ben Nelson in exchange for inclusion of a provision within the health care legislation to hold the State of Nebraska harmless from increased costs arising from the proposed Medicaid expansion. Taxpayers in all other states will be required to annually pay millions of dollars to offset increased Medicaid costs, without any rational basis for favoring Nebraska taxpayers over taxpayers in Tennessee or any other state.

     Expect legislation to be introduced this session called the “Health Care Choice Act” to allow Tennessee to join a reciprocal compact with other states so that citizens can purchase health insurance plans from companies in other states, a practice that is currently prohibited.  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 5 other states have introduced similar legislation, including New Jersey, Colorado, West Virginia, Pennsylvania, and Washington. A bill introduced on the federal level also aims to allow states to enter into an interstate compact to sell health insurance over state lines.  

     There may also be a proposal to limit, alter or oppose selected state or federal actions, including single payer provisions and mandates that would require purchase of insurance.  At least 11 states have already seen legislation filed in opposition to certain health reforms associated with the plans pending in Congress.   

     Another bill pending in Congress that could have dire effects on both Tennessee consumers and the state’s ability to attract or retain jobs is the “Cap and Trade” bill.  Placing a fee on carbon being emitted into the atmosphere would effect Tennessee consumers in a wide variety of ways, from driving cars to burning coal to generate electricity.  Legislation was approved by the State Senate last year, but still awaits action in the House of Representatives expressing Tennessee’s opposition to the proposed federal carbon cap-and-trade system.   

     Over one-third of Tennessee’s manufacturing jobs have been lost to China and India, who are unlikely to join a global cap and trade agreement.  U.S. plants are three times more environmentally efficient than Asian manufacturing.  The cap and trade bill would cause the loss of Tennessee jobs and investment, while increasing greenhouse gases in countries that do not have the same restrictions.


      Jobs and economic development — Most lawmakers agree that Tennessee must be aggressive in bringing new jobs to the state to weather the economic storm.  This includes making Tennessee a business-friendly state by holding down taxes and government red tape.  Senate Republicans have worked diligently to resist efforts to erode Tennessee’s business friendly status.  Expect Republican lawmakers to continue to defend the rights of small business owners against any further efforts to place government mandates on companies within our state boundaries.  

     Senate Republicans will be on the offense to address job growth in the state.  The state’s economic downturn and the rise in unemployment, provides legislators with serious financial challenges, but economic development and job creation will be a top priority of the upcoming legislative session.  Look for legislation to be introduced in the 2010 legislative session to expand an innovative new program sponsored by Republicans last session called TNInvestco.   

     Small businesses provide 67 percent of first jobs and produce 55 percent of innovations.  TNInvestco helps to make investment capital available to small, medium and start up businesses in Tennessee.   The goal is to develop Tennessee’s entrepreneurial infrastructure, to bring additional capital into the state, to diversify the state’s economy and to create “anchors” or “clusters” of business innovation which can result in new companies being created in Tennessee.

     In October, six investment firms were chosen to receive an allocation of $20 million dollars in gross premiums tax credits which will be marketed to insurance companies to create a pool of venture capital funds for investment in start-up and mid-stage companies in Tennessee.  Capital returned to the state through the program must first go to the General Fund.  Once enough money has been repaid, the remaining funds will be deposited in the Rural Opportunity Fund.  Two alternate investment firms are ready to participate in the program upon expansion.  

     The overwhelming majority of jobs in this state are created by small businesses.  That is why it is so important to encourage the growth of small businesses.  This new program provides a viable alternative for many companies to get the capital needed to grow and create jobs.  

Education reforms on front burner in 2010 legislative session

     Education reform will be on the front burner in the upcoming 2010 legislative session with a number of legislative recommendations coming from a blue ribbon panel studying ways to make Tennessee’s K-12 schools number one in the Southeast within five years.  The group, State Collaborative on Reforming Education (SCORE), was headed by former U.S. Senate Majority Leader Bill Frist and enlisted educational experts from selected think tanks, colleges and universities, as well as key government officials, business leaders, and representatives of the Tennessee Teacher Education Association.  Their report, entitled “A Roadmap to Success” lists 63 measurable steps to reform education in the state, some of which will need legislative approval this session.

     SCORE — 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.  This is at a time when Tennessee students will not only have to compete against students in the Southeast region, but with those in China and India.

     Some of SCORE’s key recommendations will be taken up in the Special Session on Education.  Legislative recommendations coming from the SCORE Report will not to be “budget-breaker” initiatives that will cost the state tens upon millions of dollars.  It can begin by utilizing the resources the state already has and taps into private funding, like the Gates Foundation, to implement innovative new teaching strategies.

     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 calls for more rigorous assessments and higher academic standards to create a culture of high expectations.  It prescribes additional teacher support to elevate classroom instruction to meet those expectations, including the creation of professional learning communities where teachers can learn best practices.  In addition, the report recommends focusing on recruiting the best and brightest into teaching through teacher preparation programs and by expanding high-quality alternative licensure programs.   

     In order to retain the best teachers, the report recommended fundamentally rethinking our compensation systems to reward excellence. Similarly, to promote excellence in school leadership, the SCORE report calls for creation of a statewide leadership initiative focused on enhancing the scope and quality of existing leadership training programs.    

     The report recommends greater use of data, which it says should be used on a continual basis and managed in a way that allows educators to differentiate instruction and provide low-performing students with more time on task.   Technology is also the impetus behind the recommendation that the state identify low-cost ways to expand e-learning, dual enrollment, dual credit, early college high schools, advanced placement, and International Baccalaureate courses.  This will provide high school graduates more pathways for transitioning into the workplace or postsecondary education.

     These are just some of the concepts embraced in the recommendations presented in the report and that could be under legislative consideration in 2010.  SCORE is designed to jumpstart long-term educational change in Tennessee to ensure that every child graduates from high school prepared for college or a career.

     Education Budget – Keeping Tennessee’s education improvements moving forward will be a key concern this year as Tennessee struggles to make ends meet in the toughest economic year in recent history.  About $82 million would be needed to fund inflationary growth to the state’s $3.9 billion Basic Education Program, the state’s funding formula for K-12 schools.  The Basic Education Plan (BEP) received a major overhaul in 2007 in the way it disperses money to local governments.  The first year was a substantial down payment on the reformulation of the BEP at $290 to $295 million.  The Tennessee General Assembly intended to implement the second of several phases of BEP 2.0, Tennessee’s formula for funding K-12 schools in 2008 before the state finances began to decline.  It is unknown as to when the next installment will take place.

     In a budget proposal where deep cuts will be made in critical services, it will be very difficult for education to go unscathed.  Those programs singled out by Department of Education officials as possible areas for cuts are the Coordinated School Health Program and contracts paid to teachers under the Career Ladder program.

     Higher Education – Expect to see attention in higher education shift to improving graduation rates and student performance at the state’s colleges and universities, most of which will be discussed in the Special Session on Education.  Some lawmakers favor greater utilization of the state’s two-year colleges as a preferred point of entry for incoming freshman.  Enhancing the lottery scholarship funds received by students enrolling in these two-year colleges may be proposed to accomplish this task.  Expect efforts to remain on keeping the lottery scholarships promises already made to recipients of the grants.   

     Meanwhile, there has been some discussion regarding enhancement of the University of Tennessee at Knoxville’s status as the state’s “flagship” research institution.  All Tennessee’s colleges and universities have benefitted by the stimulus funds made available under the education provisions of the federal American Recovery and Reinvestment Act. However, that money, is set to expire in 2011 when the state’s colleges and university systems will be forced to cut about $250 million from their budgets.   

Anti-crime bills, DUI, immigration and Second Amendment rights bills set for discussion when General Assembly reconvenes

     Several anti-crime, drunk driving and immigration bills are set for discussion when the General Assembly reconvenes.  However, many of the measures will face very strict fiscal scrutiny based on the state’s weakened financial condition.  The state faces substantial budget cuts for the 2010-11 budget year, including a Bredesen Administration proposal to possibly release over 3,000 non-violent felons from the state’s prisons or county jails.   

     Sex Offender Registry — Among issues still on the table from the last legislative session is one to place violent juvenile offenders on Tennessee’s Sex Offender Registry as required under the federal Adam Walsh Act.  This legislation, which would place offenders between the ages of 14 and 18 years of age on the Registry, would save governments across the state from losing millions of dollars in federal Byrnes grants.  The bill would apply to those 14 years old and older who are convicted of rape, aggravated rape, aggravated sexual battery, rape of a child and aggravated rape of a child.    

     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.  The Walsh Act requirements had been scheduled to go into effect in 2009.  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.

     The Adam Walsh Act is the sweeping federal law, named after the murdered 6-year-old son of “America’s Most Wanted” host John Walsh, required states to adopt strict new standards for registering sex offenders and providing public information about their crimes and whereabouts. This included publishing photos and addresses of sex offenders online and toughening criminal penalties for those who fail to register, among other provisions.   

     Tennessee has made substantial progress at protecting children against child sexual predators over the past three years with passage of sweeping reforms of the state’s child sexual predator laws, exceeding the Walsh requirements in some areas effecting child sexual predators.  The Juvenile Registry is the final hurdle to bring the state into compliance with the Adam Walsh Act.  

     Protecting children – Several other bills protecting children are still pending action from last year.  One such bill would let law enforcement act more quickly to protect children from sexual predators using the Internet. The bill authorizes district attorneys general or assistant district attorneys general to issue a subpoena to require production of records related to the Internet or computer use in cases of sexual exploitation of a minor.  The bill would allow the prosecutor to subpoena the name, address, local and long distance connection records, length and types of service utilized, telephone number, and means of payment for the service.   

     Actor and child protection activists David Keith, spokesman for the National Association to Protect Children, told lawmakers the United States consumes more than 50 percent of the world market of that multi-billion dollar global industry.  Since 2005, more than 750,000 pedophiles have been identified by computer in the United States, with only two percent of those being investigated.   

     Second Look Commission – Another bill associated with the National Association to Protect Children that will be debated this year would set up a Tennessee Second Look Commission to review cases and procedures related to child sexual abuse.  The Commission would review cases from the initial report of alleged abuse through to a finding or criminal conviction of abuse.  Proponents say the bill is an important first step in understanding how the system fails endangered kids. The Commission would be administered through the state’s Administrative Office of the Courts (AOC).   

DUI legislation pending action in 2010 legislative session

     The legislature will come back this year to debate two key DUI bills that are pending action from the last legislative session.  One bill would ban open containers of alcohol in vehicles, while the other would require ignition interlock devices to be installed in automobiles driven by DUI offenders.     

     There were 3,356 drunk drivers arrested for drunk driving statewide in 2008 and 327 alcohol-related fatalities. About 37% of all traffic fatalities are DUI-related. It is the leading cause of death for people from 2 to 33 years old.

     Open Container Bill — The open container bill addresses a loophole in Tennessee’s current law that allows drinking drivers to “pass the bottle” to a passenger if they get pulled over by law enforcement.  The full Senate approved the legislation in 2009, but the bill failed in a subcommittee in the House of Representatives, even though the bill contains language that exempts taxis, limos, and party buses.   

     The bill would have allowed the state to have control over $12 million in federal highway funds, which have been redirected due to non-compliance with federal safety requirements that includes a ban on open containers of alcohol in vehicles.  The transferred funds may be used only for alcohol-impaired driving countermeasures, enforcement of drunk driving laws, or hazard elimination programs.    

     The National Highway Safety Administration (NTSB) claims open container laws reduce the number of alcohol-related traffic fatalities by 5.1 percent.  Tennessee is one of only eleven states without an open container law.

     Ignition Interlock — The NTSB has also urged passage of a more uniform and mandatory system for installation of interlock in Tennessee, which will likely garner continued legislative debate this year. 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. About one-third of all drivers arrested or convicted of driving while intoxicated are repeat offenders.

     The current alcohol ignition interlock technology makes it easier for courts to require drunk drivers to utilize the device.  The legislation is designed to help curb repeat offenses and get drunk drivers off Tennessee roads.


     DUI / Impact to Victims – Expect legislation to be debated this year calling for courts statewide to utilize a program providing that drunk drivers hear from victims of crime regarding the tragic negative consequences they have experienced due to a DUI or alcohol-related crash. The goal is to provide offenders with a clearer picture of the direct results of his/her choice to drink and drive.  

     Under such a program, the offender would be assigned to a local program upon being sentenced. It would then be up to the courts to take action against those who did not comply.

     According to the John Howard Society, some studies have shown that permitting victims to make statements and to give testimony is psychologically beneficial to them and aids in their recovery.  Several Tennessee counties already utilize a DUI program involving crime victims.  The legislation would expand such efforts statewide.


General Assembly will revisit Second Amendment rights bills

     Clarification / Restaurant Carry — The General Assembly passed several bills during the 2009 legislative session that uphold the U.S. and Tennessee’s Constitutional right to bear arms.  Among Second Amendment rights bills approved in the last session of the General Assembly was a new law to allow law-abiding handgun permit holders to “carry” into restaurants serving alcohol as long as the owners of the premises have not posted notification that they are banned.  That bill, however, was struck down by Davidson County Chancellor Claudia Bonnyman, who said the law was ambiguous.  The state plans to appeal the decision which could take up to a year reach the court.

     In the meantime, legislation will be filed this year to address any “vagueness” in the new law as the Judge’s decision centered on that issue.  Look for the new legislation to have clarifying language, particularly as it applies to the posting of notices.   

     Privacy of information / permit holder database – Another gun bill which could come again before State Senators aims to protect the confidential information of handgun permit holders.  The proposal, SB 1126, would protect the confidential information by removing the handgun permit holders’ database from provisions of the state’s open records law.  Many citizens have been offended by the publication of the database by newspapers and media websites.  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.


Lawmakers to consider traffic camera proposals

     Lawmakers will consider several traffic camera proposals in the 2010 legislative session. The use of automated systems for surveillance of intersections and roadways is growing as more communities across the state are utilizing the devices.  

     Despite the testimony from law enforcement officials regarding the public safety aspect of utilizing the cameras, lawmakers say they receive regular complaints from constituents regarding their use. This includes violation of rights and that the motivation behind the cameras is money instead of safety.  Expect several bills regarding this issue to be debated this year in the General Assembly, from a direct ban on the cameras to restrictions on how the fines must be utilized.  Legislation has also been discussed forcing communities to display clearer signage and mandating that only companies headquartered in Tennessee be allowed to operate or process cameras or citations.


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