(NASHVILLE, TN), March 17, 2011 — Governor Bill Haslam presented his State of the State / Budget Address to the General Assembly this week outlining his proposals to deal with the state’s current budget crunch, while working towards reforming education and making our economy stronger to welcome new jobs to Tennessee. The $30.2 billion balanced budget is almost $2 billion less than the current 2010-11 budget of $32 billion. It contains no new taxes and maintains essential government services by focusing reductions in administrative areas to minimize any impact felt by Tennessee taxpayers.
The Governor said the budget calls for the state to spend less money but work harder to stretch public dollars, including making state government more “customer friendly” for Tennesseans. At the same time, the Governor asked lawmakers to assist in transforming how government works to reflect current economic conditions.
“I want to emphasize that our current financial constraints are not a temporary condition,” said Governor Haslam. “I think what we are seeing in government today really is the ‘new normal.’ Every government, ours included, will be forced to transform how it sets priorities and makes choices.”
Tennessee is in better economic condition than most states, many of whom are struggling to stay afloat amid huge budget deficits. Over the last three years, Tennessee has reduced discretionary spending by 21 percent.
Some of the highlights of the 2011-12 budget include:
$300 million will be used for medical inflation for TennCare and CoverKids; to fund the Basic Education Program; for state health insurance premiums and for state employee pay raises of 1.6 percent.
There will be 1,180 fewer state positions – almost 90 percent of the reductions coming from eliminating unfilled positions and the projects tied to non-recurring state and federal stimulus funds.
Provides for an average departmental reduction throughout state government of 2.5 percent.
It restores $69.3 million to the Rainy Day Fund, the state’s savings account, increasing it to $283.6 million at June 30, 2011, and $326.6 million at June 30, 2012. (Before the economic downturn, on June 20, 2008, the fund was at $750 million.)
$186 million in Economic and Community Development projects, construction of a new $7 million public intermodal facility at Port Cates Landing, which anticipates a $13 million federal grant and $10 million operating grant for the Memphis Research Consortium to encourage collaboration in research and strategy in the health field.
The proposed budget is based on a realistically conservative 3.65 percent revenue growth at $473 million.
Governor Haslam asked the General Assembly to join him in reviewing the state’s boards and commissions to see whether 140 are necessary. He noted the progress of the Senate Government Operations Committee and its Chairman, Bo Watson (R-Hixson), who have been looking into the matter for the past 18 months. He also asked the General Assembly to examine how much state government authority through rules and regulations has been shifted to these agencies.
“Tennessee has a history of fiscal conservatism,” said Senate Majority Leader Mark Norris (R-Collierville), sponsor of the budget legislation. “Governor Haslam is to be commended on his first budget. It is responsible, realistic, and refreshingly straightforward as we proceed along the road of economic recovery.”
“Governor Haslam and Finance Commissioner Mark Emkes have done a remarkable job in the past 10 weeks in constructing and presenting this budget, especially given the current financial constraints,” said Senate Republican Caucus Chairman Bill Ketron (R-Murfreesboro). They have submitted a lean budget that retains essential services and puts more money in our “rainy day” account, while prioritizing education reform and job creation.”
The budget proposal, also called the appropriations bill, now travels to the Finance Committees of both Houses for discussion there. The budget will continue to be a top priority for the remainder of this legislative session.
Education Reform Highlighted — Governor Haslam’s State of the State address also highlighted his legislative agenda which includes several education reform measures designed to prepare students to compete in a globally competitive marketplace. The proposals include removing the 90-cap limit on charter schools; use of lottery scholarships during the summer term to aid timely graduation from the state’s technical centers, community colleges and four-year institutions; and, teacher tenure reform.
“Every discussion we have about education should always begin and end with what is best for the child in the classroom,” Haslam said. “In education we are blessed with the tools to be game changers for all students. Better teachers; improved school leadership with great principals; standards of academic excellence; parental involvement and students who are challenged to learn – that can and will happen in Tennessee.”
“I am very pleased with the governor’s ambitious education agenda,” said Senate Education Chairman Dolores Gresham (R-Somerville). “We must increase the number of post-secondary graduates in order to meet the challenges of a competitive new era. In turn, a well educated workforce will give Tennessee better footing to attract new and better paying jobs to our state to give these students more opportunities to succeed.”
Telecommunications bill overcomes first hurdle
Legislation sponsored by Senate Majority Leader Mark Norris (R-Collierville) that would reduce the disparity between intrastate and interstate access fees currently paid by larger telecommunications companies to smaller cooperatives or companies that generally serve rural customers has overcome its first hurdle with passage in the Senate Commerce Committee after an agreement was reached among all interested parties. As amended, the legislation would reduce the disparity between intrastate and interstate access fees by a rate of 20 percent each year for the next five years beginning April 1, 2012 and each subsequent April 1.
When a customer places a telephone call, it generally travels over multiple networks, which are owned by different telephone companies, en route to its destination. To compensate owners for the use of their networks, telephone companies charge each other for calls that originate on each others networks. The carrier whose customer places the call pays a per-minute charge to the carrier whose customer receives the call. When the call is a long distance call, the charges are referred to as access charges.
There are two kinds of access charges. Calls that originate in one state and terminate in a different state are subject to interstate access charges. These calls are regulated by the Federal Communications Commission (FCC) and are the same throughout the U.S. Calls that originate and terminate within the same state are subject to intrastate access charges and fluctuate throughout the state. It is the intrastate access charges that this bill addresses.
Senate Bill 598 establishes a requirement that all telephone companies in Tennessee charge other telephone companies the same rate for connecting calls into their network, whether the calls originate inside or outside the state. It establishes a defined transition period during which intrastate access rates will be brought down in equal steps to the same level as interstate access rates.
The bill also provides the ability for telephone companies to account for increases in interstate access rate changes, which are federally governed, and change their intrastate rates to mirror federal changes. In addition, it requires all telephone companies to file and maintain a tariff price list with the Tennessee Regulatory Authority setting their access rates and structures.
National Foundation CEO tells Senate Education Committee that Complete College Act places state at the cutting edge of higher education reform nationally
Lumina Foundation CEO Jamie Merisotis appeared before the Senate Education Committee this week to emphasize the importance of increasing the number of post-secondary graduates in Tennessee, praise Tennessee’s new Complete College Act and offer resources from his organization for continued reform. Merisotis told Education Committee members, “No committee in the Tennessee Senate is more vital to the future of your state than the one in this room.”
The Lumina Foundation for Education, based in Indianapolis, is the nation’s largest private foundation dedicated exclusively to increasing students’ access to and success in postsecondary education. The foundation’s goal is that, by the year 2025, 60 percent of working-age Americans will hold high-quality college degrees or credentials. The national degree-attainment rate currently is just below 40 percent, while Tennessee’s proportion of working-age residents with a college education stands at 32 percent.
Merisotis praised Tennessee’s landmark Complete College Tennessee Act as huge step forward and model legislation for other states. Among other items, that legislation retooled the state’s funding formula for higher education to make it substantially based on outcomes by looking at end of term enrollment or student retention as well as timely progress toward degree attainment and degree completion.
“By rewarding institutions for graduating students, the Complete College Tennessee Act has again placed the state at the cutting edge of higher education reform nationally,” Merisotis said. “With this legislation, you wisely made an explicit link between the taxpayer money you provide to colleges and universities each year to the results they are able to achieve for the students and state residents.”
The Georgetown University Center on Education and the Workforce has estimated that by 2018, 63 percent of all of the nation’s jobs will require some form of postsecondary education or training. Between now and 2018, Tennessee will need to fill about 900,000 job openings resulting from job creation, retirements and other factors. Of these expected vacancies, more than half will require workers with college degrees or other postsecondary credentials.
“The Lumina Foundation has served as a key leader for higher education reform in Tennessee,” said Senate Speaker Pro Tempore Woodson. “I truly appreciate their dedication to ensuring success of our state’s post-secondary students.”
General Welfare, Health and Human Resources Committee approve legislation calling for Tennessee to joint Health Care Compact
State Senator Mae Beavers (R-Mt. Juliet) won passage of Senate Bill 326 this week in the Senate General Welfare Committee calling for Tennessee to join an interstate compact with the express purpose of returning the responsibility and authority for regulating health care to the states. There are also plans to file the “Health Care Compact” in a number of state legislatures during their 2011 sessions.
“An interstate health care compact is a powerful vehicle for states to confront the federal health care law mandated by Washington directly,” said Senator Beavers. “One size does not fit all. States have different needs which are not recognized in the federal mandates passed by Congress last year. The Health Care Compact does not mandate how states will handle health care within their boundaries. It leaves them to decide how to create a system that fits their needs, providing greater accountability and more flexibility in delivering citizens a more efficient and effective system.”
The Health Care Compact provides a legal framework in which states can create their own healthcare systems. It essentially provides a permanent waiver to each member state to create whatever healthcare regulations the legislature deems best for the citizens of that state. The structure protects Medicare and Medicaid funding by allowing member states to access federal tax revenues directly and without strings attached. Beavers said the combination of a secure funding stream and maximum flexibility for state legislators will create the conditions for multiple solutions to emerge to the health care crisis.
DUI / Driver’s Licenses — The Senate Judiciary Committee has approved Senate Bill 343 sponsored by Senator Doug Overbey (R-Maryville) which increases from three to five years, the minimum time period a driver’s license may be revoked for a third DUI offense. The legislation increases, from six to eight years, the minimum time period a driver license may be revoked for a fourth or subsequent offense. Alcohol-related fatalities represent 31 percent of the state’s traffic fatalities.
Court process / Guilty by Reason of Insanity — Senate Judiciary Committee members voted this week to authorize a court to order defendants who are in custody and are found not guilty by reason of insanity of a felony offense against the person, such as felony sex offenses, assaults, kidnappings, and robberies, to remain in custody after the verdict to receive an outpatient mental health evaluation. Presently, Tennessee courts are required to order outpatient evaluations for all individuals acquitted of a criminal offense when found not guilty by reason of insanity. However, there is no mechanism that allows the court to detain a potentially violent individual in the time period between the verdict of not guilty by reason of insanity and the outpatient evaluation. The bill, Senate Bill 1532, is sponsored by Senators Mark Norris (R-Collierville) and Doug Overbey (R-Maryville).
Charter School Grant — Tennessee has received a grant of nearly $40 million to grow and support charter schools in Tennessee. The funds are part of a broad public-private partnership to increase the number of high performing charter schools in the state. The unprecedented public-private partnership creates a $30 million charter growth fund built through a $10 million grant in First to the Top funding and $20 million in private funds raised in partnership with the Charter School Growth Fund and the Center for Charter School Excellence in Tennessee. The funds will provide for the launch of 40 new startup charter schools and the growth of 4 to 6 charter school management organizations.
Road Funds / Advertising — Senator Jim Tracy (R-Shelbyville) led passage of Senate Bill 31 through the Transportation Committee which he chairs. The bill would allow companies to advertise on the Tennessee Department of Transportation’s (TDOT) emergency trucks. The funds would go to TDOT to build or repair roads.
Mothers / Nursing — The Senate General Welfare, Health and Human Services Committee has approved Senate Bill 83, sponsored by State Senator Mike Faulk (R-Church Hill) to delete Tennessee’s current 12-month age limit in which nursing mothers can breast feed their babies in public. Faulk sponsored the bill earlier this year at the request of a mother in his senatorial district, but the proposal has since been gaining momentum, including the support of many health experts who believe there are long-term benefits from nursing children longer. According to the American Academy of Pediatrics (AAC), breastfeeding protects against a variety of diseases and conditions in the infant such as bacterial meningitis, bacteremia, diarrhea, respiratory tract infections, necrotizing enterocolitis, ear infections, urinary tract infections and late-onset sepsis in preterm infants. It can also protect the child against developing type 1 and type 2 diabetes, lymphoma, leukemia, and Hodgkins disease, as well as childhood obesity. In addition, breastfeeding provides long-term preventative effects for the mother, including an earlier return to pre-pregnancy weight and a reduced risk of pre-menopausal breast cancer, ovarian cancer and osteoporosis.
Tennessee State Patrol — Senate Bill 1494, sponsored by Senator Steve Southerland (R-Morristown) has been approved by the full Senate to drop the word “highway” from the name of Tennessee’s State Highway Patrol. The name change was requested to better reflect the many other activities the officers do such as riot squads, bomb detection units and SWAT teams.
Government efficiency — Legislation sponsored by Lt. Governor Ron Ramsey (R-Blountville) which would streamline the legislative process and save taxpayer dollars has cleared the Senate’s State and Local Government Committee by a vote of 6 to 3. Senate Bill 725 avoids duplication in state government by eliminating 11 joint oversight committees and shifting their responsibilities to the standing committees of each house of the General Assembly, saving the state $851,800.
911 Funds — The full Senate has approved Senate Bill 293 sponsored by Senator Mike Bell (R-Riceville) to protect funds collected for Tennessee’s 911 emergency communications system from being diverted for other general fund purposes.
Ten million dollars have been diverted over the past several years from the fund. This bill would ensure that citizens who are depending on the 911 emergency communications system will continue to be able to access emergency personnel in a timely fashion.
Volunteer Firefighters Week — Legislation was approved by Senate State and Local Government Committee calling for the Governor to proclaim the first full week of March each year as “Volunteer Firefighters Week.” Senate Bill 739, sponsored by Senator Mike Bell (R-Riceville), recognizes “those brave men and women who have put their lives on the line while fighting fires, and those who have lost the battle in order to save and protect their fellow citizens.”
Governor Recognizes Tennessee Military in State of State Address – Governor Bill Haslam’s recognized the sacrifices of Tennessee’s men and women serving in the U.S. Armed Services and Tennessee National Guard in his State of the State Address on Monday. Since September 11, 2001, more than 20,000 men and women have served in the Tennessee National Guard, Army and Air Force. The Governor pointed out that many of them are state employees, including 59 employees of the Department of Safety and Homeland Security who will go on active duty. Mobilization orders or notification of planned deployment will touch another 1,804 men and women. Since 2001, 136 Tennesseans have lost their lives in service to their country and state.