NASHVILLE, Tenn. – Governor Bill Haslam presented his State of the State / Budget Address to lawmakers on Monday night as he and the General Assembly continue a multi-year focus on improving education and recruiting new and better paying jobs to Tennessee. The governor unveiled major legislation to make Tennessee the first state in the nation to offer all adults without a degree tuition-free access to community college. The Tennessee Reconnect Act would establish a last-dollar scholarship for adults living in the state which would allow them to attend a community college tuition-free.
In addition, the governor announced his proposed Tennessee STRONG (Support, Training, and Renewing Opportunity for National Guardsmen) Act that would create a pilot program to provide eligible members of the Tennessee National Guard tuition funding toward a first time bachelor degree through a tuition reimbursement program.
Both proposals build on the Tennessee Promise scholarship program which has provided tuition-free assistance to approximately 33,000 high school graduates since it was implemented in 2015.
“The governor has been a real game changer in education,” said Senate Education Committee Chairman Dolores Gresham (R-Somerville). “Our goal is to establish and sustain a world class education system in Tennessee and these proposals, along with our previous efforts, have catapulted us forward in that effort.”
The purpose of the legislation is to build and sustain the state’s robust economic growth and to make Tennessee’s workforce more competitive. In 2013, Tennessee launched its Drive to 55 goal of equipping 55 percent of Tennesseans with a degree or certificate by 2025. Tennessee needs 871,000 degrees to reach the state’s Drive to 55 goal, but only 645,000 high school students are expected to graduate between 2014 and 2022.
The Reconnect Act, which is an expansion of a grant program launched in 2015, especially aims to attract approximately 900,000 Tennesseans who have earned some college credit but no degree. Adults without a certificate can already attend Tennessee Colleges of Applied Technology (TCATs) tuition-free under the current Reconnect program. This proposal would expand that program’s access to community colleges and relieves some of the previous requirements to receive assistance. The Reconnect expansion would be funded out of lottery reserves at no cost to taxpayers.
Likewise, the STRONG Act would provide an opportunity for those who protect and serve their state and country to receive their bachelor degree, a move that would give Tennessee’s National Guard a competitive edge in recruitment. All but four states nationwide, and all states adjacent to Tennessee, already offer 100 percent state tuition assistance for those who are serving in the Guard.
Governor Haslam reiterates call for widening broadband and enhancing state’s infrastructure in State of the State Address
During his State of the State Address, Governor Bill Haslam reiterated his call to widen access to broadband Internet services by asking lawmakers to support the Tennessee Broadband Accessibility Act. The legislation would provide $45 million over three years in grants and tax credits for service providers to assist in making broadband infrastructure available to unserved homes and businesses. It would also permit Tennessee’s private, nonprofit electric cooperatives to provide retail broadband service in an effort to reach rural customers.
Tennessee currently ranks 29th in the U.S. for broadband access, with 34 percent of rural Tennessee residents lacking access at recognized minimum standards. The governor said allowing Tennessee’s private, non-profit electric co-ops to provide retail broadband service and investing $15 million in grants and tax credits annually will help spur deployment in rural unserved areas – opening them up to economic investment and job growth. The improved connectivity would also assist in increasing education opportunities, promoting agriculture advancements and providing health care options like telemedicine.
On transportation infrastructure, Governor Haslam asked lawmakers to support an increase in highway user fees, which is included in his proposed budget named the Improving Manufacturing, Public Roads and Opportunities for a Vibrant Economy (IMPROVE) Act. The IMPROVE Act also cuts the state sales tax on groceries another .5 percent to 4.5 percent, makes Tennessee’s franchise and excise tax on manufacturing businesses more competitive by allowing companies to go to a single weighted sales factor, and cuts the Hall income tax 1.5 percent this year with a commitment to cut it another 1.5 percent next year.
An estimated $270 million in taxes would be cut annually under the proposal, bringing the total number of tax cuts made since 2011 to $540 million per year.
“At its core, transportation and infrastructure are some of the most basic needs provided by state government, and a safe and reliable network is vital to the Tennessee we can be,” said Governor Haslam. He said, “Scores of mayors across Tennessee – cities and counties, rural and urban – have told me that, if we don’t do something to address the fuel tax, they will have no alternative but to raise the property tax in their municipalities.” The governor’s proposal would mean $78 million annually in increased revenue for county road projects in Tennessee and $39 million for cities.
The IMPROVE Act calls for increasing the highway user fee by 7 cents for a gallon of gas and 12 cents for a gallon of diesel and increases car registration fees by $5 for the average passenger vehicle. Approximately 40 percent of the revenues received are paid by out-of-state travelers. Tennessee relies on fuel taxes to fund its highways and does not use debt financing, tolls, or general fund revenues. The governor’s proposal places an annual road user fee on electric vehicles and increases charges on vehicles using alternative fuels.
The IMPROVE Act also includes changing the state’s open container law to allow the Tennessee Department of Transportation flexibility to use $18 million in existing federal dollars on roads. Presently, it is illegal to consume alcoholic beverages while driving in Tennessee, but that law does not extend to passengers. Because state law does not meet federal requirements, some of Tennessee’s share of federal transportation funds have been diverted from road projects to other areas like DUI enforcement efforts.
Lawmakers will begin discussion on the governor’s proposal as various House and Senate committees study the measure in the coming weeks, with other plans to boost road funds expected to be considered as well.
Governor’s budget continues state’s strong commitment to K-12 education and fiscal stewardship
Governor Bill Haslam’s $37 billion budget continues his and the General Assembly’s strong commitment to education by providing $200 million to fund the state’s Basic Education Program (BEP). This includes $100 million to improve teacher salaries, $22 million to help schools serve high need students and $15 million for career and technical education equipment.
Since 2011, lawmakers have increased total K-12 spending by more than $1.3 billion. This includes increases of more than $430 million for teacher salaries during that time period.
The budget proposes allocating $132 million in non-recurring funds to the state’s Rainy Day Fund to an all-time high of $800 million, well on the way to the statutory guideline of $1 billion. The Rainy Day Fund, which acts as a savings account to help the state weather downturns in the economy or emergencies, dipped from $750 million in 2008 to $284 million in 2011 and is still short of the pre-recession years’ level.
For a second year in a row and in Tennessee’s recorded history, the state budget does not take on any new debt. Tennessee has the lowest debt per capita and the lowest taxes as a percentage of personal income in the nation. The governor said that if the IMPROVE Act becomes law, the state would still have the lowest taxes in the nation.
In addition, the state is lauded for continuous sound management of its long-term liabilities. The budget proposal addresses the state’s Post-Employment Benefits (OPEB) liability to continue this fiscally responsible practice.
Other highlights of the budget include:
- $77 million for state employee pay increases and market rate adjustments targeting high-turnover positions in state government;
- $655 million in state dollars for maintenance and new buildings across general government and higher education;
- $135 million transferred from the General Fund to pay back the Highway Fund;
- $78 million for higher education and the Complete College Act;
- $15 million for career and technology education equipment;
- $21 million to fund recommendations from the Rural Task Force;
- $11.6 million to fund more than 700 additional slots in the Employment and Community First CHOICES program; and
- $9.5 million combined to expand substance abuse and crisis intervention treatment services and supports.
Senate Judiciary Committee Approves Resolution calling for Convention of States to rein in federal debt
The Senate Judiciary Committee approved a resolution this week calling for a convention of states in Nashville for the purpose of adopting a balanced budget amendment to the U.S. Constitution. The convention would be the first formal meeting of the states since 1861.
Senate Joint Resolution 9, sponsored by Senate Judiciary Committee Chairman Brian Kelsey (R-Germantown), provides that the convention of states would be for the limited purposes of 1) planning for, and recommending rules and procedures for an Article V Convention to amend the U.S. Constitution and 2) recommending to Congress the initial date and location in which they would meet. The legislation is co-sponsored by Senate Government Operations Committee Chairman Mike Bell (R-Riceville), Senate Republican Caucus Chairman Bill Ketron (R-Murfreesboro), and Senator John Stevens (R-Huntingdon).
“It is time for states to step up and solve the problem with almost $20 trillion of national debt that has been amassed in Washington,” said Sen. Kelsey. “The Tennessee Balanced Budget Amendment Planning Convention will create a structure for the Balanced Budget Amendment Convention and will address many of the unanswered questions as to how an amendment convention will function.”
Article V provides that upon the application of two-thirds of the state legislatures, Congress shall call a convention of the states to propose amendments to the U.S. Constitution. The resolution adopted by the Judiciary Committee sets the date for a convention of states for July 11, 2017, with the Article V Convention following as early as November.
Presently, 28 of the necessary 34 states have passed the application resolution limited to proposing a balanced budget amendment. The organizational structure for the Tennessee Balanced Budget Amendment Planning Convention will be virtually the same as the convention for proposing the amendment as each are a convention of the states. State legislatures will choose a delegation to represent the state at the convention, each state will have one vote, and the convention will deliberate and make recommendations.
“Founding Fathers James Madison and George Mason insisted that states have a method for amending the Constitution because sometime in the future the federal government would grow to the point it would become deaf to states’ needs,” added Sen. Bell (R-Riceville).
Kelsey said that last president who actually paid off the entire U.S. debt was Andrew Jackson. “We want Tennessee to be leaders of this effort once again,” he added.
The resolution now goes to the floor of the Senate for final consideration.
Tennessee leads nation in Small Business Job Growth – Tennessee leads the nation in small business job growth according to a report released this week by Paychex, the nation’s largest payroll processors. The state led in small business employment growth in January, rising over 4.2 percent last month. Paychex President Marin Mucci said the increase tracks with the positive performance of other economic indicators. The Paychex index analyzes and tracks small business employment trends each month using payroll data from their client base of more than 350,000 employers across the country.
Heart Health — The State Senate unanimously approved a resolution sponsored by Senator Richard Briggs (R-Knoxville) this week to recognize the American Heart Association’s annual National Wear Red Day on February 3. Senate Joint Resolution 15 applauds the effort put forth by this organization on behalf of women to raise awareness of heart disease which saves lives. While 80 percent of cardiovascular diseases can be prevented, in the U.S. alone, they kill one in three women, and one woman dies every eighty second do to a cardiovascular disease or a stroke.
Unemployment Compensation — Department of Labor and Workforce Development Commissioner Philip Burns appeared before the Senate State and Local Government Committee this week to address concerns regarding the state’s new system and temporary call center for Tennesseans seeking unemployment benefits. The commissioner took note of the concerns expressed by senators during the meeting and explained efforts being made by the department to create a smoother transition into the new system. Commissioner Burns will be re-joining the committee in four weeks as committee members continue to evaluate the progress made to get unemployment benefits to eligible persons in a timely manner.
Armed Forces / Veterans Hospitals – The State Senate unanimously approved Senate Joint Resolutions 4 and 5 this week which calls for the Secretary of the Department of Veterans Affairs to establish VA hospitals in Knoxville and Clarksville. The Resolutions are sponsored by Senator Mark Green (R-Clarksville). The State of Tennessee is home to over 500,000 veterans of the United States Armed Forces. Clarksville in Montgomery County is the home Fort Campbell and the 101st Airborne Division with about 28,000 veterans residing there and 8,000 residing just across the state line in Kentucky. Veterans from Clarksville must drive 80 miles or more to receive care, while those in East Tennessee may have to drive more than 150 miles. Senator Green also won approval of Senate Bill 12 which would name the dining area of the Brig. Gen. Wendell H. Gilbert TN State Veterans Home to recognize and honor Command Sergeant Major (Retired) Sidney Brown of the U.S. Army for his valor and commitment to his country. The highly decorated Command Sergeant Major (Retired) Sidney Brown overcame racism as one of the first African American paratroopers after World War II and was a distinguished veteran of Vietnam.
Election Ballot – Legislation making it easier for voters to locate local election candidates on the ballot in the midst of a presidential primary year was approved by the Senate State and Local Government Committee this week. Senate Bill 47, sponsored by Senator Becky Massey (R-Knoxville), calls for reordering the ballot to allow candidates for state, municipal and county election to immediately follow the names of the presidential candidates. The names of presidential primary delegates would then follow. The bill also increases the number of vertical columns for each respective party’s primary election on the ballot from two to three to help ease a voter’s search. The legislation follows a long list of delegates in the 2016 presidential primary which was confusing to some voters wanting to access local election races.
Fallen Officers Honored — The Tennessee State Senate adopted Senate Joint Resolution 23 this week to honor the memory of Officer Kenneth Ray Moats of the Maryville Police Department. The resolution is sponsored by Senator Doug Overbey (R-Maryville). Officer Moats lost his life in the line of duty on August 25, 2016. In addition, the Senate also stood to honor Officer Eric Mumaw of the Metro Police Department who lost his life on Thursday morning during a rescue in the Cumberland River. Following the moment of silence and prayer, Lt. Governor McNally asked that a formal request be made to Governor Haslam to fly the flag at half-mast in honor of the fallen hero. According to the National Law Enforcement Officers Memorial Fund, nationwide 135 police officers were killed in the line of duty in 2016.
Road Safety — The Senate Transportation and Safety Committee heard a presentation on the State of Safety in Tennessee by representatives of the American Automobile Association (AAA) this week. Tennessee Field Vice President Tony Alberton and Tennessee Public Affairs Director Stephanie Milani reported there has been an eight percent rise in fatal crashes in Tennessee since 2015. Albertson and Milani believe an increase in distracted driving coupled with intoxicated driving-related crashes are to blame for the increase. Distracted driving has increased 134 percent since 2006. Fatalities from two of the most vulnerable driving groups increased with teen related fatalities up 18 percent and senior related fatalities up 10 percent. With one in three deaths being the product of an unrestrained passenger, AAA brought attention to the seat belt laws in Tennessee which allow for only secondary enforcement for passengers in the back seat. They suggested the General Assembly should redefine seat belt laws and make back seat passengers’ seat belts a primary enforcement to reduce fatalities.
FOCUS ACT / Appointments — The Senate Education Committee adopted three resolutions this week confirming appointments to the University of Memphis Board, the Middle Tennessee State University Board and East Tennessee State University Board. Passage of Senate Joint Resolutions 29, 30 and 32 follows implementation of the Focus on College and University Success (FOCUS) Act adopted last year. The purposed of the act was to better align the state’s postsecondary education by providing a sharpened focus on the governance of Tennessee’s 13 community colleges and 27 colleges of applied technology (TCATs), while granting four-year state universities additional autonomy to empower each institution to be successful in this new environment. The new law prescribed local boards for Austin Peay State University, East Tennessee State University, Middle Tennessee State University, Tennessee State University, Tennessee Technological University and the University of Memphis. Among appointees approved in the resolution was former Lt. Governor Ron Ramsey who was nominated to serve on the East Tennessee State University Board.
Gatlinburg Wildfires – Senator Doug Overbey (R-Maryville) briefed members of the Senate Finance Committee this week on his ongoing efforts to help residents of Sevier County rebound from the November wildfires that caused 14 deaths and burned 17,000-plus acres. He is sponsoring legislation that provides a measure of tax relief to owners of property damaged in the disaster. Overbey said residents can also use the sales tax relief legislation passed to help victims of the Nashville floods which allows for a refund of sales tax paid on certain items like building supplies, major appliances and furniture used to restore damage in their primary residence. This applies to residents in areas which have been declared a disaster by the Federal Emergency Management Agency (FEMA). “The outpouring of support from the members of the Senate and House have been unanimous in saying we want to do what we can do to help the folks of Sevier County, Gatlinburg and Pigeon Forge and that is heartfelt and deeply appreciated,” he said. Overbey said talks are continuing with state leaders about other ways to assist wildfire victims.