General Assembly passes budget and several key bills before adjourning 2008 legislative session

Contact:  Darlene Schlicher
(615) 741-6336 or email:  [email protected]

General Assembly passes budget and
several key bills before adjourning 2008 legislative session

(NASHVILLE, TN), May 21, 2008 — The 105th General Assembly passed a state budget and several key bills before adjourning the 2008 legislative session to become a part of Tennessee history.  The action came after four and a half months of legislative deliberations and is one of the earliest adjournments in recent years.

The State Senate had targeted an April adjournment date; however, significant revenue shortfalls required consideration of a revised budget proposal from Governor Phil Bredesen to fund the 2008-2009 fiscal year, which will start in July.  Among items the governor cut from the budget were  $22 million to extend pre-K, a two percent pay raise for state employees, $86.5 million for a scheduled installment to the Basic Education Program 2.0 (BEP 2.0), $55.8 million in base reductions from higher education, and money for an automatic license revocation program for drunk drivers.  He also devised a plan to reduce Tennessee’s state government workforce by 5 percent, or 2,000 employees.

The employee buyout plan entails offering “voluntary buyouts” to as many employees in the executive branch of government as possible. If reductions are achieved through voluntary buyouts, the cost is estimated to be approximately $50 million in one-time funds. In turn, eliminating the required number of positions will reduce state payroll by an estimated $64 million in recurring funds.  Following are some of the details of the plan:

  • Cash incentives: Employees in job classifications or business units targeted for reorganization will be offered a one-time “base payment” equal to four months of the employee’s pay at the time of separation. Employees also will be offered a “service payment” of $500 per year of service. Additionally, employees will receive their next scheduled longevity payment and will be paid for their accrued and unused annual leave and accrued and unused compensatory time.

  • Health insurance: Employees will be offered continuous health insurance beyond the point of separation, six months of which will be available at the same contribution rates paid by the state and employees at time of separation. Employees will receive an additional 12 months under COBRA.

  • College tuition: Employees will be offered two years of tuition at a public community college or university in Tennessee. It is estimated that the cost will average $7,122, based on the average tuition at state higher education institutions. Tuition reimbursement will be administered by the Tennessee Student Assistance Corporation

The General Assembly did restore enough money to provide state employees, higher education employees, and teachers with three of more years of service with a $400 Employee Assistance Payment Program, or bonus, to be distributed by October 1.   In addition, the legislature voted to restore the state’s share of state employees’ 401 K match from $40, back to the current $50 contribution per month.  Over 70 percent of state employees participate in the 401 K match plan.

Under the proposal, 27 percent of the budget will go to TennCare, 30 percent to Pre-K-12 education, 12 percent to higher education, 7 percent to transportation, with the remaining 36 percent going to other state government needs.

Lottery Scholarship Plan approved by

Among key bills approved during the final day of the 2008 legislative session was a plan to distribute excess lottery dollars to Tennessee students.  The legislation, sponsored by Senate Education Committee Chairman Jamie Woodson (R-Knoxville), will provide college scholarship opportunities to 12,000 more students.  One of the key points of the bill is extending the 2.75 grade point average (GPA) requirement for students to maintain the HOPE Scholarship.

Currently, the 2.75 GPA requirement to retain the HOPE scholarship applies through the student’s first 45 hours.  The bill takes that 2.75 through 75 hours at which time the student can benefit from a “fresh start” provision.  That provision allows students to use their current semester average, rather than the cumulative average, in obtaining the 3.0 needed to continue the scholarship into the senior year.

The bill also provides scholarship opportunities to non-traditional students, military veterans, those who are dually enrolled in college and high school, students seeking medical degrees who agree to serve rural areas, and foster children.  There is $461.8 million in the lottery reserve account, of which $50 million must be kept in savings under current
law.  The General Assembly also benefits from ongoing net revenues of an estimated $11.4 million more than is needed to continue the current programs funded by lottery proceeds.

Highlights of the plan include:

  • continues funding of $25 million for Pre-K
  • creates the Helping Heroes Program, providing $750,000 to help 375 Tennessee veterans who have served in Iraq and Afghanistan
  • provides $10 million in recurring funds to the Tennessee Student Assistance Corporation for the purpose of awarding needs-based grants
  • extends the 120 credit hour-limit to five years in order to accommodate any hours lost due to transfer, change of major, or majors requiring more than 120 hours of credit
  • provides a Rural Health Pilot Program which establishes scholarships for students who agree to work in underserved Tennessee communities
  • requires the Tennessee HOPE Foster Child Tuition Grant be the total cost of attendance (a technical correction to match legislative intent)
  • establishes a Laptop Pilot Program to help 100 students per grand division to access more online course opportunities for dually enrolled students
  • provides full HOPE scholarship to two-year institutions with on-campus housing
  • changes provisions on nontraditional students by lowering the current number of hours a student must compete on their own from 24 hours to 12, eliminates
    “entering freshman” language, and provides a fresh start provision by allowing a student to be eligible after a two-year absence from enrollment (helps provide
    1,772 scholarships)
  • a contingency provision would remove the home school requirement of two years and implements the 21 ACT requirement, if there is enough growth in revenues
  • contains language of intent to lower GPA to 2.75 to maintain lottery scholarship across the board when funds become available

The lottery scholarship distribution plan is in addition to the 950,000 K-12 students that would benefit from the Energy Efficient Schools Program, which was also approved this week. The bill is especially needed this year to help bolster capital needs of local K-12 schools due to the administration’s cuts in the Basic Education Program 2.0 (BEP) improvements that were slated for distribution this year.

The proposal partners the state with TVA, Oak Ridge Laboratory, and other energy experts by setting up a Council that would guide schools in energy-saving options.  The Council would set up the rules for distribution of the funds, which would come in the form of grants and loans.  The Council could also tap into federal grants from TVA and the Department of Energy that are available for such “green energy” programs.  The program could result in a savings of 18.5% on energy bills if the schools implement the upgrades and utilize some of the best practices for energy conservation. The measure is expected to save an estimated $29 million in energy costs for Tennessee schools annually.

The constitutional amendment creating Tennessee’s lottery scholarship program adopted  in 2002 approved the use of excess dollars for three purposes.  The amendment listed K-12 construction as the first purpose, new Pre-Kindergarten classes as the second, and after school programs as the third.  The Energy Efficient Schools program would fall under the K-12 construction provision, which is the only facet of the amendment yet to be enacted, even though it was listed first on the ballot

Open Records bill approved during last week legislation

In an action on open government, the General Assembly voted to approve major legislation opening records in Tennessee during the last week of legislative action.  The bill creates the office of open government counsel to deal with open records issues for local government; requires open records requests to be available within five days or a denial must be sent with explanation; clarifies that violations may be considered in circuit or chancery court; and mandates certain boards and utilities to develop training programs on
open meeting laws.

Senator Randy McNally (R-Oak Ridge), sponsor of the bill, told state senators that the legislation would move Tennessee from being rated the 4th lowest to 10th best in the nation by open government watchdog groups.

Legislation adds expertise and accountability to
Tennessee Veterans Nursing Homes

Another major bill passed during the last days of the legislative session adds expertise and accountability to the Board that oversees the Tennessee Veterans Nursing Homes. The nursing homes have come under increasing state and federal scrutiny following recent allegations of abuse.  The bill, sponsored by Senate Republican Leader Mark Norris
(R-Collierville) restructures the board, consolidates daily management responsibilities in a new executive committee, and provides for heightened accountability between board members and state government.

The Board oversees operations at the state’s veteran’s homes in Humboldt, Murfreesboro and Knoxville.  The homes received scathing reviews from the U.S. Department of
Justice last month.  The Department of Justice concluded that Tennessee is failing to take care of its veterans and that the treatment violates the constitutional and federal rights of the residents.  The report goes on to say that residents are at risk of “significant harm” and threatened to file a federal lawsuit if improvements were made.

The bill requires appointment of two new members with clinical nursing home and administrative experience, and it makes the Commissioner of Finance and Administration a member of the Board. New reporting and legislative review requirements are also enacted.

”The purpose of this bill is threefold,” said Sen. Norris.  “It embraces the need for a more traditional corporate structure with ample professional expertise while maintaining the
current emphasis on a strong veteran presence.  It also redefines the board’s powers and duties in a way that makes it more accountable to the Governor and General Assembly and, most importantly, to Tennessee’s veterans and their families.  Third, by consolidating more responsibility for oversight of the daily operation of the homes in an executive committee, management will be strengthened to allow the board to focus on its broader mission of serving our veterans – our heroes.”

Bill protects children from sex

Legislation, sponsored by Senator Tim Burchett (R-Knoxville), was passed this week to require that driver’s licenses of convicted sex offender be encoded to allow law enforcement to identify them.  Burchett said the action will allow police officers to immediately identify child sex offenders who violate conditions of their lifetime monitoring which prohibits them from visiting areas that children commonly go, like schools and parks.

“Police officers need this information in cases where sex offenders might be in search of their next victim or are in violation of their release,” said Senator Burchett.  “This information could be used to help officers realize that a situation warrants their intervention.”

Burchett said recently a Tennessee convicted sex offender’s vehicle was stopped during a routine search in Nashville and was found with five male children, ranging in age from 12-13 years-old.  The sex offender met one of the boys on MySpace, a popular social networking site.  The five juveniles were in the vehicle with the offender for three hours, and officers discovered that none of them had any relation to the defendant, police records indicate.

“This officer was very alert and intervened to stop a potentially tragic situation,” said Burchett.   “However, every officer may not be this vigilant to investigate such circumstances and this is when an encoded driver’s license would be vital.”

Failure to obtain or carry the identification would be a Class E felony punished by a fine of $350 and 90 days in jail on a first offense, $600 and 180 days imprisonment for a second violation, and $1,100 and up to one year in prison for a third or subsequent offense.

“We must protect children from sex offenders who experts maintain, rarely if ever are rehabilitated,” Burchett continued.  “This bill will be an effective tool to give law enforcement the information they need to protect victims of this crime.”

Self-Directed Care bill takes new approach to long term
care needs

Tennessee’s state lawmakers have voted to establish a pilot program for a “self-directed care program” whereby individual patients have the opportunity to choose services they deem necessary and who provides them.  Consumers would receive a monthly budget based on their need, and could use this money to hire personal assistant services, make home modifications, and other necessary expenses.  The self-directed care program, sponsored by Senate Republican Caucus Chairman Diane Black (R-Gallatin) requires consumers to develop plans that show how they would use the allowance to meet their personal care needs.  It would provide counseling and financial assistance to
help them plan and manage their responsibilities. Consumers who are unable to manage their care themselves may designate a representative, such as a family member, to assist them.

“Tennessee has been last in the nation for too long in the number of healthcare choices for elderly and disabled citizens on Medicaid-supported services, a problem that has kept them from being able to stay in their homes and age with dignity,” said Sen. Black. “I know from speaking with citizens in my district that this is an issue that concerns many of them, and I can sympathize with their lack of options.”

Arkansas, Florida, and New Jersey were the pioneers of the self-directed health care concept.  Since that time, 12 other states have expanded their choices. In Arkansas, there was a 40% reduction in nursing home admissions in the second year of the program, and the total Medicaid cost per person under the self-directed care plan was commensurate with that for the traditional agency model.  Studies reveal that, by every measure, self-directed care is succeeding and that consumers with this option are reporting greater
satisfaction, better quality of life, and fewer unmet needs.

Issues in Brief

Message to Congress / highway fundsSenator Diane Black (R-Gallatin) led to passage this week of a resolution asking Congress to stop the increasingly popular budgetary practice of using earmarks to the Highway Trust Fund. The General Assembly asked Congress to return each state’s fair share of Highway Fund dollars and halt its ongoing efforts to rescind additional funds from the states.

Omnibus Sex Offender bill  — Legislation to bring Tennessee into line with the federal “Adam Walsh Act,” which was signed into law in 2006 was passed in the final legislative day.  The states must comply with provisions of the act by 2009 or risk facing a 10 percent cut to their share of funds in a congressional grant program used to fight crime.  The move would enable the state to receive $7.3 million in these so called “Byrne Grants” used for a wide a variety of crime-fighting purposes.  The sweeping law, named after the murdered 6-year-old son of “America’s Most Wanted” host John Walsh, requires states to adopt strict new standards for registering sex offenders and providing public information about their crimes and whereabouts. It calls on states to publish photos and addresses of sex offenders online and dramatically toughens criminal penalties for those who fail to register, among other provisions.

Asthma — Information on asthma would be studied in order to develop a comprehensive state plan to combat the condition under legislation approved in during the 2008 legislative session.  The bill, sponsored by Senator Diane Black (R-Gallatin) requires the Department of Health to develop a comprehensive state plan to reduce the burden of asthma on Tennessee school children.

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