New Budget Plan is unveiled

Capitol Hill Week

Contact:  Darlene Schlicher (615) 741-6336 or email:
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New Budget Plan is unveiled

(NASHVILLE, TN), May 28, 2009 –  On Capitol Hill this week, the Bredesen administration presented lawmakers with a preview of its new budget amendment, which is expected to be filed on Friday.  A preliminary overview of the plan shows that the proposal acknowledges $111.7 million less in revenues from the revision presented earlier this year for the current fiscal year and $161 million less than the 2009-2010 budget year which will go into effect on July 1.

The new budget amendment comes after the State Funding Board adjusted downward its previous estimates for total state taxes over the next 14 months, due to a more dramatic decline in revenue collections than previously anticipated.  State Finance Commissioner Dave Goetz told members of the Senate Finance Committee in a briefing that the budget amendment was revised based on the most optimistic end of the new range estimated by the Funding Board.

The reduction in revenue is needed to balance the state’s budget despite the influx of over $5 billion in federal stimulus funds over the next
two years.  Most of those funds are required to be spent for specific purposes like energy-saving initiatives, road construction and education, with only a small portion available to help economically distressed states meet their budget needs.  Other stimulus funds have strings attached which require some states to spend additional money to access available stimulus dollars.  The stimulus funds will dry up by 2011, making next year’s state budget even more challenging to meet recurring state government expenses.

The administration’s amendment includes abolishing 717 filled state government positions and 676 vacant jobs.  It also includes raising funds to fill the budget gap, with the most significant increase coming from allowing the Department of Revenue to assume collection of the business gross receipts tax now being collected by the counties.  The plan is expected to generate $21 million to the state and $25 million to local governments.  The new Bredesen amendment also proposes placing a sales tax on cable boxes, raising the long distance tax on businesses from 7.2 percent to 9.25 percent and making software maintenance and warranty agreements signed outside of Tennessee applicable to the sales tax.  Those three proposals would raise $2 million, $6 million and $9 million, respectively.

The reduction in state employees would save the state an estimated $30 million.  State employees cut under the plan would be offered a severance package that includes tuition assistance of up to $5,400 per year and a cash payment.  Goetz told committee members the affected employees could apply for assistance to help offset the costs of continuing their health insurance benefits through COBRA.

The new budget plan reflects a significant increase in the amount of money Tennessee will receive from the federal America Recovery and
Reinvestment Act (ARRA) in unemployment assistance.  The state unemployment rate increased in April to 9.9 percent.  The rate is the highest it has been in 25 years and almost four points higher than this time last year.  This qualifies Tennessee for the highest category of enhanced matching stimulus funds under the ARRA Act.  The funds are expected to free up $16 million in the fourth quarter of the current budget year and $59.5 million state dollars that will no longer be necessary to draw down stimulus funds next year.

Other highlights of the plan include spending $162 million in Rainy Day Funds to bridge the gap in the current budget year and $42 million in the 2009-10 budget year.  Approximately $127 million in TennCare Reserves would also be used to plug the hole in the current fiscal year and $6 million next year.

The budget is typically among the last bills passed by the legislature before adjournment.  The General Assembly will carefully review
language in the amendment in the Senate Finance Committee next week and make any needed changes before the bill goes to the full body for final consideration.

Senate approves new method for
selecting the state’s appellate and Supreme Court Judges

The State Senate has approved legislation that provides a new method for selecting the state’s appellate and Supreme Court Judges after a
spirited debate on the matter this legislative session.  The action comes as the Judicial Selection Commission, a component of Tennessee’s current plan for appointing judges, is set to expire next month.  Under that plan, called the Tennessee Plan, the commission that nominates judges is selected from lists submitted by various legal organizations to the Speakers of the House and Senate and governor.

The bill, SB 1573 sponsored by Senator Jamie Woodson (R-Knoxville) and Majority Leader Mark Norris (R-Collierville), sets up a new Nominating Commission with fewer attorney members and special interest input.  Norris said he will continue to pursue a separate measure that would call for a Constitutional Convention to let the people decide whether or not they want to elect popularly the judges or opt to continue a system of nomination by a commission, followed by a retention vote from voters.

Tennessee’s Constitution says judges must be “elected by the qualified voters of the state.”  The debate in the legislature has focused on
whether or not the selection process with a retention vote meets that test.

“This legislation gets us from where we are to where we need to be for proper administration of justice,” said Norris.   “It represents an
amalgamation or compromise of ideas.”

The legislation provides for a 17-member Judicial Nominating Commission that would have at least 10 attorney members.  After being appointed through this process, the judges would stand for approval by the voters who could decide whether or not to “retain” or “replace” them.  Currently, citizens vote “yes” or “no” on the ballot regarding the retention of judges.

If voters decide to replace a judge, an interim judge would be appointed by the governor until the next election.  At that point, the people
could decide who would fill the slot through a popular election, which is the same process by which the state’s trial judges are currently selected.

The bill also bans lobbyists or employers of lobbyists from serving on the Nominating Commission.  Finally, the legislation provides public
access to every aspect of the nominating process.

“Good Samaritan” legislation calling
for witnesses to
report a violent crime against a child meets Senate

The Senate has approved legislation to require a witness to report a crime against a child under the age of 13 where serious bodily harm or death concurs from a sexual assault.

The bill, SB 520 sponsored by Senator Randy McNally (R-Oak Ridge), comes after several cases of unreported violent crime nationwide, with the most famous being one in Nevada where  Jeremy Strohmeyer followed a seven-year old girl to a Las Vegas building.   Strohmeyer played hide and seek with the girl, eventually following her into the restroom where he sexually assaulted and murdered her.  Strohmeyer’s friend, David Cash, saw the man pursue the girl and even followed them into the restroom where he saw the girl struggle.

Cash, who failed to report the crime to anyone, was not charged by authorities since he did not take any affirmative action to cover up the crime. He later made public statements indicating he felt no remorse for failure to report the crime and, in fact, bragged about his notoriety in the case.

This bill would make it a Class B misdemeanor for persons not to report this serious crime involving a child to law enforcement authorities if they witness such an act that results in serious bodily injury.   If the child dies, it would be a Class A misdemeanor.

In other action this week, the State Senate gave final approval to a bill to allow videotaped interviews of abused children conducted by a forensic interviewer to be admissible in court.  Currently any time a charge of child sexual abuse comes up, the child is brought to a Child Advocacy Center to be interviewed on videotape by a forensic interviewer, a licensed professional who is trained to interview children regarding the alleged abuse.  This bill defines forensic interviewer and the circumstances upon which those tapes would be admissible in a court of law.  The bill, SB 312, is sponsored by Senator Diane Black (R-Gallatin).

Bill aims to prevent “Sanctuary
Cities” for illegal aliens in Tennessee

The Senate State and Local Government Committee approved a bill this week aimed at preventing any city in Tennessee from becoming a “sanctuary city” for illegal aliens.  A “sanctuary city” is a term given to a city in the United States that follows certain practices to protect illegal aliens. Thirty-eight cities in the U.S. have been recognized as sanctuary cities, but many sources have identified over 200 city or county governments nationwide as having practiced such policies.

The measure, SB 1310 sponsored by Senator Jim Tracy (R-Shelbyville), prohibits local governments, or the head of such localities, from passing any ordinances or policies that allows for a sanctuary city to be located in Tennessee.   The bill is designed to be a pre-emptive strike to guard against the adoptions of any policies to protect those who are in the United States illegally.

“This legislation will prevent any city from even considering becoming a sanctuary city,” said Senator Tracy.  “There is a high cost to
illegal immigration for our cities, counties and state.”

House approves bill to give
Republicans majority on State Election Commission

Republicans won a significant victory this week with passage of legislation in the House of Representatives that honors Tennessee’s current law to give the majority party in the Tennessee General Assembly a one vote edge on the State Election Commission.  The action comes as a result of the November elections when Republicans took control of both houses of the State Legislature.

“The Democrat majority put the state law into place and had no problem abiding by it until Republicans took control,” said Senate Majority
Leader Mark Norris (R-Collierville), who is the sponsor of the legislation.  “They wanted to maintain their control despite the fact that it is clearly in violation of state law and does not recognize the fact that the people of Tennessee voted for new representation in our State Legislature.”

The bill, which has already been approved in the Senate, temporarily adds two Republicans to the State Election Commission to provide a
four to three Republican majority. The Commission currently has a three to two Democratic majority.  The bill contains a provision to automatically give the majority party the one-vote advantage if the power shifts in the future.   Current Tennessee law also provides that the majority party shall have control of all 95 election commissions at the county level.

House Democrats had threatened to bottle up the bill in House committees where there is an even number of Democrats and Republicans.
Legislation must receive a majority vote to advance to the floor of the House, where it was approved today along party lines.  Norris had declared that, if House Democrats continued to hold up approval of the bill, Senate Republicans would not vote to continue the existence of the Election Commission, which was up for sunset review.

“This was a simple matter which should have been taken care of months ago in accordance with state law,” Norris continued.  “I am pleased that it has passed the House and expect the Senate to take it up for adoption of a House amendment next week.  Hopefully, the two new members can be seated on the Election Commission before we adjourn our 2009 legislative session.”

Bills in Brief

Auto Consumers / Dealers — The full Senate has approved legislation to help ensure that monies paid or obligations owed are fulfilled in the event of a manufacturer bankruptcy. The legislation, SB 516, works to help ensure there are uninterrupted warranty repairs or
maintenance for Tennessee consumers in the event of a manufacturer bankruptcy.  It also protects consumer rights under the Tennessee Lemon Law and ensures obligations owed to dealers for customer rebates, employee buy-out vouchers, and warranty repair payments are paid.

Family law / soldiers  — A bill that would allow military personnel who have child visitation rights under a divorce decree to transfer those rights to a relative when he or she is sent overseas cleared the Senate Judiciary Committee this week this week.   The bill, SB 1267 sponsored by Senator Dewayne Bunch (R-Cleveland), authorizes a court to grant a parent’s petition to assign visitation rights to a relative if the court finds that the visitation would be in the child’s best interests.

Preferred Provider Organization Transparency Act — The Senate Finance and Commerce Committee has approved legislation this week named the “Preferred Provider Organization Transparency Act.”  The bill makes sure that health care providers who contract with health insurance plans have full knowledge of any assignment of their contract to entities associated with the insurance company with whom they would be paid.  Under the bill, SB 693, sponsored by Senator Steve Southerland (R-Morristown), the third party would be required to inform the contracting health care provider of a Web site on which they may get information about any changes in the health plan status.  This includes to whom the third party has granted access to the provider’s health care services and contractual discounts.  The bill will also help doctors know to whom they can address any problems.

Ethics / Government Contracts – The State and Local Government Committee has approved an ethics bill this week which would make sure officials negotiating contracts are not receiving employment with that firm as a “payback.”   The legislation, SB 1505 sponsored by Senator Tim Burchett (R-Knoxville), prohibits members of the General Assembly, state constitutional officers, the Governor, or officials in the executive branch of government who have negotiated with a vendor on the state’s behalf on a contract valued at $5 million or more
from seeking employment with that vendor for a year upon leaving state employment.


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