Capitol Hill Week: Democrat proposal spends more of the state’s savings and adds vast array of new spending measures despite state’s revenue gap

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

 (NASHVILLE, TN), May 20, 2010 –  The Senate Finance Committee and its Budget Subcommittee met this week as members debated several bills that have a financial impact on Tennessee’s state budget.  The Budget Subcommittee was also presented a new plan from Senate Minority Leader Jim Kyle (D-Memphis) which recognizes the fact that the Democrat-proposed tax increases will not pass the Senate Republican majority, but adds pork projects to the bill and cuts the state’s Rainy Day Fund by $142 million to put it at a dangerously low level.

The state’s Rainy Day Fund is Tennessee’s savings account in the event of severe economic hardship.  The proposal to use state savings to provide for a vast array of new spending measures added this week comes after an unprecedented 22 consecutive months of negative collections until this month.  Republican lawmakers on the committee expressed concern about draining the state’s savings account which might be needed in case revenue collections do not meet expectations, the economy takes a turn for the worse, or in the event of a double dip recession.

 “We have worked very hard to ensure we have adequate savings to get us through a severe economic downfall,” said Senator Randy McNally (R-Oak Ridge), Chairman of the Senate Finance Committee.  “It is not the time to stop practicing responsible and conservative fiscal management and go on a spending spree.  We hope that the economy will turn around given the April revenue report; however, if I had a ball team that had lost 22 games and won one, I wouldn’t say we turned it around.  It is a significant gamble to spend more of our savings.” 

“Senate Republicans have put forward a responsible budget that reduces spending and shrinks the footprint of government,” said Lt. Governor Ron Ramsey (R-Blountville).  “Now is not the time to load up the budget with pork projects and new taxes.  Tennesseans want fiscal accountability in state government and that is what we have delivered.”

 “The shortfall we are currently facing is partly due to the administration using the high end of the Funding Board’s estimates regarding how well our revenues will perform,” added Senate Majority Leader Mark Norris (R-Collierville).  “This is a repeat of last year’s performance which also resulted in overestimating our state revenue collections.  The result is we have to circle back and face the same task of making the cuts needed to balance the budget or dip into our savings.  Unfortunately, this year the administration has also asked for tax increases at the worst time possible as Tennesseans struggle to recover from a recession.”

Kyle moved 39 separate requests for additional spending items on the budget bill, which were successfully resisted by Republicans.  The committee will meet again on Monday to continue discussions on the budget.

“Republicans want a reality-based budget that sticks with the four-year plan passed last year to phase in economic recovery through these tough times without raising taxes,” Norris added.  “We will not achieve this by raising taxes or adding more pork projects to the budget.  Hopefully, we can sit down to really work out the differences we face with this budget to achieve a realistic solution that can pass both houses.”

Disaster Relief Update

Four more Tennessee counties have been approved for federal assistance as a result of extreme weather and flooding that struck the state April 30-May 2.  Cannon, Giles, Pickett and Marshall Counties joined the forty-two other counties in the state that were previously approved for individual and public assistance

Residents and business owners in the affected counties can apply for assistance immediately by registering online at or by calling 1-800-621-FEMA (3362).  In addition, Pickett County has been approved in the public assistance category.

The public assistance designation means local governments are eligible to apply for federal assistance for debris removal, emergency protective measures and repairing, restoring or replacing damaged public facilities.  For public assistance projects that are eventually approved, FEMA will pay 75 percent of the cost. The remaining 25 percent is split between the state and local government. 

Individual assistance can include grants to help pay for temporary housing, home repairs and other serious disaster-related expenses. Public assistance is also available to state and eligible local governments and certain private nonprofit organizations on a cost-sharing basis for debris removal and emergency protective measures only at this time. In addition, federal funding is available on a cost-sharing basis for hazard mitigation measures statewide.

Over $100 million in federal assistance has been approved for the survivors of Tennessee’s record-setting storms, with 34,300 people having registered with FEMA for Individual Assistance.  The amount includes $90.7 million in housing aid, such for rental assistance and home repairs, and $9.5 million for other needs such as personal property. 
Nearly $640,000 in loans from the U.S. Small Business Administration have also been approved.
Individuals can register with FEMA online at anytime or by calling 800-621-FEMA (3362) or TTY 800-462-7585. The toll-free numbers are staffed seven days a week, 7 a.m. until 10 p.m. until further notice.

On flood damage to state property, Finance Commissioner Dave Goetz told members of the Senate Finance Committee this week that Tennessee was in pretty good shape.  The state was insured for their losses against a $5 million deductible.  The state is also self-insured with coverage of up to $25 million for property damages.

Repairs to roads are eligible for 100 percent funding under the Federal Highway Emergency Fund. 

The appropriations bill would also transfer $17 million in funds to help the state access critical federal money.  The General Assembly will continue to work on emergency funding, particularly as it applies to helping cash-strapped counties with their share of matching funds, until the 2010 legislative session adjourns.

Resolution aims to prevent wide open U.S. Constitutional Convention by rescinding previous calls on limited matters
The Senate Finance Committee approved a resolution this week to rescind three previous state resolutions calling for a limited U.S. Constitutional Convention.  The action comes after many prestigious constitutional authorities say it is impossible for Congress or state applications to restrict what a Constitutional Convention does or to limit it to just one subject.  In addition, Congress has rejected proposals to establish rules or to limit a Constitutional Convention’s purpose, procedure, agenda, or election of delegates, leaving such decisions open to congressional action. 

“Case law and the prevailing wisdom during the ensuing years focusing on whether states have the power under Article V to hold a limited U.S. Constitutional Convention have opined that this is not the case and that they could be open to other matters despite attempts to limit them,” said Senate Majority Leader Mark Norris (R-Collierville) who sponsored the resolution.   “In light of that, a number of states are reversing their previous calls for a limited convention.  About 12 states have repealed them, and this resolution would count us among them.” 

The Article V provision that authorizes the calling of a Constitutional Convention refers to considering “amendments” (note the plural).  The late Chief Justice Warren Burger, opined “There is no effective way to limit or muzzle the actions of a Constitutional Convention. . . . After a Convention is convened, it will be too late to stop the Convention if we don’t like its agenda.”

Other leading constitutional experts agree that even if Congress called a Constitutional Convention to consider only one issue, the Convention delegates have the authority to ignore that instruction, set their own agenda, and make their own rules.  This leads many to believe the Constitutional Convention process would be a prescription for political chaos, controversy, confrontation, litigation, and judicial activism.
The previous Tennessee resolutions called for limited Constitutional Amendments regarding terms of judges and judiciary, federal appropriations and revenues, and the power of president to veto appropriations.   

Governor vetoes Second Amendment rights bill

Governor Phil Bredesen has vetoed legislation to address any “vagueness” in the state’s new handgun carry law and to allow law-abiding citizens to carry their firearm in establishments that serve alcohol.  The legislation, as passed, allows law-abiding handgun permit holders to “carry” into establishments serving alcohol as long as the owners of the premises have not posted notification that they are banned. 

The bill clarifies language in the law passed last year, particularly as it applies to the posting of notices, and adds penalties for those who consume alcohol while carrying their gun in violation of the statute.  It was designed to address Davidson County Chancellor Claudia Bonnyman’s decision to strike down the law due to ambiguity.  It makes clear what signs qualify as a legal posting so there is no vagueness or ambiguity. The notification must be of appropriate dimensions. 

The bill also prescribes a Class A misdemeanor offense for those convicted of drinking alcohol in violation of the gun carry permit law.  In addition, those convicted of intoxication would be subject to losing their gun carry permit for three years.

The legislation, Senate Bill 3012, upholds the U.S. and Tennessee Constitution’s right to bear arms.  It also follows 13 years of experience with Tennessee’s handgun carry law that shows an outstanding record of safety among permit holders.  Sponsors will likely move to override the governor’s veto next week.

In Brief….

The governor signed a number of bills into law before departing for his economic development trip to China.  Following are some of the new laws that were signed. 

Children / Child Support Orders – Legislation allowing Tennessee to participate in the International Recovery of Child Support and Other Forms of Family Maintenance was signed into law.  The measure, Senate Bill 2818, is sponsored by Senator Mike Faulk (R-Church Hill). The legislation contains procedures for processing child support orders across both state and international borders that are uniform, simple, efficient, and accessible.  Many of these provisions were taken from the experience within the U. S. from enforcing child support orders across state lines.

Sex offenders / Physicians — The governor has signed legislation to require the Board of Medical Examiners to deny the application for licensure or revoke the license of a physician convicted of an offense which requires registration as a violent sexual offender.  The measure, Senate Bill 3362 by Senator Diane Black (R-Gallatin), provides for communications between the Tennessee Bureau of Investigation’s (TBI) Sex Offender Registry and the Board of Medical Examiners within 30 days to assure notification is given.  It also requires the Medical Examiners make sure that no existing physician is currently listed on the Registry.  If a physician is on the Sex Offender Registry, but is not listed as a violent offender, they can still practice as long as there is no patient contact, under the amended bill.  The new law, which takes effect July 1, also gives due process to allow physicians the opportunity to contest a finding by giving evidence to the Board that they were not the person convicted.

False Allegations / Sexual Abuse – A new law that allows the court to hold in contempt any person who makes false allegations of sexual abuse in furtherance of litigation has been signed.  The bill specifies that the court may hold the violator in “contempt” and could order them to pay all litigation expenses and court costs.  The measure, Senate Bill 1264 by Senator Dewayne Bunch (R-Cleveland), will take effect on July 1. 

Meth labs – Legislation designed to protect the public from being harmed by the ill effects of entering a house or building that has been used as a meth lab was signed by the governor.  The measure makes it a Class B misdemeanor offense to knowingly inhabit a property quarantined by law enforcement due to the manufacture of methamphetamine within the structure, unless that person is part of the official police investigation.  The new law, Senate Bill 2969, is sponsored by Senator Diane Black (R-Gallatin) and will go into effect on July 1.

Citizen’s constitutional rights in foreign judgments / Libel Tourism – Another bill signed by the governor is aimed at helping in the fight against a tactic known as “Libel Tourism.”  The practice is used in defamation lawsuits filed against authors critical of individuals with known ties to terrorist organizations like al Qaeda and Hamas. The legislation, Senate Bill 3589 sponsored by Senator Bill Ketron (R-Murfreesboro), ensures that Tennessee Courts have the ability not to recognize a foreign judgment, if that country’s laws protecting free speech and the free press are not as protective as freedoms provided in the constitutions of Tennessee and United States.  The new law, which takes effect on July 1, relates to grounds for non-recognition of foreign defamation judgments, closely resembling similar laws passed by the New York, New Jersey, Illinois, California, Utah and Florida Legislatures on the matter.

College Savings / BEST – The governor has signed a bill approved by the General Assembly that authorizes the Board of Trustees of the Tennessee Baccalaureate Education System Trust (BEST) to establish an incentive plan to encourage citizens to participate in any 529 college savings program that the Board has contracted with to assist in these efforts.  The legislation helps citizens take advantage of the incentive plans, grants and scholarships that could be available to them through individual savings accounts established by or on behalf of residents through BEST.  The new law, Senate Bill 1142, sponsored by Senator Dolores Gresham (R-Somerville) became law upon the governor’s signature.

Hospital assessment – The governor signed legislation designed to help hospitals avoid almost $659 million in cuts proposed in Governor Phil Bredesen’s 2010-2011 budget.   Hospitals have asked the General Assembly to assess a coverage assessment on them in order to raise $230 million.  Money raised would be used to draw down $430 million in federal funds available through a temporary Medicaid match program.  The new law, Senate Bill 3528 sponsored by Senator Doug Overbey (R-Maryville), was effective upon being signed. 

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