The following is a wrap up of the final days of the 105th General Assembly. After a record 2007 surplus, 2008 presented a much different tone among legislators as tax revenues were less than expected. Last year many of us battled to maintain controls on spending, yet our state government grew dramatically in size with commitments to new programs. In a year of low tax revenues, it caused legislators and the administration to have a much more disciplined and conservative approach to our budget process. The last two years have proven that we must continue the fight to keep our taxes low, hold the reigns on spending and return over collections back to the citizens of Tennessee. Otherwise, if tax revenues are more than expected, politicians will find a way to spend it. I hope the following information is helpful in updating you on this year’s actions by your Tennessee General Assembly. I am proud to represent you and hope you will feel free to call on me if I can ever be of service.

2008-2009 Budget ‘fiscally responsible’

The 2008-2009 budget, House Bill 4219, is lauded as a fiscally responsible one in which reasonable cuts in growth were made. The total budget, which includes federal dollars, for 2008-2009 is $27.5 billion, $245 million less than originally proposed in January. The 2007-2008 total budget was $27.75 billion, $250 million more than this year’s. The state portion of this year’s budget was $13.6 billion, a $200 million decrease from 2007-2008.

State Employees
Roughly 2,011 jobs—approximately 5 percent of all state employees—will be eliminated in the executive branch through voluntary buy-outs, which is anticipated to have a price tag of approximately $50 million. The one-time money will be taken from departmental reserve accounts, and will save the state about $64 million annually. The Governor has added approximately 5,000 jobs in his tenure, meaning the cuts make up 42 percent of Bredesen hires.

The Administration believes it will have to offer about 8,000 to 12,000 workers the buyout in order to reach the 2,011 it needs. If not enough employees are willing to participate, layoffs will begin in January 2009.

Although a 2 percent pay raise for state employees was taken off the table when budget numbers were lower than expected, state employees will continue to receive their monthly match of $50 on 401(k) plans. In addition, some state employees and higher education workers will receive a one-time $400 cash bonus.

Education
This year’s budget protects education, and continues to fund the Basic Education Program, the plan by which the state disperses dollars to local school systems, at last year’s same percentage of funding. Although there is no increase in the state’s percentage of BEP funds as was anticipated for this year, there is a required increase of $59 million to cover inflationary costs for the school systems.

For higher education, however, the state made a cut of roughly 4.1 percent, or about $56 million. The Tennessee Higher Education Commission is expected to work with the two systems, the Tennessee Board of Regents and University of Tennessee system, to distribute the cuts.

105th General Assembly expands access to lottery scholarship program

One of the most contentious and complicated issues of the year, sweeping lottery scholarship legislation or House Bill 653, was passed into law the last day of session. The final proposal is slated to give 12,107 additional students the opportunity to participate in the HOPE scholarship program. The legislation will allow a student to maintain the HOPE scholarship by keeping a grade point average (GPA) of 2.75 for 60 hours of classes. At the conclusion of 60 hours, in order to continue to receive the HOPE scholarship, the student must achieve a 3.0 GPA for the next semester or 12 hours and for the remainder of the student’s college career. The GPA is no longer based on a cumulative score, but only based on semester averages. The new legislation also provides a one-time regain provision.

The legislation also provides for the following:

• $10 million to the Tennessee Student Assistance Corporation (TSAC) for the purpose of awarding need-based grants, impacting 5,000 students;
• The “Helping Heroes” program, which is projected to assist approximately 375 students at $1.5 million over two years;
• A pilot project to provide students enrolled in dual enrollment courses with laptops, to benefit 100 students in each grand division;
• A full HOPE scholarship to two-year institutions with on-campus housing;
• Allowing students to maintain the HOPE scholarship for a full five years;
• Additional funds that become available will fund the Energy Efficient Schools program at $100 million

 

"Competitive Cable and Video Services Act" to bring cable competition to Tennessee

This year marked the passage of the “Competitive Cable and Video Services Act,” a change in the law that aims to increase cable competition in Tennessee.  The changes will expand competition, jobs, choice for consumers, and investment in Tennessee with broadband infrastructure.

Under House Bill 1421 (now Public Chapter 932) new cable competitors can obtain a 10 year franchise certificate from the Tennessee Regulatory Authority (TRA) beginning July 1. Existing providers would continue to pay local franchise fees directly to local government. New competitors operating under a state franchise would also pay for access permits to right of ways for cable lines. In addition, the bill requires service providers to continue allowing access to PEG channels (public, education, and government programming).

With regards to consumer protection, the bill specifically prohibits discrimination based on income or race with strong penalties against violations. Similarly, existing cable companies would be required to continue to serve unprofitable areas. New providers must demonstrate at the end of 3.5 years that 25 percent of the households with access to the service are low income. All providers must meet FCC mandated customer service standards and the TRA can require credits if a provider does not remedy service complaints.
Helping seniors “age in place”

This year marked the passage of House Bill 4144, a multi-pronged effort that will overhaul Tennessee’s long term care services.

The “Long Term Care Community Choices Act of 2008” is designed to promote independence, choice, dignity, and quality of life for the elderly and/or people with physical disabilities who need long-term care support and services from the state’s TennCare program. The legislation will include consumer-directed options that offer more choices regarding the kinds of long-term care services people need, where they are provided, and who will deliver them, with appropriate mechanisms to ensure accountability for taxpayer funds. Currently, 98 percent of all long term care dollars go to nursing home care, the most expensive option. Lawmakers are optimistic that this legislation will redirect the funds in a more efficient manner.

Lawmakers heard from Finance Commissioner Dave Goetz this week, who detailed for House members the proposed reductions to planned growth that will balance this year’s budget. The State Funding Board’s economists have said the state is expected to receive $468 million less than originally projected—while adding that it could grow to as much as $580 million. The Administration has suggested several different components to address the shortfall, including the elimination of state government jobs, adjustments to the education portion of the budget, and nixing plans to implement a comprehensive DUI package.

State Employees
The Administration is proposing that just over 2,000 state jobs in the executive branch of government be eliminated with an early retirement incentive, a move that is anticipated to provide approximately $64 million of the $468 million in cuts needed. Commissioner Goetz said the administration was optimistic that much of the reduction could be done on a voluntary basis.

Education
Last year the General Assembly approved an overhaul of the state’s Basic Education Plan (BEP), the formula by which the state distributes dollars to local school systems, expecting to phase in the funding changes over three years. The General Assembly phased in the first 50 percent of the increase last year, expecting to dial in 75 percent this year.

Because of the revenue shortfall, it is likely that only the natural growth component of the BEP will be fulfilled, amounting to approximately $69 million. Approximately $55 million in growth for higher education is off the table, and plans to discuss an additional $25 million for pre-kindergarten classrooms have been scrapped.

The budget shortfall will dominate our last days of the legislative session.  I find it ironic that within a year after having a 1.5 billion dollar surplus, we are facing such a dire situation.  While many of us called for spending constraints last year, we were unable to stop the large increase in the growth of our state government.  Because we were unable to hold the spending under control, we are now looking at job cuts and a massive budget shortfall.  After we had just gotten our state out of a financial crisis that almost gave us and income tax, it appears we may be back where were in 2002. 

House Bill 4066, which aims to increase the number of businesses eligible for group health cooperatives, passed the House this week unanimously. Currently, the Tennessee Small Employer Group Health Coverage Reform Act allows businesses to “pool together” to negotiate and offer health insurance through a larger group.

House Bill 4066 stipulates that a health group cooperative must contain at least 1,000 eligible employees or have at least 10 participating employers. In addition, the group must establish requirements for membership. Although participation is voluntary, an employer must commit to purchasing the coverage through the cooperative for at least five years, ensuring pool stability. Additionally, no health group cooperative may exclude a small employer that otherwise meets the requirements for membership on the basis of a health-status related factor.

I am happy to see this legislation pass. I had proposed this idea back in 2003 and was told it wouldn’t work and couldn’t be done. After five years, the legislature has finally decided is deserves a chance.

• DUI bill sees passage in House – House Bill 43, one of the many DUI bills considered in the General Assembly this year, passed the House this week with a vote of 96-1. Present law requires DUI offenders who are less than 21 years old to serve at least 48 hours in jail. The minimum period of incarceration for DUI offenders who are 21 years of age or older is 24 hours. The legislation would require all DUI offenders, regardless of age, to serve at least 48 hours in jail.

• Castle Doctrine expanded – An expansion to last year’s “Castle Doctrine,” House Bill 3509, was passed unanimously by the House this week. Recently the General Assembly passed a law that allows the use of deadly force in defending oneself against an imminent threat of harm while in one's own home or vehicle.  The bill passed this week expands the law to allow someone to use deadly force to defend oneself in his/her own business. I am a co-sponsor on this bill and will be pleased to see it become law.

*You may have noticed new guard railing along River Road. This has been a safety concern of mine for years. In working with TDOT we have encountered many difficulties in determining how to anchor a railing into the step bank along the side of the road. I appreciate the commitment of the officials at TDOT in continuing to work for a solution to our problem. In spite of the tight budget year, a long section of new guard railing will now make traveling on River Road a much safer experience. *I am presently moving a Private Act through the legislature for Ashland City to make requested changes to their government charter. *I appreciate the Cheatham County Commission passing the resolution to name the Sycamore Creek Bridge in honor of the late Jimmy Maxey. While I did not know Mr. Maxey personally, I have had the privilege of working with his son Judge Phillip Maxey on the Cheatham County Foster Care Review Board for over 2 years. Everything I have come to know about the Maxey family has been of the utmost character and integrity. Having moved the resolution through committee I will pass it in the full House on Tuesday.

• House Bill 3064 requires local governments and law enforcement to cooperate with federal officials on immigration status of any person in the state and prohibits local governments from enacting sanctuary policies toward immigrants. (Budget Subcommittee)

• House Bill 0957 requires resident sexual offenders and violent sexual offenders to obtain and carry driver license or photo identification card and requires department of safety to design such license or card in manner that allows law enforcement officers to ascertain the person is a sexual offender. (Budget Subcommittee)

• House Bill 3661 creates within the TBI a “Repeat DUI Offender” registry of persons who have two or more DUI convictions and whose license is currently suspended or revoked. (Budget Subcommittee)

• House Bill 1872 enacts the virtual public schools act to provide certain educational resources and opportunities to students via the Internet in a virtual or remote setting. (Budget Subcommittee)

Rep. Johnson serves the 78th District of the Tennessee General Assembly, which includes Cheatham, Williamson and Montgomery Counties.

www.phillipjohnsontn.com