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Senator Paul Stanley
State Senate
State of Tennessee
Plans to close 105th General
Assembly
put on hold as budget questions still
remain
Contact: Darlene Schlicher
(615) 741-6336 or email:
darlene.schlicher@legislature.state.tn.us
(NASHVILLE, TN,
May 16, 2008) -- Plans to close the 105th General Assembly
were put on hold this week, as lawmakers continued to explore answers about
the newly proposed budget regarding the state employee layoff and buyout
plan. Action on several other
key issues also remains to be resolved, including the proposed lottery
scholarship distribution plan, a major open records bill, and legislation to
reform the board that operates Tennessee’s Veteran
Nursing Homes.
Meanwhile, the Senate passed Governor Bredesen’s
“technical corrections bill” without the administration’s provision calling
for taxing family-owned, non-corporate entities, known as FONCEs.
The governor had proposed removing the franchise and excise tax
exemption on FONCEs, which are certain limited liability corporations and
limited partnerships that derive passive income through commercial property.
The provision, which would have raised $15 million, was
removed by the legislature due to concerns about the impact it would have on
more than 8,000 family-owned businesses.
Funds collected for land conservation purchases could
be used to bridge the gap left by removal of the FONCEs provision.
Some of the revenues collected by Tennessee on real estate
transactions go into several land acquisition funds, including those to
purchase wetlands. Currently
$18 million of the $30 million available from collection of the tax is
available on a recurring basis.
Many legislators feel that a portion of these funds could be used during the
economic downturn, as the state has been aggressively purchasing land over
the past several years for conservation purposes.
The governor had already reverted $12 million of the
$30 million realty transfer tax to the general fund.
The 40-cent per pack tobacco tax increase, passed last year, that was
purportedly to go for improvements to Tennessee’s K-12 schools,
has also been placed in the state’s general fund.
The tax was passed last year during a period of record high revenues,
but it has not met projections and returns are continuing to diminish.
The proposed budget must have $468 million in cuts from
the governor’s original appropriations bill in order to meet the state’s
constitutional mandate for a balanced budget.
It must also include a $314 million downward revision of state
revenues for the current budget.
The proposal to cut state employees by offering
voluntary buyouts would net the state an estimated $64 million to help fill
that gap. However, the governor
says that if the buyouts are unsuccessful, he will have to cut state
employees to reach the elimination of the 2,000 state jobs needed to realize
the savings. The lack of
details about the buyout and how the governor would proceed to cut the
positions has concerned many lawmakers about such items, like the monetary
benefit of the buyout for the employee, how health insurance coverage might
be extended and any other assistance that might be offered.
The administration is expected to provide more information when the
General Assembly returns for their final legislative week.
Judicial
Selection Commission
Legislation that would continue the current Judicial Selection Commission
stalled this week in the Government Operations Committee, an action that
would put the commission in wind down next year.
The sponsor of legislation to continue the Commission for another
year then announced his intentions to bring the matter to a vote on the
Senate floor. At a minimum,
Senate Republicans want to see a change in the way the commission functions,
allowing more input from groups seeking membership on the commission.
Senator Paul Stanley (R-Germantown), stated, “the Lt. Governor put forth
a reasonable proposal that was rejected by special interest lobby and the
House Democratic leadership. We
were hoping reason would prevail and are disappointed at the results”.
Currently members of the commission are selected from a list of
special interest groups as prescribed by law.
Republicans believe there are important Constitutional issues which
need to be addressed and that reform is needed to have a more fair
and open process with greater
accountability. They also
believe that the Commission, which has not been reviewed in the sunset
process, should go through the full and normal review process to ensure
appropriate legislative oversight of the agency.
Lottery plan offers scholarships to over
13,000 more students
Over 13,000 more students would receive lottery
scholarship funds under legislation sponsored by
Senate Education Chairman
Jamie Woodson (R-Knoxville) and considered by the
Senate this week. The bill
would extend the 2.75 GPA requirement for students to maintain the HOPE
Scholarship through the end of their junior year.
It also provides scholarship opportunities to non-traditional
students, military veterans, military dependents, those who are dually
enrolled in college and high school, students seeking medical degrees who
agree to serve rural areas, and foster children.
The State Senate also adopted legislation to use a
portion of the excess funds to set up an “Energy Efficient Schools Program”
aimed at helping schools save money on their energy bills.
Senator
Randy McNally (R-Oak Ridge),
sponsor of the measure, said the bill is especially needed to help bolster
capital needs of local K-12 schools this year due to the administration’s
cuts in the Basic Education Program 2.0 (BEP) improvements that were slated
for distribution.
“We will have no money to fund the BEP 2.0 improvements
under the governor’s revised budget,” said McNally, who is the Senate
Finance Committee Chairman.
“This money will provide funding to schools across
Tennessee.
It will be done in a manner that will produce cost savings in the
future that will be realized by schools for years to come.”
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 available for such “green energy” programs.
The program could result in a net 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.
Currently, 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.
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.
On the lottery scholarship distribution plan, the bill
sets aside $349.5 million to create an interest bearing endowment fund,
which together with the $11.4 million will fund all the proposals in the
bill, including one for TSAA need-based grants.
TSAA is Tennessee’s
primary need-based student assistance program.
Almost all of these students, or 90 percent, have family incomes
below $30,000. The endowment
fund would provide $10 million to issue these grants.
The bill would provide over 3,000 more students with scholarship
opportunities, more than any other plan submitted to date.
This is in addition to the 950,000 K-12 students that would benefit
from the Energy Efficient Schools Program.
“I am very
pleased that we have been able to put together a fiscally responsible
package that will help over 13,000 students receive scholarship money,” said
Woodson. “It by far impacts the
most students with the dollars that we have available to us.”
Some of the other highlights of the plan include:
·
continues funding of $25 million for Pre-K
·
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
·
removes home school requirement of two years
·
allows dependents of religious workers who
are from the state but who are temporarily overseas to claim Tennessee for scholarship purposes
·
gives students attending two-year
institutions with housing the four-year award
·
provides Civic Education Scholarships for
exemplary students
·
establishes a Laptop Pilot Program to help
students access more online course opportunities
The Senate sent the lottery scholarship distribution
plan back to the Senate Finance Committee due to a rule regarding the
financial impact of a rural healthcare scholarship amendment added to the
bill. That amendment, sponsored
by Senator Jim Tracy
(R-Shelbyville), would set up an endowment to fund scholarships for students
pursuing a medical degree and who agree to practice in rural areas of Tennessee.
If approved again by the Finance Committee as amended, the
legislation would go back for final approval by the Senate next week.
Issues in Brief
DUI Registry -- The full
Senate approved legislation to create a registry of persons who have two or
more DUI convictions with the Tennessee Bureau of Investigation, similar to
that of the Sex Offender Registry.
The bill is sponsored by
Senator Tim Burchett (R-Knoxville).
Burchett said the Registry would serve as a strong deterrent to
driving under the influence and would make drunk drivers think about the
consequences of their actions.
In 2006, there were 1,287 fatalities on Tennessee roads with 509
due to alcohol-related crashes.
Motor vehicle crashes are the leading cause of death among persons between
the ages of 3 and 33, with 50% of the victims killed in alcohol-related
crashes.
Verified voter paper trail
– The State Senate passed
legislation that would use federal funds to replace voting machines with
voter-verified paper trails and a system to strengthen random auditing. The
legislation would use the Help America Vote Act (HAVA) funds to ensure a way
that the machines could be checked to verify that votes are cast correctly,
detect possible election fraud or malfunction, and provide a means to audit
the stored electronic results. Only two of Tennessee’s 95 counties
keep paper trails of ballots. Most counties use a direct recording
electronic touch screen voting machine that does not allow for a paper
record that can be audited or recounted in cases of suspected fraud.
Homelessness -- The problem
of chronic homelessness was the subject of a resolution sponsored by
Senator Tim Burchett
(R-Knoxville), and approved by the State Senate this week.
The resolution calls for the Department of Mental Health and
Developmental Disabilities to devise a ten-year plan to eliminate chronic
homelessness in Tennessee.
The most recent estimates on the number of homeless individuals,
released by the United States Department of Housing and Urban Development,
state showed there were 9,560 homeless individuals in Tennessee.
Of that number, 2,338 were classified as chronically homeless, a
state which is defined by being homeless for twelve out of the past
thirty-six months. Memphis, Nashville, Knoxville, and
Chattanooga
have each devised and implemented their own ten-year plans to erase
homelessness. The resolution
maintains that the state should adopt the same forward-thinking approach to
addressing this widespread problem.
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