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January
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Update from the Hill
August
13, 2010
Election Highlights
In
the hotly contested Republican primary for Governor,
Knoxville Mayor Bill Haslam bested the other Republican
contenders, including Congressman Zach Wamp, Lt. Gov.
Ron Ramsey, Joe Kirkpatrick AND Basil Marceaux.
In
the November election, Haslam will face Democrat Mike
McWherter, who was un-contested in his primary.
A
very divisive Republican primary for the United States
House District 6, vacated by retiring Congressman Bart
Gordon, saw Senator Diane Black narrowly defeat fellow
Senator Jim Tracy and Murfreesboro businesswoman Lou Ann
Zelnick for the right to go up against Democrat Brett
Carter in the November election. If Black is
successful, she will leave her seat in the Tennessee
Senate, and there will be a special election at some
point. Sen. Tracy is in the middle of his current term,
so he remains a State Senator.
After an equally bitter and very expensive primary race
for the Republican nomination for U.S. House District 8,
where Congressman John Tanner is retiring, Republican
Steven Fincher will be pitted against State Senator Roy
Herron, the Democratic nominee. Fincher beat out two
Republican opponents for the right to face Herron in
November. According to national news reports, this has
thus far been the most expensive Congressional race in
the country in this election cycle. Ironically, the
Republican candidate who spent the most money, George
Flinn, came in a distant third in the primary.
The
most bitterly fought primary race for the Tennessee
Senate was between Senator Mae Beavers, the incumbent,
and Representative Susan Lynn. Senator Beavers easily
held onto her seat and will face Democrat George
McDonald for the 17th district Senate seat.
Rep. Lynn’s House seat, in District 57, is one of the
open House seats now up for grabs in November.
In
Nashville, a closely watched Democratic primary resulted
in Representative Mary Pruitt holding onto her seat
after a pretty close fight with challenger Steven Turner
for the House seat of the 58th district.
However, the most closely watched primary in Nashville
was the race between Democratic incumbent Senator
Douglas Henry and his primary opponent, local attorney
Jeff Yarbro. This race has only been called recently,
and the current vote difference is less than the number
of fingers and toes it takes to count them! A recount
is not certain but is a distinct possibility.
In
Knoxville, the Tennessee Senate seat given up by newly
elected Knox County Mayor Tim Burchett saw House member
Stacey Campfield beating out two other Republicans for
the nomination in Senate District 7. He will face
Democrat Randy Walker in November.
In
Senate District 8, Representative Mike Bell handily won
the Republican nomination over former Senator Lou Patten
for the seat being vacated by Dewayne Bunch.
In
Jackson, former State Senator Don McLeary, who was
elected as a Democrat and then became a Republican, will
try to reclaim his old seat in a face-off against
incumbent Democratic Senator Lowe Finney for Senate
District 27. Finney beat McLeary for the seat in 2006.
In
Upper East Tennessee’s House District 3, the Republican
nomination for the seat held by retiring Representative
Jason Mumpower went to Scotty Campbell, a former staff
assistant to Speaker Kent Williams. Scotty beat out a
team of three other nominees, including Timothy Hill,
the brother of Rep. Matthew Hill (District 7) and is
expected to win in November.
Two
House incumbents lost in their Republican primaries.
Representative Eric Swafford was handily beaten by
Cameron Sexton for the House District 25 seat.
Representative Chad Faulkner lost a close race to Dennis
Powers for the House District 36 seat. Both face
Democratic opponents in November.
Several close primary races surprised many observers,
and you can expect more fireworks and surprises in
November!
State Revenues Update
The Department of Finance
and Administration reported that this week that the
state’s sales tax revenue for July jumped with the
largest monthly growth in over three years. On an
accrual basis, July was the 12th month of the
year and year to date revenue collections are
under-collected by $226 million.
Year-to-date collections
for all revenues for the past twelve months were $203.0
million less than the budgeted estimate. The general
fund was under collected by $151.3 million and the four
other funds were under collected by a total of $51.7
million. These estimates are subject to final accrual
adjustments.
Commissioner Dave Goetz
says, “We believe the growth in both sales and corporate
tax collections point to an economic recovery in
Tennessee; however, we will continue to be cautious,
keeping our budget in balance as we move forward.”
Personnel Matters
Deputy to the Governor
John Morgan has been appointed Chancellor of the
Tennessee Board of Regents effective October 1st.
A change in the law which removed the current
requirement for an advanced degree paved the way for
John’s application to be given serious consideration.
Governor Bredesen has
announced that Department of Transportation Commissioner
Gerald Nicely will become Deputy to the Governor.
TennCare update
At a hearing before the
legislature’s Fiscal Review Committee this week, Darin
Gordon, the Bureau of TennCare Director confirmed that
he had filed for enhanced matching dollars for the
state’s current certified public expenditures. This
“windfall” is expected to be between $75,000,000 and
$100,000,000. Director Gordon was called before the
committee to explain why he had not applied for the
funds earlier, and he explained that there had been
substantial confusion within the federal agency
regarding requirements. He also confirmed the
application was received before the cutoff and expected
to be approved.
June
10, 2010
The
106th General Assembly began chaotically and
ended in similar fashion at 1:15 a.m. this morning. In
January, the surprise election of Speaker Kent Williams
created turmoil among House Democratic and Republican
leaders and a 50/50 split on all committee assignments.
That same turmoil was reflected in the closing hours,
days, and weeks as the 106th General Assembly
dragged on much longer than expected.
In
the end, the will of the Senate largely prevailed in the
passage of the appropriations bill, the omnibus bill and
the annual technical corrections bill, although Senate
Republicans were forced to reinstate some funding
originally targeted for elimination in the budget.
Thanks to its broad caption, the omnibus bill was the
most controversial bill last night, serving as a
“Christmas tree” for amendments by House members, who
were frustrated about various pieces of legislation that
had passed the House but stalled in the Senate.
Feelings were also running high because of the ongoing
controversy around HB2622, the “Health Care Freedom Act”
by Rep. Susan Lynn, which ultimately remained on the
House Desk because 50 votes (a constitutional majority)
were not present to adopt a conference committee report.
After hours of deliberation, the House recalled the
heavily amended omnibus bill, removed all extra
amendments and re-passed the bill in a form acceptable
to the Senate Republican leadership. The House then went
through the same process by removing two amendments to
the technical corrections bill that had not been
approved by the Senate. This action led the way to
final adjournment in the wee hours.
Having passed the appropriations bill last week, the
passage of the omnibus and technical corrections
legislation paved the way for a sine die adjournment to
a tumultuous session. Re-election is foremost on most
members’ minds, and the campaigning will begin in
earnest today.
Your
team from Smith Harris & Carr was on the scene until the
bitter end, and we are pleased to provide any additional
information about specific legislation that you may
require. Please do not hesitate to call us.
Our
offices will be closed tomorrow to give the staff some
much needed rest after many long nights, but we can
always be reached by email or cell phone.
Thank you for the confidence you show in us by allowing
us to represent your interests on Tennessee’s Capitol
Hill.
June
4, 2010
Approximately five weeks after the expected adjournment
of the 106th General Assembly, the House and
Senate have now passed a budget as well as a bond and an
indexing bill. The technical corrections and “omnibus”
bills are still moving between the two bodies to resolve
language differences, but are expected to be resolved
this evening or tomorrow.
The
most significant occurrence heralding the end of session
is the passage of the appropriations bill or budget.
This $29.9 million spending plan has passed with
bi-partisan support this year. It is heralded as a “no
new taxes” plan which recognizes the state’s priorities
and makes some tough decisions. The toughest sticking
points were a fish hatchery/tourism magnet in Carter
County and the Governor’s Office of Child Care
Coordination. The former was abandoned and the latter
was funded after much haggling.
The
Senate has run out of reimbursable days per the
constitutional limit of 90 days every two years, so they
are working for “free” today and the same is to be
expected for tomorrow. Unless there are major hiccups,
the 106th General Assembly could “sine die”
sometime tomorrow.
Your
Smith Harris & Carr team will be with them all the way,
so please don’t hesitate to call on us if you have any
questions about specific bills or need information on
specific provisions in the appropriations bill.
Happy Summer!
May
28, 2010
There was progress toward the end of session this week,
although not as much as hoped. In order for the 106th
General Assembly is to pass a budget and adjourn sine
die next week, they will likely have to work well into
the night and into the weekend. Returning the week of
June 6th to finish remains a distinct
possibility.
The
Senate voted on Thursday to, once again, override the
Governor’s veto of the “guns in bars” bill. The House is
expected to do the same when they reconvene next week.
The
House Budget Subcommittee met on Tuesday and Finance
Committee Chairman Craig Fitzhugh presented the house
democrat (and some republicans) budget plan. That
meeting was the only House committee meeting all week.
No votes were taken. The remainder of the week was
spent in caucus meetings and with House finance
leadership meeting with members of the Senate on a
budget that both could agree on. The House used two
days for floor sessions this week and has three
remaining days.
The
Senate Finance Committee had incredibly long meetings
this week (yesterday’s was almost 8 hours long),
culminating in passage of the appropriations bill after
exhausting discussion of programs that were being “defunded.”
There was limited discussion about the $340 million of
“contingent” appropriations, including funding for
critical access hospitals, community college capitol
needs, and various Economic and Community Development
initiatives, which are based on an assumption that the
state will be able to shift spending due to an extension
of enhanced federal funding (FMAP) by Congress.
The
Senate approved budget includes none of the new fees or
taxes recommended by the Bredesen administration, but
relies on a combination of shifts to non-recurring
funds, elimination of funding, and the use of state
reserve funds to balance the budget. Although there are
no raises for state employees, it includes a one time
longevity type payment for most state employees and
teachers as well as and funds for a “layoff package” for
any state employees who will be terminated. It leaves
all the TennCare funding recommended by the
administration intact, thanks, of course, to the earlier
passage of the hospital coverage fee. The budget the
Senate approved last night does not have the backing of
the House Finance Committee leadership, leading many to
believe that a conference committee will be required to
work out the differences.
When
the Senate Finance Committee finally finished at about
10:30 p.m. last night, the full Senate went into session
and worked through some 30 bills on their calendar,
delaying anything that might require serious discussion
until next week. They stopped at midnight and left the
Capitol as drained as the group of 40 or so state
employees and lobbyists who had stuck with them to the
bitter end, out of either obligation or paranoia.
The
Senate has one remaining session day, which will be next
Wednesday (they will be meeting at 2:00 p.m.). They were
warned last night to bring enough clothing to stay a
while, even if it means they aren’t getting paid after
their one day is used.
The
Senate Finance Committee meets beginning at 2:00 p.m. on
Tuesday, June 1, while House Budget Subcommittee has
scheduled 11:30 a.m. on the same day (but that time is
tentative). The House has set only one floor session -
2:00 p.m. on Wednesday, June 2 (same as Senate). (Note
to Smith Harris & Carr employees – don’t make any
weekend plans!)

May
20, 2010
The
106th continued the shuffle toward final
adjournment this week, although it was shuffling more
like Tim Conway on the old Carol Burnett Show, with
meetings of the Senate Finance Committee on only Monday
and Tuesday and no Senate floor sessions.
House committees (Finance and Calendar & Rules) met
early in the week and again on
Wednesday and the House
had floor sessions on Monday evening and Thursday.
Despite near begging by Sen. Jim Kyle of Memphis, the
Democratic Leader of the Senate, the Senate Finance
Committee did not vote on the appropriations bill,
preferring to wait for the House to act on a proposal.
Sen. Kyle even offered the committee his own version of
a budget, a derivation of the Senate Republican plan,
with no new taxes. He was assisted by Deputy Governor
John Morgan, but assured everyone that this was not an
administration plan. There were no takers.
The
Thursday House session was a marathon, lasting from
9:00am until about 4:30pm. Based on their actions, the
House is largely caught up on legislation other than the
budget and bills that expend money. The Senate is
planning for a lengthy floor session on Monday and will
hopefully join the House in being caught up on items
other than the budget and related bills.
The
House plans to go into session on Monday, May 24 at
4:00pm and there will more than likely be an
announcement as to what time the Finance Ways and Means
committee will be meeting. The Senate plans to meet on
Monday, May 24 at 1:00pm for session.
Although the Governor was in China this week, he was
able to veto the 2010 version of “guns in
bars/restaurants” from overseas and the sponsors will
likely call for a veto override vote on that next week
as well.
Another major piece of legislation, the TNInvestco
expansion, did not receive a vote in the House Finance
Committee and awaits Senate floor action. This program
is strongly supported by
Commissioner Reagan Farr and
Commissioner Matt Kisber, but it has many in the General
Assembly suspicious. Add to that a lawsuit from a
want-to-be recipient and you have the makings for long
deliberations and significant debate in both the House
and Senate.
Although the buzz in the halls this week was that next
week will be the last, and the number of legislative
days is ticking down like a time bomb, that is far from
certain.
May
13, 2010
We
are happy to report that the General Assembly seems to
be moving toward closure. This week saw marathon
meetings of the Senate Finance Committee, a presentation
by the Bredesen administration of their proposed
appropriations bill amendment (based on more current
revenue figures), and, at last, the unveiling of a
budget proposal by the Senate Republican Caucus. House
members, both Republicans and Democrats, are caucusing
frequently and are reportedly attempting to work out
their own differences on the appropriations bill,
although not much has happened publicly, as of yet.
The
Senate Finance Committee will soon take up the
administration’s “technical corrections” bill, which
essentially determines how much new revenue the
legislature will have available to work out a balanced
budget. The myriad of technical changes in the code are
projected to raise some $49 million in recurring state
revenue, and a proposal to lift the cap on the sales tax
charged for major purchases would raise an additional
$85 million. It is widely believed that the Senate
Republican majority will refuse to pass the lifting of
the sales tax cap. They are also expected to propose a
comprehensive amendment to the technical corrections
bill, eliminating several of the other revenue raising
components, including adding sales tax to the currently
exempt first $15 of cable service.
The
Senate plans to use none of their three remaining
“session days” next week, so the focus will be on the
Senate Finance Committee and the proposals approved
there. There will also be plenty of off the record
discussion with the House leadership as the House
Finance Committee continues its work.
Currently, the 106th General Assembly is
expected to adjourn sometime around May 28 or 29, but,
of course, we’ll see.
April
2, 2010
Elections
Qualification deadline for election in 2010 was noon
today. That deadline produced some surprise
announcements!
Representative Jason Mumpower (R – Bristol) announced
last Thursday that, after 14 years of legislative life,
he will not seek reelection after this term. The
Republican majority leader has kept a low profile since
losing the Speaker of the House position to Kent
Williams last year and says he is “looking forward to
new challenges”. Those considering a run for Jason’s
house seat include Speaker Kent Williams’ aide, Scotty
Campbell and Representative Matthew Hill’s brother,
Timothy.
Today, Rep. Donna Rowland (R – Murfreesboro) announced
she too would not be seeking reelection this year. She
has served in the House for 10 years and states that she
never did “intend to be a career politician”.
Additionally, Representative Susan Lynn (R-Mt Juliet);
Representative Mike Bell (R-Riceville) and Rep. Stacey
Campfield (R-Knoxville) are giving up their house seat
to run for the Senate.
Sub-committees Closing
As
this hectic week on the hill came to an end, so did some
more of the House sub committees and next week is
expected to be the final meeting of several more,
including Civil Practice Sub; Local Government Sub and
Employee Affairs Sub. It’s a great sign of progress but
even though there are committees closing, we’re still
thinking that the legislature will not be adjourning
until May.
Budget
Commissioner Dave Goetz reported Monday that the state’s
general fund revenue could fall short as much as $75
million in this fiscal year. In additional to the poorly
performing sales tax, the tobacco tax is not producing
as much as years past and that revenue is expected to
keep falling next year.
February 5, 2010
The
Governor presented his FY 2010/11 budget this week at
his annual State of the State Address on Monday night.
For
the complete text of the address, go to:
Bredesen_2010_State_of_the_State_Address.pdf
To
view the proposed budget and/or the compilation of base
budget reductions go to:
Fiscal Year 2010-2011 Budget Publications
Generally, the legislative reaction to the budget the
Governor referred to as a “commonsense family budget”
has been positive. Governor Bredesen proposed
significant cuts but used reserves to “buy back” some of
the cuts to social services for the next two years. He
also proposed significant cuts to state employees but
used reserves to “buy back” some of those positions as
well.
He
suggested an increase in the drivers’ license fee to
fund some services in the Department of Safety but no
other fee increases were recommended.
He
also suggested a few tax increases, including some cable
and telecommunications taxation and REIT taxation.
These new taxes have not been warmly received by House
or Senate republicans who may cause some friction and
thus a potential $49 million recurring hole before final
passage.
The
budget was the main topic of conversation this week and
will remain the hot topic throughout this session. The
Funding Board is scheduled to meet in early April and is
expected to provide revenue estimates at that time.
Most legislators agree that the budget picture is not
going to improve, and they should go ahead and act on
the budget. Then they can return to their districts to
protect their seats during the upcoming elections.
The
standing committees are also starting to schedule bills
and take votes, and are even talking about shutting down
in late March and early April. This talk bodes well for
an early adjournment, but we shan’t hold our breaths!