Lawmakers continue to focus on budget/More budget reductions likely
The State Senate continued to spend the majority of its time this week hearing budget proposals from various agencies and departments of state government, amid news that Tennessee continues to fall short of budget projections for the current fiscal year. Budget Director Bill Bradley of the Department of Finance and Administration told Senate Finance Committee members on Tuesday that February revenues were worse than expected and the administration will likely bring recommendations for further reductions in the budget presented to the General Assembly on February 1.
The budget proposal assumed the state would fall $153 million short of the budgeted tax estimates in the general fund for the current 2009-2010 fiscal year. As of January, the state was already under collected by $152 million. There was also an assumption that the budget collections would improve in the second half of the fiscal year, which began on January 1.
“I would certainly think that the collections when we close for February are likely to be worse than we had hoped for,” said Bradley. “I think there is a good prospect that we may have to lower our revenue estimates some more. I would think there is the prospect that we would have to bring you some recommendations on further reductions but I can’t be very precise at this point.”
Reductions would not only effect this year’s budget but have a ripple effect to lower the recurring base for the 2010-2011 fiscal year, meaning further reductions for the upcoming budget year. Bradley said the shortfall is also likely to alter the state funding board projections. Among other duties, the Funding Board is responsible for providing the Governor and the General Assembly estimates of state revenue for the current and upcoming fiscal year. The governor’s budget proposal is crafted based on the high end of the revenue figures adopted by the Funding Board at the 1.9 percent growth rate. The Board is scheduled to meet on March 31.
Unlike Congress, the Tennessee General Assembly is constitutionally bound to balance the budget. The weakened economy means legislators must be vigilant to make sure that taxpayer dollars are spent in the most efficient and effective manner.
Clawback payments — On a more positive note, officials from the Bureau of TennCare told lawmakers this week that the Centers of Medicare and Medicaid Services have announced that Tennessee could keep approximately $120 million of the “clawback payments” associated with prescription drug coverage. The change will help soften the blow of Governor Phil Bredesen’s proposed $200 million in reductions from TennCare.
Some Tennesseans who are Medicaid-waiver enrollees are also enrolled in Medicare. The federal government requires the state to contribute some of its TennCare funds in lieu of paying twice for the benefits that both programs cover, called “clawback payments.” Temporarily, the federal government will be forgiving those payments, thus saving the $120 million.
Tennessee joined several other states in asking the federal government to suspend the payments, because the federal stimulus aid for Medicaid meant the state would have paid less for prescription drugs in the next two budgets. The Centers for Medicare & Medicaid Services recently agreed, leading them to suspend the payments temporarily.
Transportation funds — Budget hearings in the Senate Transportation Committee included testimony this week showing the federal government has rescinded $686 million in Tennessee’s highway funding since 2005 and officials expect another $80 million to be rescinded in the upcoming budget year. The funds were part of the Safe, Accountable, Flexible, Efficient Transportation Equity Act (SAFETEA-LU) which is the federal government’s surface transportation program for the states’ highway, highway safety and transit needs.
“When they took away our planned expenditures, we now have zero flexibility,” said Tennessee Department of Transportation (TDOT) Chief Engineer Paul Degges. “As of September 30, 2009, we have spent every single available dollar of apportionment in our regular work program.”
“Additionally, there were funds in the rescission that were actual cash taken from us,” Degges added. “The discussion you hear in Washington is that really doesn’t effect the states, but I will tell you that is one hundred percent wrong. It has a direct impact on projects that we have currently under design and development and so the rescission has taken away our ability to deliver projects in the state of Tennessee.”
SAFETEA-LU expired on September 30 and Congress has failed to pass new legislation, opting to patch through a series of continuing resolutions which do not give states and local governments the ability to plan for needed road projects. States and local governments across the nation maintain a long-term authorization bill is needed to provide the financial stability and funding predictability that is necessary for transit systems and businesses to plan for the future and develop major capital projects. Most states prefer a multi-modal, multi-year transportation authorization bill that focuses on all modes of travel to improve the nation’s transportation infrastructure, which will in turn, creates new jobs.
The Tennessee General Assembly didn't authorize all the transportation bonds the governor asked for in his budget due to the uncertainty of this Fund under an amendment that was placed on the bill. This has proven to be a fiscally prudent action since the federal funds needed to pay interest on these bonds may not be available.
Tennessee chosen as finalist in 1st round of Race to the Top Funds
Tennessee is one of 16 states that were chosen as first round finalists for “Race for the Top” funds. The announcement was made in Washington, D.C., Thursday by U.S. Secretary of Education Arne Duncan. Forty states and the District of Columbia submitted applications in January to compete in the program, which will provide $4.35 billion to qualifying states.
The premise is to reward states that show the greatest willingness to push innovative ideas to improve student achievement through greater testing standards, improved data collection and better teacher training. In January, the General Assembly passed legislation in a Special Session on Education designed to put Tennessee in position to be a leader in the Race to the Top competition. That action could help the state secure up to $500 million in federal funds for education in Tennessee.
In the next step of the competition, Tennessee will send a team of up to five people to make a presentation to defend the state’s applications to the Department of Education later this month. A panel of outside judges is assisting the U.S. Department of Education in choosing the winners. First round winners will be announced in early April, while second round winners will be revealed in early September.
Senate General Welfare, Health and Human Services Committee
approves legislation calling for state to acknowledge
birth of a stillborn infant with birth certificate
The Senate General Welfare, Health and Human Services Committee approved legislation this week calling for the state to acknowledge the birth of a stillborn infant by issuing a birth certificate if the parents request one. The action followed testimony from parents of a stillborn infant who talked to committee members about the need for the state’s recognition that their baby had been born.
“This is to acknowledge for basically psychological reasons, you know, and grieving and that sort of thing,” said Beth Barnett of Cordova. “But it’s also like a kick from the state when you find out you’re going to walk out of the hospital with almost nothing; and then you find out that the state doesn’t even recognize that you even gave birth, period.”
The legislation, SB 3189, calls for issuance of a birth certificate upon the request of parents for stillborn infants if the infants are 20 weeks or more gestation or 350 grams.
Bill addresses responsible sale of beer at drive-through establishments
Legislation was approved in the Senate State and Local Government Committee this week that requires anyone selling beer through a drive-through window, curb service or drive-through to be certified under Tennessee’s responsible vendor law. The move aims to assure that clerks selling alcohol would be trained to identify fake or altered identification to prevent under-age sales or to recognize the effects of alcohol to prevent drunk driving.
The responsible vendor act, approved in 2006, requires clerks to attend a certified training course within 61 days of employment, with a follow up renewal each year. It is currently a volunteer program with 459 participants. The program has helped to reduce the sale of beer to minors in Tennessee by 30 percent, according to Danielle Elks, Director of the Alcoholic Beverages Commission.
Bill calls for collaboration to help curb the number
of children submitted to state custody
The Senate General Welfare, Health and Human Services Committee has approved legislation to help Tennessee get a handle on counties that were committing kids into state custody at a rate three times higher than the statewide average. Children come into state custody for a wide variety of reasons, including delinquency, abandonment, and lack of basic needs, to name a few. The legislation strengthens the collaborative planning process put into place last year to help families stay together, but repeals the cost-sharing provision with counties that costs counties $3.5 million last year.
The state and counties have been working closely over the past several months with county courts to examine issues that can lead to higher commitment rates. This bill deletes the cost sharing provision for counties which exceed 300 percent of the statewide average; permits the state to initiative a collaborative planning process with counties nearing 200 percent of that average; requires regular progress reports on this process; and, encourages continuation of proactive communication between the Department of Children’s Services and county courts.
Issues in Brief
York Institute — The Senate Education Committee voted this week to restore state funding for York Institute, a 700-student high school located in Fentress County. The action came after committee members were urged to keep the commitment made 85 years ago to World War I hero Sergeant Alvin York to fund the school he struggled to build. The York Institute funding was cut by the governor’s proposed 2010-2011 budget, which was presented to the General Assembly on February 1.
Inmate relations coordinators — The State Senate has given final approval to legislation to give inmate relations coordinators the same gun carrying privileges as correctional and certain other law enforcement officers have under Tennessee law. The bill, Senate Bill 565, came to the legislature after the Attorney General issued an opinion that inmate relations coordinators were not covered under the same law that provides the right to carry firearms to these correctional officers due to an ambiguity in the law.
Private higher education institutions — The full Senate has approved a bill authorizing any private non-profit college or university that is chartered in Tennessee to purchase and contract for the purchase of any materials, supplies, and equipment through the Department of General Services in the same manner as all departments, institutions, and agencies of state government. The measure, Senate Bill 3512, gives the 35 non-profit higher education schools serving 39,000 Tennessee students the use of the state purchasing plan to help them realize savings.
Eliminating government duplication — The full Senate has approved a bill to eliminate the General Assembly’s Education Oversight Committee, a duplication of the efforts of the House and Senate Education Committees. Passage of the bill, Senate Bill 2408, would save the state $28,300 in travel and per diem costs. The Committee was created to oversee implementation of the Master Teacher Program, which has since been phased out.
Week in Review from State Senator Doug Overbey
Lawmakers continue to focus on budget/More budget reductions likely