VOL. 41 | NO. 1 | Friday, January 6, 2017
Tax hikes, cuts both eyed as Legislature reconvenes
By Sam Stockard
The 110th General Assembly is set to convene on Jan. 10 with unfinished business from previous sessions likely to dominate debate. Here’s a look at some of the hottest topics expected to arise.
Fuel taxes
More than a year after taking a listening tour across Tennessee, Gov. Bill Haslam appears ready to introduce a plan in his Jan. 30 State of the State address for increasing or reforming fuel taxes to help pay for $6 billion in committed road and bridge projects.
The second-term Republican governor says he plans to meet with legislators to consider options before the session opens, but notes he is set to make a pitch.
“We’re very ready to present a proposal, but we were asked to wait until they had a chance to have those discussions … so that they could be a part of those discussions with us,” Haslam says.
Tennessee’s 21.4-cent-per-gallon gas tax, including a 1.4-cent petroleum fee, raises roughly $660 million annually. It hasn’t been increased in a quarter-century, and Haslam has been broaching the idea for raising or reforming fuel taxes for more than two years to relieve travel congestion statewide. The state’s diesel tax is 18.4 cents per gallon.
Haslam met resistance from groups such as Americans for Prosperity two years ago when he began discussing the possibility of a fuel-tax increase, and the group is likely to put up opposition again.
The governor’s proposal isn’t likely to draw opposition from the Tennessee Trucking Association, which has stated fees should be paid by all types of motorists, including those using electric and natural gas-powered vehicles.
Tennessee has an “enviable” position in that it holds no debt for transportation, and the “pay as you go” philosophy should continue, says Dave Huneryager, president & CEO of the Tennessee Trucking Association.
But he points out the transportation fund “has gone begging for a long time.”
Even though the state’s general fund budget will have excess money in the coming year, very little of that will be diverted to the transportation fund. Revenue will have to be generated to cut into $6 billion worth of projects on backlog.
“Our industry has supported that (fuel tax) increase and will continue to do so in the upcoming Legislature,” Huneryager says.
Budget and tax cuts
A budget surplus of nearly $1 billion could be in the offing from the state’s $33.3 billion budget for fiscal 2016-17, and the State Funding Board is projecting $845,000 in new, recurring revenue for next year, based on a November vote on economic calculations.
That means the state could have nearly $1.8 billion more than expected to divvy up in the coming fiscal year, officials say.
“Everybody knows we’re in a good situation budget-wise in Tennessee,” Haslam says. “But I think states get in trouble when they don’t make smart decisions when they have money. Then it comes back to haunt them when the economy cycles back down.”
The governor says he wants to make sure the next budget takes care of the state’s short- and long-term needs.
Sen. Randy McNally says the budget surplus, which is one-time revenue, could come in just under $1 billion. It will go toward the rainy day fund, a backlog of capital projects, capital maintenance and replenishing the transportation fund, he says.
The recurring money, with $500 million from the budget that ended last June and another $378 million projected for the current budget, could be used to “chip away” at franchise and excise taxes on businesses, in addition to a professional privilege tax, says McNally, chairman of the Senate Budget Committee and the likely next Senate speaker.
Tennessee’s 5 percent food sales tax could be on the chopping block, as well, McNally says.
“The bad thing is it’s the most stable part of the sales tax base. But … as far as tax relief, it has the broadest constituency, I would think,” McNally says.
Education vouchers
A year after he declined to bring voucher legislation to a House floor vote, state Rep. Bill Dunn says he plans to revive the opportunity scholarships proposed by Gov. Haslam.
The bill will have to go back through the Legislature’s committee system, but Dunn, a Knoxville Republican, says he was only a few votes short last year of gaining passage and says he believes the numbers could change in his favor in 2017.
“It’ll still be close, but hopefully my colleagues will put children before bureaucrats this year,” Dunn says.
As previously written, the bill would allow low-income children in the state’s lowest-performing schools to use state funds to attend private schools. It would have funded 5,000 scholarships the first year and 20,000 by 2018-19.
Dunn says he believes students who are struggling at a public school could improve academically by a change of “environment,” and he points toward a Knoxville school where only 7.9 percent of the students were reading at a “proficient” level as a prime example for the use of vouchers.
“I think they might be around some students who are more focused on their work. I think you might have a school where they see a whole different environment, a whole different approach to what they’re doing,” Dunn points out.
Tennessee Education Association spokesman Jim Wrye says he’s not sure what has changed in the way of a vote count. He contends primary election results TEA monitored across the state favored candidates who oppose vouchers.
The organization’s polling also showed “consistent” opposition to vouchers, with 57 to 58 percent of respondents saying no to vouchers, 24 to 25 percent saying yes and the rest undecided.
“Over and over again, people said, ‘We don’t want that,’” he says.
Groups such as the Federation for Children went after Democratic Memphis Reps. Johnnie Turner and Antonio Parkinson, spending large amounts of money, but picking up only a fourth of the vote during primaries, Wrye notes.
In Memphis, which is often used as the poster child for voucher needs, Wrye says the vote clearly shows residents want to hold on to their public schools. Almost all of the Achievement School District’s 33 schools are located in Memphis, and most are run by charter operators.
State data also show Shelby County schools are improving and part of the reason is those operating under iZone, or new improvement strategies, are doing better than ASD schools.
“I think Tennesseans are rightly conservative. They know what has worked for them and their families and communities in the past and vouchers have never been proven to work,” Wrye adds. “They go after some of the bedrock institutions of our state and our communities and people don’t like them.”
He hopes that will “shine through” again as the Legislature debates this critical issue.
Gay counseling
Sen. Jack Johnson’s counseling act created a firestorm of protest among counselors and the LGBT community in 2016, and he’s sponsoring a follow-up bill this year.
Largely considered an attack on the gay and lesbian community, Johnson’s new law says no counselor or therapist shall be required to counsel a person on “goals, outcomes or behaviors” that conflict with their sincerely held principles. The counselor would be able to refer the client to someone else, and they couldn’t be sued or arrested for such action. The measure wouldn’t apply in cases in which the patient is considered an imminent danger to themselves or others.
Under the new bill from Johnson, a Franklin Republican, the Tennessee Board of Professional Counselors would be required to write its own code of ethics to be used for licensing under state law.
The measure would change the state requirement automatically accepting the code of ethics from the American Counseling Association, a private group based in Alexandria, Va., with branches in the United States, Europe and Latin America.
Johnson contends any change adopted by the ACS alters the state’s licensing law, regardless of the state board’s view and bypassing the will of Tennesseans and their elected representatives.
“This is an inappropriate delegation of the Legislature’s authority to an unelected, unrepresentative and private interest group that should have never been abdicated,” Johnson says via statement.
According to reports, Johnson was surprised his counseling legislation caused such a stir in 2016. Johnson could not be reached for comment for this article.
Nashville Mayor Megan Barry opposed the measure last spring, in part because the Nashville Convention and Visitors Corp. said it would cost Nashville several million dollars in lost convention revenue. The mayor’s office says it hasn’t reviewed Johnson’s latest legislation yet.
But the Tennessee Equality Project, an advocacy group for the LGBT community, considers it “discriminatory in nature.”
“I think it should be a concern to anybody who either offers their opinion or receives it,” says Tennessee Equality Project spokesman Chris Sanders, because the code also covers matters such as sexual harassment and forms of payments and any time a code is abolished, people will be uncertain what will be put in the new standards.
Sanders says Johnson should have expected consternation last session because he sponsored the bill without consulting the profession it affects, as well as the people they counsel.
Asked if he considers this measure a jab at the LGBT community, Sanders says Johnson appears to entrust Tennesseans to write the code but not completely.
“If you notice in his bill, he doesn’t trust Tennesseans completely because he requires whatever else they do, they keep the part about allowing counselors to turn people away,” Sanders adds.
If Johnson really wanted a fresh start, he would give the Board of Professional Counselors a “blank slate,” as long as they don’t mention a national group.
Outsourcing concerns
Democratic lawmakers are expected to continue hammering at Gov. Haslam’s proposal to privatize jobs across the state, primarily through development of a facilities management contract expected to be offered to departments statewide.
A recent review of more than $35 million in savings projected by the state’s universities drew criticism from state Sen. Lee Harris, D-Memphis, and Rep. John Ray Clemmons, D-Nashville, because of connections between the governor’s election campaign and KraftCPAs, the auditor that compiled the report.
Harris and Clemmons are planning meetings Jan. 20 at Fall Creek Falls State Park and Jan. 27 at Pickwick Landing State Park to listen to state employees worried about being shifted to a private vendor.
Democrats say part of Haslam’s outsourcing plan involves spending $22 million to renovate Fall Creek Falls’ facilities to prepare it for sale to a private operator.
The Haslam administration has said universities will be allowed to decide whether they will use a facilities management contractor, in addition to promising state workers they will be able to keep their jobs and benefits. State officials say savings will come through the ability to buy items in greater bulk and to eliminate sub-contracting work.
But groups such as United Campus Workers say savings can come only through the reduction of employees and benefits.
“We’ve tried this kind of thing before, and it led to higher costs for taxpayers and very public failures,” Harris says. “We should be talking public investments in our state parks and boosting tourism, not trying to privatize them.”
In the cross-hairs
Gun legislation will play prominently again this year in the General Assembly.
The Tennessee Firearms Association is expected to continue backing a “constitutional carry” measure enabling people to carry weapons – if they legally possess the firearm – without paying a state fee, submitting to state background checks or going through state training, according to its website.
The association also wants to eliminate “gun-free zones,” make the claim of self-defense immune to criminal charges and change commercial property liability laws to make employers liable for the safety of employees and guests if they ban firearms.
Conversely, the Safe Tennessee Project is expected to continue pushing a measure dubbed Makayla’s Law, making it a violation for a person to “recklessly” leave a gun available for a child under 13 to use.
The legislation stems from a case in which an 11-year-old boy was found delinquent of killing 8-year-old MaKayla Dyer after taking his father’s shotgun from their mobile home in Jefferson County two years ago.
Medical marijuana
After passing legislation allowing people to use cannabis oil for medicinal purposes, state Rep. Jeremy Faison wants to expand his efforts this session to apply to medical marijuana.
Faison, a Cosby Republican from East Tennessee, and state Sen. Steve Dickerson, a Nashville Republican and anesthesiologist, are sponsoring a tightly-constructed bill to decriminalize the growing, manufacturing, dispensing and use of the cannabis plant for medical uses only.
The bill calls for creation of the Medical Cannabis Commission, which would operate under the Department of Health, to set up rules for pricing, licensing and safety checks.
Tennessee could have 50 growing operations and 150 dispensaries, and health-care professionals would have to obtain a special license to prescribe the drug.
Health-care professionals would be able to recommend medical cannabis cards for patients, who must have one of several health problems to qualify. Those include cancer, HIV/AIDS, Lou Gehrig’s disease, post-traumatic stress syndrome, multiple sclerosis, intractable pain, seizure disorders, spasticity, Parkinson’s disease and cerebral palsy.
Medicaid expansion
A 3-Star Healthy task force appointed by House Speaker Beth Harwell is working on a proposal to expand TennCare to provide insurance coverage for people caught in a gap between the state program and the Affordable Care Act. The move comes after Haslam’s Insure Tennessee failed to gain enough traction to reach floor votes in the House and Senate.
The panel is eyeing a two-year pilot program to serve veterans and people with behavioral health problems before expanding to cover a total of about 290,000 people without insurance. The percentage split between the state and federal government remains under negotiation.
But the task force’s timeline and the amount of flexibility it could receive from the federal government is in limbo with President-elect Donald Trump set to take office Jan. 20.
Whether the Affordable Care Act will be repealed or simply changed will determine what direction the task force takes.
“Everybody has an opinion on which way it’s going to go and no one really knows. All we can do is continue meeting and continue looking at different ideas we might want to have,” says state Rep. Cameron Sexton, a Crossville Republican chairing the task force.
Still, Sexton says he believes the state will be in a good position once it gets more direction from the Trump administration and Congress and finds out whether states might receive Medicaid block grants or more leeway to control how Medicaid funds are used.
Sam Stockard can be reached at [email protected].