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From the Hill: House passes 2010 budget of $28.6 billion before closing session

By State Rep. Matthew Hill
The State House unanimously passed a budget on June 4, after weeks of contentious negotiations.
After some lawmakers held the line against proposed tax increases and fought for the removal of wasteful expenditures, the budget proposal finally agreed upon does not include either but still protects funding for priorities.
Lawmakers left a healthy amount in the state’s reserves accounts, including $429,207,100 in the Rainy Day Fund and TennCare Reserve Fund. The combined total of all reserve accounts will be $615.4 million. The 2010 budget is $28.6 billion after legislature made approximately $650 million in cuts.
We also reached a consensus on several contentious items such as the Career Ladder program, Agriculture Enhancement Grants, and state employee bonuses.
Legislature approved the Career Ladder program in 1983 as a form of incentive pay for educators. If teachers hit certain benchmarks, their pay was supplemented. The program was closed to new entrants in 1994, and shrinks every year due to attrition. Estimates for the 2010-2011 fiscal year indicate approximately $5.4 million in savings because of retirements.
Although there was discussion of removing Career Ladder funding from this year’s budget, the program was ultimately included with temporary funding and totals $34.5 million.
The Governor had originally proposed a 3 percent one-time bonus for state employees costing $164.7 million but lawmakers felt that was excessive in a year when layoffs were occurring. The proposal in the final budget would provide for a one-time bonus of $50 per every year of service. Employees will receive a minimum of $150 and a maximum of $1,250 and the bonus is contingent upon the state collecting over projected revenues.
Legislators said the bonuses would likely happen in the fall.
The budget cautiously allocates federal funding that has not yet been approved by the U.S. Congress, but funds only “contingency items,” that is essentially ‘extras’ with these dollars.
The state was expecting Congress to have already approved the nearly $340 million in one-time funding, but Congress left on Memorial Day break without acting on the extension. The funds will provide for upgraded radios for state troopers, an unnamed economic development project, the demolition of several dilapidated buildings at the University of Tennessee’s Health Sciences Center, and the Civil Rights Museum. A portion would also be used on a post-flood tourism campaign to demonstrate “Tennessee is open for business.”
In light of the devastating floods at the beginning of May, we included flood relief in the budget to the tune of $19.9 million. Flood relief plans were discussed at length during budget negotiations as lawmakers recognize the need for aid. Proposed methods for funding flood relief proposals included using cash from the state’s Rainy Day Fund, using a portion of stimulus money, and through various tax relief measures.
Ultimately, the legislature settled on a plan that eliminates the state and local sales tax on major appliances, residential building supplies, and residential furniture. To receive a refund from the Department of Revenue, flood victims must have purchased the equipment between May 1 and Sept. 30. The total amount that can be received is $2,500 and the claimant must file a single application with the Department of Revenue by Nov. 30, along with satisfactory proof from FEMA showing damage. The refunds are allocated out of the state’s General Fund.
The “technical corrections” bill submitted each year by the Administration has evolved over time from legitimate technical changes in the Tennessee Code Annotated to a tax bill that supplements the state’s General Fund. Conservatives have fought for returning the legislation to a true “technical” corrections measure for many years, and this year the legislature was successful. Three months ago, the technical corrections bill was laden with more than $130 million in tax increases to balance the budget. We stripped the taxes from the bill, which now includes tax relief, flood victim assistance, and economic development measures. The final vote on the legislation was 92-2.
The State House passed House Bill 2622 last Tuesday night with a vote of 53-32, after months of wrangling in committee. The bill prohibits the legislature from requiring any person to participate in any health care system or plan. Opponents attempted to attach poison pill amendments and use complicated parliamentary procedures in an effort to kill the bill. Because the House and Senate versions differed, the legislation went to a conference committee. Although most House members present voted for the conference committee report, it failed to obtain the 50 constitutional votes for passage and died along party lines with a 44-39 vote.
Proponents of the legislation have fought to enact a proposal to counter the federal health care takeover, believing that expanding government programs is rarely an effective solution to complex issues.
Legislature voted last week on complex legislation that ensures fairness in construction industry bidding protects general contractors from workers’ compensation claims filed by subcontractors and addresses employee misclassification.
Earlier in the year, the General Assembly approved legislation calling for the immediate suspension of a law passed in 2008 due to unintended effects of the act to require sole proprietors and partners engaged in the construction industry to carry workers’ compensation coverage on themselves.
Since January, the legislature has been discussing alternative ways to address gaps in coverage for workers in construction companies without harming small business owners.
The new law requires everyone in the construction industry to be covered by workers’ compensation insurance or be specifically exempted. Sole proprietors and partners in the construction industry will have to carry insurance on themselves, but can obtain an exemption from the requirement. The exemption is limited to certain members of the construction industry including, but not limited to, officers of a corporation, a sole proprietor, members of a limited liability company, or a partner in a limited partnership.
The measure also substantially increases penalties for employers who fail to comply with the law. The bill passed 87-7.
The State House of Representatives voted 61-30 to override the Governor’s veto on a measure that allows licensed carry permit holders to carry firearms into establishments that serve alcohol. It was the second time the legislature has overridden the Governor’s veto on the proposa. The law took effect immediately on June 4.
Senate Bill 440 was approved by the House amid complaints from some opponents. The bill requires felons to have paid all court costs associated with their conviction before the restoration of their voting rights. After much discussion, the bill passed 70-23.
House Bill 670 would require jailers to determine whether or not their inmates are in the country legally, and set the wheels in motion to have them deported if it is found they are illegal.
The legislation was amended several times as some legislators attempted to exempt their individual counties from the requirement and the House and Senate ended passing different versions, forcing the bill into a conference committee.
The changes were finally reconciled and the only counties exempted are Davidson and Shelby Counties. The final proposal was approved 84-3.
You are invited to my Town Hall meetings I am holding this week to discuss all the happenings of this year’s session. These meetings are a time for you to ask questions, share comments, and hear about what is going on with your government.
They will be held Thursday, June 17 from 5:30-7 p.m. at the Jonesborough Visitors Center, and on Friday, June 18, from 5:30-7 p.m. at the Telford Diner on Mill Street in Telford.
As always, if I can ever be of any assistance to you, please feel free to contact me in Nashville or at home. My cell phone number is 384-2248. Thank you for allowing me to serve you.