Today marks the beginning of the governor’s annual budget hearings, the administration’s annual dog-and-pony show for state agency heads to highlight the happenings at their departments.
It’s also a time to explain what each agency would cut if forced to do so.
Over the full week, Gov. Bill Haslam will hear each department head explain agency spending plans and how they would cut 3.5 percent from their bottom lines, an exercise assigned each year by the governor’s office. However, revenues feeding the state’s $33.8 billion budget appear flush so far this year.
Here’s a short list of what to watch for as the budget hearings unfold this week:
1. The Department of Corrections budget. After a wild year of headlines ranging from taxing schedules for prison guards to safety in correctional facilities, the presentation from the department’s commissioner, Derrick Schofield, will be telling. The commissioner has insisted there is little to see in the department’s troubles, but whether he comes to the governor with a wish list of spending to make those problems go away — and how it’s received by the governor — will be worth watching.
2. Judging the winds on education funding. With a lawsuit seeking more state money for education currently sitting in Davidson County Chancery Court, many are wondering whether and how the governor will boost funding for schools. Close to a dozen school boards across the state have either sued the state or are thinking about it to fight Haslam for more education dollars. Separately, the governor has struggled to keep his vow to increase teacher pay faster than any other state in the country. With the debut performance of first-year Commissioner Candice McQueen presenting the Department of Education’s proposed budget, the key will be whether the governor hints at what kind of moves he will make on either of these fronts.
3. The gas tax pitch from the Department of Transportation. Commissioner John Schroer has made it no secret in recent years that he wants the state to figure out how to better fund a mound of backlogged transportation projects. After he and Haslam spent the better part of a year trying to convince legislators to take up that challenge in earnest, it will be key to see how much gas Schroer and the governor give to calling for a change in the gas tax.
4. How much money does Haslam have to play with? After a scare in 2014 that forced the state to renege on promises to increase pay for teachers and make budget cuts, the governor is unlikely to spend the state’s growing revenues wildly next year. But with state tax collections so far this fiscal year up $223 million more than expected — posting the strongest first-quarter growth since 2004 — the governor will likely have more money to play with next year. Watch for what the governor says, or hints, about spending money on.
5. The tenor of TennCare talks. Following his failed attempt to get state legislators to approve his plan to increase healthcare access to 280,000 low-income Tennesseans this year, the issue of health care is still beating. Health care and social services eats up about a third of the state budget each year, and although the legislature is uninterested in the governor’s so-called “Insure Tennessee” plan, the growing cost of health care is one the administration and legislature will have to wrap their arms around next year.
Should Tennessee let Syrian refugees settle here? Yes, says Gov. Bill Haslam, but the federal government should let Tennesseans help vet them.
After a week driven by headlines about state officials wanting to halt the placement of Syrian refugees here after terrorist attacks in Paris, the governor is asking public officials to tone down the rhetoric while also insiting the state needs more authority to evaluate refugees first.
“I’ve never seen our people so afraid about something that the fear level would be here. And if we can be a part of the process, then we’re a whole different messenger out there among our population,” Haslam told reporters after a keynote address to the Nashville Rotary Club at the Wildhorse Saloon Monday.
"I think we have to be really careful about the blanket statements we make," he added.
House Republican Caucus Chairman Glen Casada, Franklin Repblican, told reporters last week that the state should round up and detain Syrian refugees placed in Tennessee, a statement sending shockwaves across the state, speaking to his base while infuriating immigration advocates.
The “vast majority” of refugees are families, not terrorists, Haslam told reporters. “I think we need to be cautious. Like I said, I asked the president to halt. But we also have to realize that there are a lot of people in this population who are doing the same thing any of us would do if we were in that situation,” Haslam said.
After a recent conference call between governors and White House Chief of Staff Denis McDonough, Haslam said he and other governors have received "no encouragement" that the federal government will allow states into the fold of examining refugees before their placement in states like Tennesseee.
Gov. Bill Haslam's 10-minute pep talk Wednesday on the latest happenings in Tennessee's business stratosphere lacked any mention of the state's most high-profile investment: Volkswagen. But Haslam did address the topic in remarks after his formal address to the two-day Governor's Conference on Economic and Community Development at the Renaissance Hotel.
The German auto company announced earlier Wednesday that Winfried Vahland, the head of North American operations for less than a month, has left the company over disagreements about how to restructure the business. The move leaves Volkswagen without a continental face following revelations that the company equipped vehicles with devices to skirt diesel emissions tests.
“He was actually supposed to have visited Tennessee this week or last. I guess we know now why he didn't come,” joked Haslam when talking to reporters after his speech at the 62nd Annual Governor's Conference on Economic and Community Development. “The key thing is for Volkswagen to define the problem and say what they're going to do about it. I think until they do that, everybody's going to be looking with some doubt about what they're doing when what we need them to do is say, 'Hey, we're making a lot of good vehicles.' And we need them to get back to selling those vehicles.”
Tennessee invested an estimated $360 million of incentives to lure Volkswagen to the Volunteer state, with local governments coughing up another $220 million to manufacture the Passat here. Another $260 million is on the way between state and local governments for a second line of vehicles.
Before hundreds of people at the annual conference downtown, Haslam stressed how easy it is to sell businesses on locating to Tennessee. Connecting education to the workforce is a must, he said, and the need for a rural development initiative is real and a new project of his administration. The state's work on development is a team effort, he added, and said despite occasional disappointments, the outlook is encouraging.
The governor smarts at the idea of repealing the Hall tax using surplus — he calls it "one-time" — revenue, instead he says the legislature needs to decide what they are going to cut commensurate to the lost tax revenue.
The income tax generated $303 million during the same fiscal year but only $189 million is retained by the state; the rest goes to local governments where the taxpayer resides. Kelsey’s bill doesn’t explicitly require it but he said the state should make up the revenue loss to local governments — effectively costing state government the full $303 million.
Gov. Bill Haslam's chief of communications, Alexia Poe, is leaving the administration to consult in the private sector, according to the governor's office.
Poe began with Haslam early on in his first term and is credited for being a senior advisor and strategist to the governor, cabinet members, senior staff and state departments.
"Alexia has been an integral part of our senior team," Haslam said in a prepared statement. "She is a strategic thinker and savvy communicator who brings a lot of insight into policy, politics and how government works. I will miss her but wish her the best in starting her own business."
Her tenure in government includes being the second female and youngest person in Tennessee history to serve as a governor's press secretary during Gov. Don Sundquist's administration. Her career has taken her to through the White House serving First Lady Laura Bush and on Capitol Hill leading communications for U.S. Sen. Lamar Alexander. Prior to shifting to the governor's office, Poe worked in Mayor Karl Dean's administration as director of economic and community development and led the department's public campaign for the Music City Center.
"I look forward to cheering on this administration as it continues to move the needle on education, attracting and growing high-quality jobs, and making state government more efficient and effective in serving Tennessee taxpayers," she said.
Poe's tenure on Capitol Hill was not without controversy. She ripped into the Capitol Hill Press Corps, of which this reporter is current chair, after reporters penned a letter to the governor complaining a rash of normally public events were going missing from his schedule. Poe contended groups the governor was speaking to wanted their meetings closed and the governor did not have the power to make them open.
Poe's departure marks the second cabinet member to part ways from the governor's office this summer. She follows the announcement from Chief of Staff Mark Cate, who is leaving later this summer for the private sector.
As the governor plans his trip to talk about gas tax, Americans for Prosperity are planning their own sojourn to argue against an increase:
Haslam appeared undaunted that the group that helped defeat Insure Tennessee is once again lining up against him on the gas tax.
“Have at it,” the governor said. “That’s how democracy works.”
The governor says legislatures have changed:
Haslam told reporters after the speech that once powerful institutions like lobbyists, the media, chambers of commerce and hospitals no longer carry as much sway with the General Assembly.
“We have a changing Legislature and the old ways of doing things won’t necessarily work,” Haslam said. “So I think you’ve got to be visible and present here.
“It’s just a different world,” said Haslam, a former Knoxville mayor. “You can’t rely on sending a rep to do what they’ve always done and expect the same results.”
Known for his role as a strong arm in the governor’s office, Chief of Staff Mark Cate plans to step down from his post after this summer to launch a strategic consulting and management firm, according to the governor’s office.
Cate, who began as a special assistant to Haslam, took the role of chief of staff in 2012. A press release from the governor’s office describes Cate as a top advisor, strategist and negotiator for the administration.
“Mark has been a key player and a valuable part of our team since my first campaign for governor,” Haslam said in a statement. “He is talented at keeping a lot of balls in the air at the same time and keeps us moving forward as a team. I wish him and his family all the best in his new endeavors. I will miss having him in the Governor’s Office.”
Cate managed Haslam’s initial gubernatorial campaign and, in state government, has overseen large projects including the civil service reform known as the TEAM Act, worker’s compensation reform, and the Drive to 55 initiative, including Tennessee Promise.
GOP lawmakers have quietly expressed frustration with Cate over the last few legislative sessions, describing his tactics as hardball and aggressive. Announcement of Cate’s eventual departure comes at the same time some legislators are complaining about the administration releasing details of their health plans to the media. Asked if there is a link between the two matters, Haslam spokesman David Smith said, "None whatsoever."
Cate will continue in his position until the summer and a replacement has not yet been named, according to the administration.
Nearly two-thirds of Tennesseans support Gov. Bill Haslam’s Insure Tennessee plan to expand Medicaid coverage, according to poll released by Vanderbilt University, and even a higher percent said the full legislature ought to vote on the governor’s proposal.
The poll of 1,001 registered voters launched the day after the legislature adjourned found 64 percent of those polled support the governor’s plan. Another 19 percent oppose and 13 percent indicated they neither support nor oppose Insure Tennessee.
Democrats make up the largest support for Insure Tennessee, with 85 percent of Democrats polling in support of Insure Tennessee. Nearly half, 49 percent, of self-identified Republicans also said they support Insure Tennessee, as did 42 percent of Tea Party members and 65 percent of independents.
Opposition to the program — which failed twice in legislative committees this year — largely comes from Tea Party members and Republicans. Forty percent of people who said they belong to the Tea Party said they oppose Insure Tennessee, as did 28 percent of Republicans. Another 17 percent of independents also oppose the plan, as does 8 percent of Democrats.
Seventy-eight percent of people surveyed said the full legislature should vote on the governor’s proposal, compared to 15 percent who said a vote isn’t needed.
More than two-thirds, 68 percent, of Tea Party members said they would like to see a full vote by the legislature on the plan, as did 73 percent of polled Republicans. More than four in five Democrats and Independents also said the legislature should vote.
The survey was conducted by Vanderbilt University’s Center for the Study of Democratic Institutions from Apr. 23 until May 9. The margin of error is plus or minus 4.3 percentage points.
Gov. Bill Haslam said he’s sensing additional pressure from the federal government to expand Medicaid, and he doesn’t like it.
Haslam this year failed to convince the legislature to go along with his Insure Tennessee plan to expand Medicaid to 280,000 people in the Volunteer State, but he said a recent phone call from the federal government to the Department of TennCare gives him pause.
“Obviously, I believe Insure Tennessee is the right thing to do,” Haslam told reporters. “My sense is... the way they’re approaching this feels awfully heavy handed. 'OK, well, if you don’t do that, then we’re going to restrict that, the pool money that we give you for indigent care.’”
The federal Centers for Medicaid and Medicare Services called TennCare Director Darin Gordon last Thursday to check in on the Volunteer State’s soon-to-expire TennCare waiver, according to a department spokeswoman. The call came around the same time other states like Florida and Texas received warnings that CMS could withhold funds from health care providers if Medicaid is not expanded. Haslam has asked Gordon to dig further into the federal government's messages to other states.
“I’m not a constitutional lawyer, but I have concerns about what feels like a heavy-handed approach and I’m the one that’s pushing Insure Tennessee. I don’t think that’s what the federal government should be doing,” Haslam said.
The phone call to Tennessee was not out of the ordinary, according to department spokeswoman Sarah Tanksley, who said the conversation grew from tension brewing in Florida and Texas between the federal government and the state for refusing to expand Medicaid. Tennessee's TennCare waiver expires in June of 2016.
“It wasn’t a warning from CMS or anything, but it was a beginning conversation about the uncompensated care pools in Tennessee, and how those might compare to other states,” said Tanksley. “We’re not concerned it was a warning shot or a threat or anything.”