After two years of repeated failures trying to control the shape of a school voucher program, the governor is giving up on the legislation.
Instead, this year’s legislative agenda includes bills that focus on aiding adults going back to college, adjusting teacher evaluations and liability laws, transforming state-employment to mirror private sector employment and installing a tax on out of state companies.
Abandonment of the long fought-over school voucher plan — also known as Opportunity Scholarships for public school students to attend private schools — means the legislature will control much of the conversation over what any such program would look like. In the past two years the governor has run a proposal, he has either pulled the legislation because legislators wanted to expand it against his wishes or it has failed to gain enough votes in the House.
Below is a summary of the governor’s proposals for 2015, as prepared by his administration. The legislation is in addition to a trio of bills the administration filed in January adjusting the formula for teacher evaluations, tweaking the Tennessee Promise and encouraging people to become volunteer drivers for the elderly.
From the administration:
- The Community College Reconnect Grant pilot program would use a one-time payment of $1.5 million in lottery funds in the FY 2015-16 budget proposal to provide last-dollar scholarships to adults with some college credit to attend a community college. In Tennessee there are nearly 1 million adults with some post-secondary credit but no degree, and this is an additional component of the governor’s Drive to 55 initiative.
- The Educators’ Liability Trust Fund would provide personal liability coverage to teachers free of charge. While many teachers are covered through their school districts’ insurance plans, the governor heard from many in his conversations around the state that they are concerned they’re not adequately covered and teachers end up paying for liability protection at their own expense. This year’s budget proposal includes a one-time appropriation of $5 million to establish the fund to provide coverage.
- The Revenue Modernization Act would help keep Tennessee a low tax state by leveling the playing field between in-state companies and out-of-state companies doing business in Tennessee. The proposal would also seek to close certain loopholes by adapting to changes in the way products are bought and sold. The proposed legislation includes:
- Addressing “nexus” in sales and use, franchise and excise, and business taxes;
- Adopting market-based sourcing of services to determine which state counts the sale of service for tax purposes when a company conducts business in more than one state;
- Making Tennessee’s tax structure more competitive with surrounding states by changing the way a multi-state company’s income and net worth is taxed for franchise and excise purposes;
- And allowing the use of software and video games being accessed remotely to be subject to sales tax as if they had been purchased or downloaded.
- The Compensation Enhancement Act continues the administration’s focus on recruiting, retaining and rewarding a talented state government workforce by adapting longevity payments to help implement the market- and performance-based compensation plan. Since the governor took office, $139.4 million has been allocated in the state budget for salary increases, and the FY 2015-16 budget proposal includes another $47.7 million for salary increases. Under the proposal, executive branch employees would receive a permanent increase to their base salary equal to half of the longevity payment due, effective July 2015. The remaining half of the longevity payment would be reallocated to the state’s General Fund and then used to fund market- and performance-based salary increases.
- The State Health Insurance Reform legislation aims to address the rising state employee retirement health care costs and give the state flexibility to offer more competitive total compensation packages and to design benefits for state employees. Key changes include:
- The state would have the flexibility to offer a defined contribution or defined benefit to current employees for pre-65 retiree health insurance, reflecting the practice of most large private sector employers, and state and local education employees hired after July 1, 2015, would not be eligible for pre-65 retiree health insurance;
- The State Insurance Committee would have the flexibility to change the percent subsidy that is given to the active state employees by offering one basic health plan;
- After July 1, 2015, no part time state employee may be eligible for any insurance plan while current employees working 1,450 hours or more per year will be grandfathered into the plan;
- The state would not offer Medicare Supplement Insurance under the state and teacher insurance plans for employees hired after July 1, 2015.
Despite concern the governor’s plan to guarantee two years of free community college will put too much pressure on community colleges, draw students from four-year schools and create a state-level entitlement program, the House endorsed the plan 87-8.
Approved by the Senate 30-1 on Monday, the General Assembly will next send the last dollar scholarship program to the governor for his signature.
The governor has spent the last year stressing emphasis on higher education in an effort to lift the number of Tennesseans with post secondary degrees from 32 percent now to 55 percent in 2025.
Although the legislation passed easily in both chambers, four-year institutions are worried the program will funnel graduating high schoolers into community colleges and away from four-year schools but have agreed to support the legislation.
No votes on the bill came from Republican Rep. Joe Carr of Lascassas, Glen Casada of Franklin, Jeremy Durham of Franklin, Andy Holt of Dresden, Judd Matheny of Tullahoma, Cameron Sexton of Crossville, Billy Spivey of Lewisburg, and Rick Womick of Rockvale.
House Republicans steamed the governor outlined his budget cuts to the media before briefing legislators sounded off in a GOP Caucus meeting Monday night, weighing their options to avoid cutting raises for state workers and teachers and raiding funds in the governor's signature community college proposal to offset higher ed cuts.
Rep. Joe Carr, of Lascassas, wondered aloud whether lawmakers can take money the governor wants to use to fund the Tennessee Promise free community college plan toward offsetting reductions in higher education. And Rep. Matthew Hill, of Jonesborough complained that promising teachers and state employees raises then not delivering will make it difficult for lawmakers with primary election challengers to vote for the budget.
"Any time you make tentative promises about pay raises and they don't come through, of course everyone's frustrated. I'm sure the governor's frustrated, too," Rep. Glen Casada, GOP Caucus Chairman later told reporters.
Finance Chairman Charles Sargent, who knew details of cuts the administration plans to unveil today, threw cold water on suggestions from the 71-member caucus' meeting to thwart the governor's community college plan. Sacrificing pay raises represents one of the largest cuts the state can use to bridge the budget gap, he said, and funding for the governor's Tennessee Promise plan can only be used in limited ways.
"We're not funding any museums this year or anything like that," said Sargent who said none of the special funding requests lawmakers have asked for will make it into the budget. Lawmakers typically build at least some local projects into the budget, like two years ago when Lt. Gov. Ron Ramsey wanted to help fund the Birthplace of Country Music Museum.
It's up to the legislature to decide how to spend the state's money, Casada told reporters. "I think you're going to see a lot of members looking at the budget a little bit closer, trying to come up with ways to maybe fund some of these pay raises. Because it's important to us that we give something to state employees and teachers, they are the folks that make the state run."
Gov. Bill Haslam is giving a little on his free community college plan after negotiating with four-year colleges and universities concerned about lowering amount of the HOPE Scholarship.
“To say we don’t still have some concerns would not be accurate,” said Claude Pressnell, president of the Tennessee Independent Colleges and Universities Association, in an email to the Post. He and leaders at four-year schools have expressed concern that the Tennessee Promise plan offering last-dollar scholarships for graduating high schoolers to attend two-year community colleges or technical schools would discourage attendance at four-year institutions.
Students can now qualify for a $4,000 scholarship for up to four years if they meet benchmarks for good grades or ACT scores. Under a version of Gov. Bill Haslam’s proposed Tennessee Promise that advanced from the House Education Committee Tuesday, the scholarships will now total $3,500 for each of the first two years a student attends a four-year college or university and $4,500 awards for the second two years.
The governor’s original proposal set the HOPE Scholarship at $3,000 for the first two years and $5,000 for the second two.
“We will be watching the impact of the TN Promise and the change in the lottery scholarship amounts over the years to come," said Pressnell. "Our member colleges and universities do an incredible job of making college affordable with as little debt as possible. We want to make sure that all students make the right college choice so that they can be most successful in college and best prepared for a lifetime. This is the most important investment of time and resources that a person makes in a lifetime. Students and families shouldn’t simply settle for an academic path based on price.”
The bill now heads to the House Government Operations Commission and faces a hearing in the Senate Education Committee Wednesday.
Treasurer David Lillard can't yet vouch on whether the math works on the governor's free community college program, reports WPLN.
So do the numbers add up? Lillard says “no comment.” Even though he oversees the lottery reserve funds in question, he hasn’t been closely consulted by the governor.
“I don’t think that’s unusual at this point in time and all,” he said Thursday. “But as the bill works its way through the General Assembly, I’m sure I’ll be consulted by members of the legislature about it.”a
Asked why the treasurer has been relatively out of the loop, a spokesman for the Haslam Administration said a meeting was set up for Friday. He added this: “We feel good about the math.”
While excited about his pending promise for high school graduates to get free access to community colleges, Gov. Bill Haslam said he’s open to negotiation over exactly what that program should look like.
He said he’s been peppered with questions and concerns over the last four days since announcing his “Tennessee Promise” plan, like how this would effect four-year schools, how the costs would work over time and ensuring the quality of community colleges.
“Some very fair questions are already brought up about that. We welcome most of the debate and the discussion about how to make our proposal better,” he told he told a room of reporters, editors and publishers Thursday at an event hosted by The Associated Press and the Tennessee Press Association in Nashville.
As proposed, the program would first kick in for the high school class of 2015, covering their tuition and fees left over after students have applied to federal grants. Funding would come from the state’s lottery reserve fund and be invested in an endowment.
Haslam later elaborated about the program, telling reporters he’s open to changes in the details so long as the legislature sticks to the bottom line.
“We’re open to ideas that might improve it as long this idea — that we can say that every Tennessean, that you can have two years of community college free — as long as that can happen, we’re really committed to seeing this work through,” he said.
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