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VOL. 37 | NO. 18 | Friday, May 3, 2013

Wins, losses despite GOP supermajority

By Robert Sherborne

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State Reps. Johnny Shaw of Bolivar, right, and G. A. Hardaway of Memphis await House Democratic Caucus leadership vote. Shaw lost his challenge for caucus chairman to Rep. Mike Turner of Nashville.

Smaller government and lower taxes were the watchwords of Republican leaders as they began this session of the state legislature in January.

With lopsided majorities in both the state House and Senate, the Republicans could do pretty much whatever they wanted.

So, how’d they fare?

They did lower taxes – somewhat.

With near-unanimous support from Democrats, legislators lowered the sales tax on food from 5.25 percent to 5 percent.

They also gave tax relief to older Tennesseans who derive income from investments.

And, they agreed to amend the state constitution to explicitly prohibit a state income tax on wages or payrolls. That amendment will go to voters next year.

But, Republicans hotly beat back another constitutional amendment that would have completely eliminated the sales tax on food.

That amendment, offered by Rep. Craig Fitzhugh (D-Ripley), the House Democratic leader, was denounced as “recklessly irresponsible.”

Noting that the proposal would deprive the state of $303 million a year in revenue, Rep. Ryan Haynes, (R-Knoxville), said, “this is how Washington conducts business. They do things on a whim and then deficits explode.

“We need to have a limited government, but we need to do it in a responsible way.”

Rep. Johnny Shaw (D-Bolivar), however, suggested the amendment would actually be the most responsible way to let Tennesseans chose how they want to be taxed.

“When it comes to food taxes and state income taxes, I think we need to put both of them on the ballot,” Shaw said. “We should say, “Citizens of the state of Tennessee, what type of taxation do you want to fund the state with? Do you want to fund it with an income tax, or do you want to fund it with a food tax?

“That would probably be the most responsible thing to do.”

Republicans were not swayed. The amendment died in committee.

On smaller government, the legislative results were mixed.

Legislators largely adopted the state budget proposed by Gov. Bill Haslam, which called for cutting the state workforce by some 300 employees, to 43,886.

But, the state budget still increased by about 1 percent, to $32.7 billion.

Republican Sen. Stacey Campfield of Knoxville, top, pushes his bill to dock parents’ welfare payments if their children falter in school. Campfield was a magnet for bad publicity during the session. In a deposition – he was being sued for libel by a former opponent – he speculated few lawmakers would have seen his online posts since ‘Most of them don’t even know how to turn on a computer.’

-- Ap Photo/Erik Schelzig, File

One reason for the increase was a host of new education initiatives. The state’s “rainy day” reserve fund was also increased by $100 million. Also, state employees got an across-the-board pay raise of 1.5 percent.

But, as Democratic leaders noted, the Republicans also created an entirely new state bureaucracy to administer workers’ compensation claims.

Such claims, from workers injured on the job, have historically been handled by trial courts when disputes arose.

To streamline the process and to lower the amount businesses have to pay for workers’ compensation insurance, such disputes will now be handled by a new administrative court within the Department of Labor and Workforce Development.

That, coupled with a new method for computing payments to injured workers, is projected to bring business costs for workers comp in Tennessee more in line with surrounding states.

Another new bureaucracy proposed by Republicans – a state “authorizer” for charter schools – was modified, and then withdrawn on the last day of the legislative session.

As once drawn, this proposal would have created a new state panel with authority to override local, elected school boards that balked at approving charter schools in their district. Charter schools are private schools funded with tax dollars.

The proposal was limited to five counties with failing schools.

In an amended version, the “authorizer” panel was removed and the override authority given to the already-existing State Board of Education.

Even then, it drew heated criticism.

State Sens. Jim Kyle (D-Memphis) and Doug Henry (D-Nashville) both wondered in the Senate Finance Committee why the bill did not call for charter schools to be located near failing schools.

“Why are you having charter schools to begin with?” Kyle asked. “Because you have failing schools. Now, what’s your solution? To put in a competitive charter school so parents have a choice.”

But if the charter school is built miles away from the failing school, parents of children at the failing school are denied that choice, he said.

Kyle voiced the suspicion that charter school companies would use the law as a pretext to locate schools in wealthy areas to “cherry-pick” good students, rather than serve the students that need the help.

Henry agreed that accessibility was key.

“For this charter school to do what you want it to, to offer an alternative, it’s got to be offered to people who can make that choice between alternatives,” he said.

“And if they’re poor folks that live downtown, they can’t make that choice if they have to go to, say, Belle Meade, to find the school. If they aren’t accessible, you haven’t accomplished your objective.”

The committee voted down an amendment offered by Henry and passed the bill to the Senate floor as written.

There, however, it died for this year, when the sponsor pulled it from consideration.

Another proposal that died would have allowed wine to be sold in grocery stores.

Currently, state law mandates that wine can be sold only in liquor stores, which are closed on Sunday. The bill would have allowed local governments to decide by referendum if they wanted to also allow such sales in grocery and convenience stores.

“The best government, the strongest government, is that which is closest to the people,” Rep. Jon Lundberg (R-Bristol), the House sponsor, told the Local Government subcommittee.

The bill would accomplish that by allowing individual communities to decide how they want to handle wine sales, Lundberg added.

And, he noted, such sales are allowed in surrounding states, where Tennesseans can go on Sundays if they want a bottle of wine.

Rep. Jeremy Durham, (R-Franklin) agreed, saying: “This is a conservative, free-market, well-thought-out piece of legislation.”

But Rep. Richard Floyd (R-Chattanooga) countered that the proposal would be “bad for small business.”

Passing the bill would “take a-third or more of the business” of liquor stores, making it impossible for them to compete.

To the surprise of many, the bill – which had the support of legislative leaders – failed to make it out of committee.

Another surprise: school vouchers failed.

The governor had proposed creating a limited voucher system, where public funds would be used to pay tuition at private schools. Haslam wanted to initially limit the program to 5,000 lower-income students who attended failing schools.

But many Republican lawmakers wanted the program expanded.

They wanted it to include families making up to $75,000 a year and to drop the requirement that students must come from failing schools.

Rather than risk losing control of the program, Haslam had his proposal withdrawn.

The governor also sidestepped an issue that stirred deep passions among many Republican lawmakers: the expansion of the state’s Medicaid program under the new federal health care law, known as Obamacare.

Many Republicans opposed the expansion, and filed legislation to prohibit it.

Democrats said this could lead hospitals to close across the state.

Under Obamacare, the federal government would initially pay 100 percent of the cost of expanding Medicaid to cover more Tennesseans who currently have no medical insurance.

In later years, that funding would be reduced to 90 percent.

But some Republicans voiced the fear the federal government will be unwilling or unable to keep its promise of continued funding, and Tennessee taxpayers will ultimately be stuck with an unaffordable bill.

Rather than accept or reject the expansion, Haslam asked the legislature to do nothing, while he pursues a third course.

He has asked the federal government for permission to use the expansion money to enroll the uninsured in private insurance plans.

Federal overseers have not given that permission, but negotiations continue. The governor could call the legislature back into special session later this year to deal with Medicaid if he can work things out with federal officials.

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