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PSN on July 3, 2008 - 11:02am
Lawmakers made notable gains on several fronts, with new progressive leadership elected in 2006 making good use of their positions:
Health Care: Lawmakers enacted the HealthFirst initiative (SB 540) requiring insurers to offer a standard "wellness plan" to small businesses with targets for premiums to be priced at 10% of the previous year's state median wage, roughly $262 per month. The plan will cap a person's out-of-pocket medical expenses and seeks to achieve cost savings by emphasizing preventive measures that are typically available only to large businesses. The legislation also outlaws insurers from developing competing plans designed to undercut the new program.
Budget: Facing lower revenue projections, lawmakers earlier in the year approved $22 million in cuts to state health programs and hopsital payments as part of a $50 million package of cuts to the 2008 state fiscal year budget. Considerable acrimony marked a special session in early June to address a potential $180 million budget shortfall in the two-year $10.3 billion state budget. Democratic majorities and Governor Lynch resorted to several measures to balance the books in the current fiscal year and begin to address a possible $83 million shortfall next year. Steps included: $30 million in budget cuts, an increase in the state's low cigarette tax, a cut in the wine discount for retailers who purchase wine from state liquor stores, and a potential $80 million in borrowing over two years.
Clean Energy and Environment: New Hampshire joined the 10-state Regional Greenhouse Gas Initiative (RGGI), which creates a market-based, "cap and trade" program among Northeast states to reduce carbon dioxide emissions from regional power plants. Funds raised from the purchase of "allowances" by fossil fuel power plants would help pay for energy savings and efficiency programs.
Payday Lending: In a victory for consumers, lawmakers passed a 36% interest rate cap on all small loans, a measure that the payday lending industry strongly opposed.
State Pension Overhaul: Lawmakers passed a temprorary overhaul of the state pension system while ceding more difficult decisions concerning future cost-of-living increases and how to help all public retirees afford health insurance to two new commissions. Steps include consolidating funds to keep state and local contributions to more manageable levels, a 1.5% cost-of-living increase for retirees, and a cap on pensions of 100% of pay.
Infrastructure: Governor Lynch signed a 10-year plan to improve the state's infrastructure. The $2.1 billion plan, funded with state and federal funds, focuses on rehabilitating existing roads and bridges; although a potential cut in federal funds and the effect of oil prices on construction costs are presenting early problems for the plan. And, the state continues to move forward in the development of commuter rail.
State lawmakers adjourned for the year passing a drastically reduced state budget. Governor Phil Bredesen and lawmakers slashed proposed state spending and enacted a $27 billion spending plan that is 1.2 percent less than the current budget. The appropriations bill authorizes raids on several reserve funds and offers over 2,000 employees voluntary buyout packages. Overall, the legislative season proved to be a mixed bag for Tennesseans. After several years of state coffers flush with cash, Governor Phil Bredesen and lawmakers faced a steep drop-off in revenues this year, forcing priorities to be scaled back or even dropped, as well as sharp budget revisions.
Health Care: The governor and elected officials in both parties herald passage of a bill expanding long-term care options for the elderly and disabled TennCare recipients, making it easier for them to get care at home rather than going into nursing homes.
- The Long Term Care Community Choices Act of 2008 (SB 4181) expands access to home and community-based services for Tennessee's elderly and disabled by restructuring the long-term care system and reallocating funding for less intensive and more affordable alternatives to nursing home care.
- SB 1157 establishes a pilot program for a “self-directed care program”? whereby individual patients would receive a monthly budget based on their need, and could use this money to hire personal assistant services, make home modifications, and other necessary expenses. It would provide counseling and financial assistance to patients to help them plan and manage their responsibilities.
- Additionally, SB 4014 allows small businesses of 2 to 50 employees to pool together for the purpose of negotiating better insurance rates, creating a small business cooperative. The bill is designed to encourage more small employers to purchase health insurance and to give them predictability and stability in health-insurance rates.
- With the enactment of SB0611 / HB0653 Tennessee lawmakers broke a two-year impasse over how to spend excess lottery revenues, approving changes to lottery-funded college scholarships which will make it easier for students to maintain their HOPE scholarships while expanding opportunities to thousands of others.
- SB 2008 provides educational resources and opportunities to students by way of the Internet in a “virtual”? classroom setting, while maintaining these programs within the public school system. The legislation will help local schools tap into funds available through grants and donations to provide start-up money for a virtual education program.
- SB 4039 uses a portion of the excess funds to set up an “Energy Efficient Schools Program”? aimed at helping schools save money on their energy bills.
- SB 3459, the Racial Profiling Prevention Act, strongly encourages all local law enforcement agencies to adopt written policies to prevent racial profiling by 2010. Law enforcement organizations will have over 18 months to help generate model policies. The bill also provides assistance to individual law enforcement agencies.
- HB 1442 prohibits members of state or county election commissions from serving as campaign manager or treasurer of any political campaign during their time on the commission. The bill originally prohibited commission members from playing any "leadership role" in a campaign and also prohibited commissioners from endorsing candidates, but was narrowed by an amendment in the House.
- SB 3839 removed exemptions from jury duty in favor of a general “hardship exemption”? and reforms administration of local jury pools.
- HB 1256 was a resounding victory for election integrity advocates. The Voter Confidence Act will dramatically overhaul the state's voting system by requiring the use of optically scanned paper ballots, establishing post-election audits of election results and prohibiting the use of voting technology with wireless communication abilities. This legislation was drafted largely in response to a report by the Tennessee Advisory Committee on Intergovernmental Relations that outlined the dangers of unverified electronic voting and the tireless work of Gathering To Save Our Democracy, a grassroots election integrity group.
- After two years of avoiding taking a stand on open records and open meetings, the legislature passed SB 3280, a watered-down “open records”? law to make it easier for Tennesseans to get to public documents, including an expansion of the definition of "open records," establishing a schedule of reasonable charges to citizens for copies of public records, a requirement that open records requests must be fulfilled or denied within seven days, and a requirement that all denials must be accompanied by a description of the "basis for denial."
On the negative side, Tennessee passed HB 1421, one of the least consumer friendly statewide video franchising bills to date. The legislation allows providers to define and cherry-pick attractive areas of services, gives them 3 1/2 years to make service available to a measly 30% of the households in their franchise area, and has odd formulas that let franchise holders count certain households twice or even four times. Additionally, the Tennessee's bill takes away municipal power and puts residents' access to Public, Education, and Government stations at risk.
Other positive environmental and ethic reforms, along with a measure that would have increased broadband and cable build-out in the state, were defeated. Although environmental issues were in the forefront of this year’s General Assembly, most initiatives, ranging from Governor Phil Bredesen's administration's efforts to regulate rock mining and environmentalists’ attempts to ban mountain-top coal mining, were unsuccessful. Budget shortfalls forced the scrapping of a major water planning bill and proposed new land acquisitions. Additionally, the cable industry’s lobbying blitz succeeded in killing efforts by Chattanooga’s public power provider, EPB, to expand its ability to offer cable and broadband outside its service area. On the positive side, a nasty bill aimed at stopping same sex couples from adopting was defeated.
Special Sessions: NV, WV KY, and WI
Nevada, West Virginia, Kentucky and Wisconsin recently wrapped up special sessions to address budget shortfalls.
Nevada: Governor Jim Gibbons called the Legislature into a rare special session to address the state's budget woes. A housing crisis and slowing tourism industry have left the state facing a $1.2 billion shortfall in the current two-year budget cycle. Lawmakers and the governor already have slashed operating budgets, delayed building projects and drawn down the rainy day fund to make up for $914 million of the gap. Under legislation approved during the special session, the remainder budget deficit will be closed by an additional 3.3 percent cut - $106 million - in reductions to agencies' operating budgets. While legislators approved a mixture of budget cuts, including $48 million from textbooks and instructional supplies for K-12 education, they were able to avoid deferring a four percent cost-of-living raises that teachers and state workers were promised effective July 1. Governor Jim Gibbons has until July 9 to act upon legislation that reaches his desk.
West Virginia: The West Virginia Legislature held two special sessions this year, finally adjourning on June 28. In the second special session, lawmakers breezed through Governor Joe Manchin’s laundry list agenda. The Governor has until July 19 to act upon legislation that reaches his desk.
- HB 218 puts a freeze on the variable rate component of the gasoline tax for the 2009 calendar year.
- HB 210 appropriated $25 million to deal with the transfer election of pensions from the Teachers’ Defined Contribution system to the Teachers Retirement System.
- HB 216 allows certain state employees, hired before July 1, 2001, who have accrued at least 65 sick days to trade their sick days for cash in an effort to ease debt from members of the Public Employees Insurance Agency. Eligible employees must keep at least 50 days in their accrual accounts. Those meeting the requirements will get paid 25 percent of their daily compensation for each traded-in sick day.
- HB 219 limits the influence of corporations on elections by requiring special interest groups to disclose their funding sources when running advertisements for or against political candidates.
Other appropriations, including $5 million to upgrade the state’s ancient computer system, were passed without much fanfare.
Kentucky: In a special session, the Kentucky General Assembly passed a measure altering the state's chronically underfunded pension system ”” though not without recognizing that financial problems still loom. The pension legislation raises the age of retirement and service requirements for state workers hired after September 1 and limits the annual cost of living increase to one-and-one-half percent. Additionally, the legislation directs future General Assemblies to adhere to a funding schedule to increase the state's payments into the Kentucky Retirement Systems by about $52 million each year. Thankfully, the legislature did not approve controversial proposals to undermine existing defined benefit pensions for state employees in favor of "defined contribution" programs, although a working group appointed by Governor Beshear will be studying that and other proposals related to retiree benefits.
Wisconsin: With gubernatorial veto-power slightly curtailed by voters in an April 1 election, Governor Doyle artfully crafted three revisions to the budget repair bill passed by the legislature - which the legislature did not override. He increased spending cuts from $69 million to $270 million, in part by tapping into the state transportation fund, to the consternation of some legislators. Doyle also: refused to go along with a delay in a $125 million payment to public schools; increased the emergency fund from $25 million to $100 million; left alone $20 million to implement the Real ID Act; approved $18.6 million more for child care subsidies; and, struck down a property tax exemption for low-income housing amid legal disagreements with lawmakers over how to implement exemptions. Calling it "not perfect but needed", State Sen. Jon Erpenbach brought attention to a bright spot in the budget repair bill - a provision to end a corporate tax loophole by requiring "combined reporting." This sensible reform requires multi-state corporations to list profit reports for all subsidiary companies together on state tax forms to prevent companies from hiding profits through phony transactions among different corporate entitites.
During the special session, lawmakers also made Wisconsin the 5th state to ratify the Great Lakes Compact. The Compact protects the Great Lakes from future water diversions and authorizes Great Lakes governors to manage water diversions. According to Governor Doyle, the Great Lakes generate $55 billion in tourism and $377 million in personal income for Wisconsin and the greater Midwest. Ohio, Michigan, and Pennsylvania have yet to sign the Compact, while the other Great Lakes state and provinces have signed it.
As poor families struggle with the rising costs of oil, a timely report by the National Center for Children in Poverty emphasizes that current U.S. measures of "poverty" are outdated, based on assumptions from the 1960s that ignore the disproportionate rise in the costs of housing, child care, health care, and transit since the official "poverty line" was created. A more realistic "basic needs" budget would require time the income for a family of four that the current poverty line assumes is needed. The Economic Policy Institute highlights an alternative measure of poverty by the National Academy of Sciences that finds that 16 million more people are in poverty compared to official measures.
In Subsidizing Sweatshops: How Our Tax Dollars Fund the Race to the Bottom, and What Cities and States Can Do, Sweatfree Communities provides in-depth case studies of 12 factories in nine countries that produce public employee uniforms for nine major uniform brands. The report details how state and local governments are joining the Sweatfree Consortium to help them prevent purchasing from sweatshops by investigating factories and creating a market for change.
Ridiculing the idea of offshore drilling as a solution to U.S. gas price woes, the Center for Economic Policy Research in a brief finds that if Congress had continued to increase fuel efficiency standards over the last 22 years, we would currently have more than sixteen times the savings in oil consumption than what Senator McCain's plan promises to accomplish in 20 years by drilling offshore in protected areas.
Expanding Medicaid to insure low-income families is less costly than expanding private insurance, according to research highlighted by the Center on Budget and Policy Priorities. This research shows that both administrative costs and out-of-pocket expenses for those insured are lower under Medicaid and SCHIP than under private insurers.
3 Steps Forward
2 Steps Back
The Stateside Dispatch is written and edited by:
Nathan Newman, Policy Director
J. Mijin Cha, Policy Specialist
Julie Schwartz, Policy Specialist
Christian Smith-Socaris, Policy Specialist
Adam Thompson, Policy Specialist
Austin Guest, Operations Manager
Marisol Thomer, Outreach Coordinator
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