Democratic Leader: At Least a Week before a State Budget

The chairman of the House Democratic Caucus expects at least another week before the Tennessee General Assembly passes a state budget for next year.

Nashville Representative Mike Turner says Democrats and Republicans, especially Senate Republicans, are far apart on how to carry out cuts to the state spending plan.
Turner says Democrats want to save some programs that Republicans want to cut.

One problem is that federal stimulus money runs out in two years, still leaving a massive amount of cuts to be made if the budget is to be balanced at that time. Representative Turner:

“We could lay off as many as 1400, two thousand people next year without blinking an eye, if things don’t start turning around, and most economists are saying that it won’t start turning around until the following year.”

Democratic leaders will meet with representatives of the Tennessee State Employees Association Thursday to find ways to spread out some of the pain of layoffs. Turner says democrats still want to investigate furloughs for all employees as opposed to laying many off.

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If the state House and Senate manage to pass a budget, Turner says working out differences in the two versions may take a week.

How far apart are the two parties? When the Democratic caucus chair tried to answer that problem, he had to frame his answers so that it was clear the two parties haven’t yet shared their preferences with each other yet.

“I’ve heard they’re [Republicans] gonna try to accelerate some of the cuts. I’ve heard they’re gonna …. Take pre-K [programs] and pay for it out of lottery reserves, which .. in effect will kill that program in about a year or so, ,…because lottery reserves are gonna start running down, they’re predicted to start going down too, so we can’t start funding pre-K out of lottery reserves. We’re totally against that. We’re locked down against that one. We’re not for that at all. I hear that’s gonna be in their budget.”

Turner held a press conference after his caucus held a closed-door meeting. Democrats still appeared to be divided on several budget issues, according to members who attended the meeting.

But Republicans, speaking to reporters on background, say their caucus is also still divided on specifics.

Both Democrats and Republicans say that Republicans still want to eliminate bonds – that is, borrowing money – to be used to rebuild bridges.

The Tennessee Center for Policy Research, a conservative think tank, issued a position paper today on the “technical corrections bill,” part of the package of administration bills that makes up the state budget.

TCPR called the 67-page bill “murky” and accused the administration of trying to resurrect tax measures that had earlier failed in the legislative process.

TCPR introduced its analysis of the technical corrections bill with these words:

Each year, the Tennessee Department of Revenue (Department) files an extensive bill in the state legislature that it sells as a “technical corrections” bill designed to make clarifications and corrections to the state tax code. However, the vast majority of this year’s bill enacts new taxes, increases existing taxes, and expands the scope of the Department’s authority over Tennessee taxpayers.

In a general news release, the conservative group said the bill “would impose millions of dollars in new tax increases on Tennessee families and businesses.”

In relatively straight-forward language, the group described the bill:

Some key components of the 67-page bill include:
• A revival of a measure to kill the non-farm Family-Owned Nonprofit Corporate Entities, or FONCE, tax exemption. This effort was rejected by the General Assembly last year;
• New fines for Real Estate Investment Trust and Excise and Franchise tax filings;
• A bundle of new taxes on telecommunications services;
• A series of taxes on complimentary items hotels provide to guests, such as linens, bathroom supplies, and continental breakfasts;
• Extension of the 10 percent local privilege tax paid by spectators at Nashville’s L.P. Field, meaning that the privilege tax will not go away once the stadium is paid off; and
• A new tax that levies a $2,500 per game privilege tax on all NBA and NHL players that play in Tennessee.

Those are many of the same issues that individual Republicans have complained about concerning the technical corrections bill – although GOP House members haven’t made a detailed analysis public.

Individual Republicans, speaking on background, indicate that Republican leaders are particularly opposed to
• raising the tax on long-distance phone service for businesses to the same 9.25% that residential customers pay, and
• taxing telecommunication boxes used by cable television companies to provide video service to homes.
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The technical corrections bill is HB 2275 Fitzhugh/SB 2318 Kyle.