State Senate organizes business as
106th General Assembly convenes

(NASHVILLE, TN), January 15, 2009 — The 106th General Assembly was gaveled to order this week in Nashville as the state’s 132 lawmakers took the oath of office, elected officers and organized to begin the business of the 2009-2010 legislative sessions.

Families and friends crowded the Senate chamber and watched as the sixteen newly elected or re-elected members of the State Senate took the oath of office, which was the first order of business during the organizational session.

On a personal note, I was honored to have my wife, Kay; daughter and son-in-law, Kathleen and Ryan Thomas; and, many friends from Sevier and Blount Counties present in the Senate Chamber and gallery for the event.

The second order of business was the re-election of Senator Ron Ramsey as Lt. Governor. Ramsey, who also serves as Speaker of the Senate, is serving his second term as Lt. Governor.

General Assembly elects new
Secretary of State, Treasurer, and Comptroller

The opening week of the 106th General Assembly was also marked by election of the state’s constitutional officers, the secretary of state, treasurer and comptroller. The state’s constitution provides that the legislature selects the three offices in a joint session during the organization session of each General Assembly, which occurred on Thursday.

Elected and sworn in were Tre Hargett as Secretary of State, David Lillard as State Treasurer, and Justin Wilson as Comptroller. Hargett will serve a four-year term, while Lillard and Wilson will serve two-year terms as provided by the Constitution.

The secretary of state has oversight over elections and businesses in the state. The comptroller audits state agencies and county governments to ensure they are run well. The treasurer keeps track of the state’s coffers, its investments and its pension funds. The three officers also serve on several key boards together, such as the State Building Commission, which maintains all state-owned public buildings; the Funding Board, which helps guide budgeting; and the Tennessee Housing Development Agency, which builds affordable housing.

Hargett is a former State Representative and served as House Minority Leader before becoming Director of the Tennessee Regulatory Authority. Lillard, an attorney and past president of the Tennessee County Commissioners Association, has extensive experience in municipal finance issues, securities and bonds, and investment oversight. Wilson is former Deputy Governor of Tennessee and has vast experience with fiduciary matters in law, business and charitable organizations.

Preview of the 2009 Legislative Session —
Financial issues to dominate legislative session

With organizational tasks out of the way, the 106th General Assembly can now get to work on the important issues facing Tennessee as we start this new legislative session.

Topping this year’s agenda will be consideration of a balanced budget in one of the worst financial years faced by lawmakers in a long time. Tennessee’s year-to-date collections for five months are currently $407.8 million below the budgeted estimate. The state could be left to deal with as much as $780 million to a $1 billion shortfall by the end of the budget year in June.

There are still many unknown factors regarding finances remaining for the year ahead, including the level of financial aid that might be forthcoming to the states from the federal government. Such aid would provide the state with a “softer landing” in light of the cuts needed to bridge the gap in revenue shortfalls for the 2008-09 fiscal year.

One comparison for aid that could be sent to states is a stimulus package disbursed in 2003 which included increased matching rates in federal programs that were stretched out over a two-year period. President Obama has also indicated he will put forth an infrastructure-building program to states to stimulate job growth. The Tennessee Department of Transportation has a backlog of projects that are in need of construction.

Tennessee could benefit from more than $268 million in federal money from such an economic stimulus bill. The plan under discussion has a total package of $12.8 billion to go to states for the infrastructure-building program. Such an infusion could stave off other efforts to raise road money. It is estimated that almost $12 billion is needed for road projects in Tennessee for the next decade. Presently, the state’s Department of Transportation only spends the funds that are available through its dedicated revenues derived from gas taxes, highway user fees, and federal funding.

Similarly, one of the most concerning trends affecting our state’s budget is the rising unemployment rate. Most lawmakers agree that Tennessee must be aggressive in bringing new jobs to better weather the economic storm. This makes economic development and job creation a top priority of the upcoming legislative session. Job losses have accelerated to around 7 percent. That number could rise to 8.5 percent to 9 percent before the economy turns around according to the state’s leading economists. Almost all sectors of jobs are in decline, bringing forward the issue of how the state’s unemployment fund will fare if the economy does not turn around.

Expect the solvency of the fund to be a topic for discussion this session when the General Assembly convenes. Tennessee’s unemployment fund had a balance of about $517 million as of November. Experts say a drop below the $400 million level would cause great concern.

Finally, legislation is expected to be introduced again this year to provide a two-thirds majority to override Tennessee’s constitutional amendment that requires state spending to stay within the rate of growth of Tennessee’s economy. Called the “Copeland Cap,” this amendment to the state’s constitution was approved by Tennessee voters in 1978. It stipulates that state spending cannot grow faster than the rate of growth of the state’s economy, measured by the growth of incomes of Tennesseans. The goal is to keep spending growth at a level where the people’s income growth can afford it without a tax increase. Currently the cap can be overridden with a simple majority vote.

The state’s economic downturn and the rise in unemployment provide legislators with serious challenges. The General Assembly has adjourned until February 9, 2009, to assign offices and await budget details. The governor is expected to deliver his budget address at that time.

This entry was posted on Friday, January 23rd, 2009 at 7:24 pm and is filed under Capitol Updates, Featured News.
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