Shaky economy extends legislative session

On April 7, 2008, in News 2008, by Mark Norris

By John Rodgers,
April 7, 2008

Once optimistic hopes of adjourning this year’s legislative session in April have been dashed, and lawmakers say the national economy is to blame for extending their stay.

Usually, the state Legislature adjourns in late May, with the occasional venture into June and more rarely, July.

This year, state lawmakers, particularly Senate Republicans, were targeting late April as an appropriate departure date. With limited taxpayer money to spend and therefore a limited agenda, plus an election year coming up, there was some hope.

But last week, hope of adjourning in late April became completely unrealistic as an important meeting of the State Funding Board was set for late this month or early May instead of early April.

Lawmakers rely on the Funding Board to estimate how much tax revenue the state will take in, and therefore how much money it will have to fill up line items in the budget. The state’s annual spending plan is the only required bill the General Assembly must pass each year.

The meeting was pushed back, and therefore the General Assembly’s adjournment, because leading lawmakers say Gov. Phil Bredesen needed more time to formulate cuts or changes to his budget as a result of the worsening economic situation.

Senate Republican Leader Mark Norris (R-Collierville) said Bredesen told legislative leaders Wednesday over breakfast that he needed two more weeks.

“The economy is sour, and the governor thinks it’s worse than he anticipated,” Norris said. “So he wants a do-over. And, you know, we do the best we can to accommodate the executive branch.”

So far this fiscal year, the state budget’s general fund has about a $211 million shortfall.

As a result, Bredesen will likely have to alter the budget he presented in January, when the economic picture wasn’t as dark.

State employee pay raises could be on the chopping block. When the budget was rolled out in January, State Finance Commissioner Dave Goetz said state employee pay raises, currently slated at 2 percent, would be one of the first things considered to be cut.

The Bredesen administration says the Funding Board meeting was set for later than expected to give more time for the state to know how much business tax revenue it would collect, said spokeswoman Lola Potter.

The deadline for franchise and excise taxes is April 15.

“We just feel like, especially when 25 percent of our revenues are the franchise and excise tax, and it’s even less predictable than sales tax, that we need to have a good idea about what they’re going to be before we decide a budget,” said Rep. Craig Fitzhugh (D-Ripley), the chairman of the House Finance Committee.

But because of the shaky revenue picture delaying the session’s close, Tennesseans will spend more tax dollars paying lawmakers for their work.

Taxpayers spend about $100,000 each week the Legislature is in session on per diem payments and mileage expenses, said Connie Frederick, the director of the Office of Legislative Administration.

Last year, during fat financial times when the state had a windfall of surplus tax revenues, the Legislature didn’t adjourn until June 12, said Eddie Weeks, a legislative librarian.

This year, lawmakers estimate they can finish about mid-May.

Sen. Douglas Henry (D-Nashville), a member of the Senate since 1971, said the Legislature’s delay is “genuine this year.”

“This year, it’s a national financial problem,” Henry said. “In other years, it’s just the nature of the case, the difficult bills are argued back and forth until we get ready to go home and then vote upon them.”

Controversial measures still on the Legislature’s agenda this year include lottery scholarships, K-12 and pre-K education spending and statewide television franchising rights.

While they are in session, lawmakers cannot raise money for their re-election campaigns until after May 15.

House Speaker Jimmy Naifeh (D-Covington) said he never bought into being able to adjourn in late April, although he had said recently that was the goal.

“My position has been we are going to finish up when we get through,” Naifeh said.

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