February 19, 2009

Impact of Stimulus Package headlines
Capitol Hill Week

Budget issues continued to dominate legislative discussions on Capitol Hill this week, as more of the “fine print” regarding the federal stimulus bill was revealed. Finance Commissioner Dave Goetz told members of the Senate Finance Committee that they are still studying the massive bill to see what strings are attached to the $3.8 billion that Tennessee would receive under the $787 billion federal spending package.

“What we’re trying to do is to make sure we don’t panic the way Congress did,” said Senate Majority Leader Mark Norris (R-Collierville). “We need to look very carefully at what money is available and what strings are attached.”

Goetz repeatedly cautioned state lawmakers that the federal money to begin, restore, or expand state programs would not be replaceable by the state in two years, prompting one lawmaker to call December 2010 a financial “Armageddon.” He also began to list the requirements for receiving funds which included a mandate to restore cuts made since 2006 to higher education in Tennessee. The action would allow the state to receive over $500 million for the state’s colleges and universities over the next two years.

Earlier this year, Governor Bredesen had asked colleges and universities to prepare for a possible 15 percent reduction in their budgets. The governor cut state funding to higher education by $58 million earlier this year due to a budget gap, and had plans to reduce it by $180 million in the upcoming fiscal year, which begins in July. In order to access the funds, Goetz told the committee that they must come up with $250 million per year for higher education. This could mean that there would only be around $200 million left for K-12 education of the $771.6 million slated for education-related expenditures in Tennessee’s stimulus package.

Asked if some of the $50.3 million slated for K-12 school improvement money could be used to replace dilapidated portable classrooms, Goetz said the money could not be used for that purpose. School construction money can only be used for renovation, repair and “green energy” saving projects. Other education money in the package for Tennessee includes $229.4 million for special education, $174.2 million for Title I grants to local schools and $6.6 million for early childhood intervention programs. In addition, $14 million will go to the Head Start program which also is an early childhood intervention program.

Goetz said the state will receive a 6.2 percent increase in the federal match rate for Medicaid. This would bring the federal government’s share in funding the health-related expenditures for those who are Medicaid-eligible to 70 percent.

The stimulus package for transportation needs was discussed in the Senate Finance Committee, as well as the Transportation Committee this week, where members were told that $572 million would be available for road and bridge projects. Transportation Commissioner Gerald Nicely was questioned about how the projects funded with stimulus money would be prioritized. Nicely said that language in the legislation gives preference to sending the transportation money to “economically distressed areas” with high unemployment. Nicely also said they will be utilizing a list of priority projects that are “shovel ready” but still await funding. Some of those projects, however, may not be in areas listed as economically distressed.

Nicely told the committee that he expects to have the transportation projects under construction within the first 120 days. State and local governments have been working to get the project “shovel ready.” The projects must be eligible for federal funding and be complete within three years.

On unemployment, Goetz said the federal stimulus package will not help “shore up” the state’s weakening Unemployment Trust Fund. The trust fund has been stressed by the demand for benefits due to rising unemployment.

The governor has 45 days to make application to the federal government for the stimulus money. Goetz said that Tennessee’s revenues are continuing to deteriorate, making the job of balancing the state budget an increasingly difficult job. The administration must go back to the drawing board to revise their original budget draft to include the federal mandates in the stimulus package. The new budget proposal is expected by mid-March.

Joint House and Senate Environment and Conservation Committees hear testimony on TVA coal ash spill and clean up

A joint meeting of the Senate and House Environment and Conservation Committees heard testimony on Wednesday on the clean-up efforts of the December 22nd coal ash spill in Kingston, Tennessee. The accident released more than 5.4 million cubic yards of ash into the river from an on-site holding pond at the Kingston Fossil Plant. Fly ash is a fine, glass-like powder recovered from gases created by coal-fired electric power generation. U.S. power plants produce millions of tons of fly ash annually, which is disposed of in landfills or retaining ponds.

“This is one of the most significant disasters in Roane County in almost a century,” said Senator Ken Yager (R-Harriman), Vice-Chairman of the Senate Environment Committee. Yager’s legislative district includes the site of the coal ash spill. “We want to make sure the state realizes the size and seriousness of this spill which is unprecedented in our state.

Tom Kilgore, CEO of TVA, told the Joint Committee that the cause of the massive accident, which covers more than 300 acres of surrounding land and water, is still being investigated. Kilgore has been working with Deputy Conservation and Environment Commissioner Paul Sloan as TVA constructs a plan to remediate and restore the site, as well as prevent such accidents from occurring in other localities where coal fly ash is stored.

Sloan said the Tennessee Department of Environment and Conservation has been on site in Roane County since the spill occurred. They have been sampling public drinking water systems to assess whether the raw water entering and the finished water produced by the Kingston Water Treatment Plant meets public health standards. Sloan said the samples received to date indicate municipal water supplies are safe, even though aquatic life at the site of the spill has been destroyed.

Yager asked both Sloan and Kilgore for commitments to continue clean-up efforts and monitoring the spill several years down the road. Both officials pledged to continue the ongoing water quality monitoring and air quality assessments. The water quality monitoring within the major waterways impacted by the ash slide, includes the Emory River, Clinch River and Tennessee River. The Department of Environment and Conservation has also consulted with the Tennessee Department of Health to provide public health guidance and recommended precautions for citizens that come in contact with coal ash.

Moving to the cleanup and safe disposal of recovered coal ash at the site of the spill, Kilgore said TVA is working to get the ash sludge “out of the river as quickly as we can.” The fly coal ash contains a small amount of arsenic, which means it must be treated as a “hazardous substance” as it is moved. This means the ash, which is 85 percent water, must be “de-watered” before either being moved to another site or buried. Engineers are working to prepare the comprehensive plan to remove the sludge, which is expected to cost TVA between $525 to $825 million.

The state is looking at the possibility of using the dry coal ash in concrete and other products. Fly ash is an inexpensive replacement for a type of cement used in concrete. It is also used as an ingredient in brick, block, paving, and structural fills.

Expect the Senate Environment and Conservation Committee to continue to monitor the progress of the clean up and environmental impact of the spill during the remainder of this legislative session.

Anti-bullying bills debated in Senate Committees

Two anti-bullying bills sponsored by Senator Diane Black (R-Gallatin) were debated in Senate Committees this week. The bills include one approved by the Senate Education Committee aimed at strengthening a Tennessee law requiring each Local Education Agency to adopt a policy that prohibits harassment, intimidation, or bullying. The bill, SB 283, makes the varying policies implemented by local education agencies across the state under the 2005 bullying law more consistent by requiring 13 standards that must be included in each system’s anti-bullying policy. That law was also sponsored by Senator Black.

“Bullying is a widespread problem among students nationwide,” said Senator Black. “Research indicates that approximately 160,000 students avoid school every day for fear of being bullied.”

Almost 60 percent of boys who were classified by researchers as bullies in grades six through nine were convicted of at least one crime by the age 24, at which time, 40 percent of them had three or more convictions. In 2002, a report released by the U.S. Secret Service concluded that bullying played a significant role in many school shootings and that efforts should be made to eliminate bullying behavior.

The other anti-bullying bill, SB 113, would address a growing concern of “cyberbullying.” The bill would broaden the Class A misdemeanor for harassment to include recklessly intimidating a person under 18 by any means of communication. This includes bullying by e-mail or over the Internet.

“Technology has now given way to cyberbullying, which challenges the traditional schoolyard bullying,” added Black. “New studies have found that approximately 30 percent of students in grades six through eight reported they recently had been cyberbullied or had cyberbullied another person at least once.”

“No child should be afraid of going to school for fear of being bullied. The research clearly shows it is not just about a little school yard teasing anymore. Such action has far-reaching consequences on the individual and on the environment it effects for learning, attendance, school safety, and crime,” she concluded.

Debate will continue on the bill next week.

Issues in Brief

Open Records — In committees this week, the State and Local Government Committee heard a presentation from Office of Open Records Counsel Ann Butterworth regarding how the new law, which was passed during the 2008 legislative session, is working. The new law came from the work of a Special Study Committee chaired by Senator Randy McNally (R-Oak Ridge). Butterworth said the Office of Open Records Counsel assists in obtaining public records from local government, both in guiding citizens to correct offices or officials and in working to resolve disputes regarding access to public records. Her office has been working to promote education and awareness of the Tennessee public records laws through direct outreach and through coordination with existing organizations.

Lottery Scholarships – In the Senate Education Committee, lawmakers heard testimony from Tennessee Education Lottery Scholarship officials who said 10,000 new students have been added to Tennessee’s lottery scholarship as a result of legislation passed last year. The new law extended the 2.75 grade point average (GPA) requirement for students to maintain the HOPE Scholarship through 72 hours at which time the student can benefit from a “fresh start” provision. That provision allowed students to use their current semester average, rather than the cumulative average, in obtaining the 3.0 needed to continue the scholarship into the senior year. It also provided scholarship opportunities to non-traditional students, military veterans, those who are dually enrolled in college and high school, students seeking medical degrees who agree to serve rural areas, and foster children.

Answering a question from Senate Education Chairman Dolores Gresham (R-Somerville) about retention of students who choose to stay in the state, the officials said Tennessee has stemmed the tide in keeping the best and the brightest in the state. “I found it very encouraging,” said Senator Gresham. “We need to continue our efforts to keep the best and the brightest in our state and make college assessable for all Tennessee students.”

Drug Database – The Senate General Welfare, Health and Human Resources Committee heard a presentation this week regarding the progress of the State’s Controlled Substance Database. The Tennessee Board of Pharmacy began accepting prescription information into the Controlled Substance Monitoring Database in December, 2006 after passage of legislation sponsored by Senator Randy McNally (R-Oak Ridge).

The database includes data on controlled substance prescriptions of schedule II-V drugs. The information includes who the prescribing practitioner is; who filled the prescription; basic patient information; and the name and form of medication that the patient received.

The most prescribed controlled substances in Tennessee as reported in the database are hydrocodone-vicodin-loratab, Alprazolam-xanax, and oxycodone-oxycontin-percocet, respectively. The committee discussed the possibility of adding personnel to look at the overprescribing of controlled substances through the database to prevent drug abuse or fraud. They also talked about the possibility of adding carasprodol and soma to the list of drugs tracked through the database. These matters may continue to be debated during the 2009 legislative session.

Housing slump – In the Senate Commerce Committee, members were told by a panel of homebuilders that the deterioration of the housing industry is “as bad as they have seen in a quarter of a century.” The panel said the major difference in this recession and those experienced by homebuilders earlier, is that it can not be fixed by a reduction in interest rates. The homebuilders said out-of-state banks have been more difficult to work with than community banks and those chartered in Tennessee. The committee will continue to look at the banking industry and mortgage laws as the session continues. 

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