By Richard Locker, Commercial Appeal
May 21, 2011

NASHVILLE — The Tennessee legislature approved a $30.8 billion state budget Saturday that includes $292 million in taxpayer-funded bonds for four large corporate projects, including Electrolux in Memphis, and $5 million to help the University of Memphis operate a branch at the Lambuth University campus in Jackson.

The budgets bills, including supplemental appropriations for the current fiscal year that ends June 30, forced the new Republican legislative leadership to do something some of its members criticized under Democratic rule: passing a bill that allows state spending growth to exceed growth in the state’s economy.

The budget makes the Lambuth deal contingent on local governments and agencies in Madison County reaching agreement with the Lambuth board of trustees on how much of the school’s debt will be paid off locally. Jackson Mayor Jerry Gist said Saturday he’s confident that will occur.

The state money is to help U of M operate classes in the first year and “is the catalyst of what we’re trying to do here,” the mayor said. “The governor and General Assembly have upheld their part, and now it’s up to the local stakeholders to fulfill the rest of the commitment…”

A local coalition consisting of the city of Jackson, Madison County, the Jackson Energy Authority and West Tennessee Healthcare, which operates Jackson-Madison County General Hospital, is negotiating with the Lambuth board, and the group’s last offer was for $5.9 million toward Lambuth’s total debt of about $10.4 million.

State Sen. Lowe Finney, D-Jackson, expressed appreciation on the Senate floor Saturday to Haslam and his colleagues. “The burden is on the local government to make sure it works and I am confident they will do that, and when they do the state will move forward with a state university in Jackson.”

The U of M wants to start classes — with an initial emphasis on nursing, education and business — in Jackson by late August, said U of M lobbyist Kevin F. Roper. If the Lambuth campus in Jackson isn’t available by then, U of M will look at alternative sites and Jackson State Community College, where the Memphis university already offers limited classes. Eventually, U of M at Lambuth would be a full-service campus.

The budget also contains $10 million for the new Memphis Research Consortium, a coalition of U of M, University of Tennessee Health Science Center, local hospitals and corporations, and $4.5 million to complete classrooms and laboratories in the new pharmacy building at UTHSC.

The UT Memphis campus did not get long-delayed funding to demolish four abandoned and deteriorating buildings on the campus, but UT lobbyist Anthony Haynes said there is a “pretty strong commitment” by state officials to pay for that next year.

An accompanying bond bill contains an unprecedented amount of money to aid in the construction and surrounding infrastructure for at least four large private business projects, including $97 million in bonds toward a new $190 million Electrolux home products manufacturing plant in Memphis.

In other industrial projects, the bill spends $150 million to expand a new Hemlock Semiconductor expansion in Clarksville, $34.6 million more for a new Wacker Chemie plant in Cleveland and $10 million for a Horsehead Corp. facility in Hawkins County.

It also sends $7 million to Lake County for the new Port at Cates Landing.

Senate Republican Majority Leader Mark Norris, R-Collierville, sponsored the budget and bond bills in the Senate. The budget, including supplemental appropriations in the current fiscal year that expires June 30, assumes state revenue growth of 4.5 percent in the current year and 3.7 percent in 2011-12, starting July 1.

It includes $105 million in new funding for K-12 education and a 1.6 percent pay increase for general state employees and teachers — the first pay hike in four years. It provides $55 million in building maintenance bond funding for higher education and $34 million in new maintenance funding for state technology centers.

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