March 2, 2013

“Sequester is an evil,” said Norris. “But it has become a necessary evil given the dysfunction in D.C. It is for those of us who carry and balance our budgets in state government each year to mitigate the failure of our federal government.”

Senate Finance Committee is Briefed on Effects of Sequestration on Tennessee’s Budget

The Senate Finance Committee heard testimony from State Budget Director David Thurman regarding the effects of an estimated $100 million in cuts to Tennessee’s budget from the federal sequestration plan. Unless a last minute agreement is reached in Washington, the sequestration cuts made under the federal Budget Control Act of 2011 are effective on March 1. The result is $1.2 trillion in across the board spending cuts nationwide over the next ten years, equally split between defense and domestic spending.

For Fiscal year 2013 alone, it is estimated that federal spending will reach $3.803 trillion.

“The largest impact we would incur totals about $100 million on the revised delayed sequestration,” said Thurman. The cuts were delayed after a last minute deal was struck between Congress and President Obama on January 1. “In Education, Title I and Special Education are going to be the programs that see the largest cuts within the first year, but there are a lot of unknowns as to how that would play out as far as the timing and setting the parameters of these cuts. There’s a lot of flexibility that OMB (federal Office of Budget Management) has. They also have some flexibility with the federal agents as well, so we’re in a wait and see mode.”

Thurman said he expects the OMB to roll out parameters and information about how to implement the reductions immediately after the deadline. After Tennessee receives instruction to the agencies and program directors affected, state administration officials will develop a plan based on the positions, programs and dollars sequestered.

“There are a lot of questions about timing. The federal fiscal year goes until October, so those cuts could occur in next fiscal year, not this one,” Thurman added.

The cuts amount to approximately $85 million in the state’s general fund, with the largest being Title I funds and Special Education. Other cuts include an estimated $15 to $16 million in federal highway funds, $1 million to vocational education, $2 million to improving teacher quality, $1.6 million in substance abuse treatment, $4 million in rehabilitation services, $3 million in low income home energy assistance, $3 million in children’s services, $2 million for HIV/AIDS treatment, $2 million for social services and $500,000 for mental health programs.

Tennessee has worked diligently to manage its finances in a fiscally responsible manner. The state is ranked 48th lowest in the nation in per capita in debt and 47th in per capital tax burden, all while balancing the state budget. The full Senate approved Senate Joint Resolution 38 on Monday night urging Congress and President Obama to immediately adopt a balanced budget. Forty eight other states also maintain balanced budgets through a constitutional requirement or by state statute.


(L-R) Collierville Elementary School Principal Louise Claney, Senator Norris, Blister the Dragon and Pete Pinckney at the annual Pancake Breakfast, which raised funds for the school this year.

Bill to Allow Referendums on Wine Sales in Retail Food Stores Meets First Hurdle
with Approval in Senate State & Local Government Committee

After a spirited debate, legislation that would let Tennesseans vote on whether to allow the sale of wine in retail food stores via a local referendum overcame its first hurdle this week by a vote of 5 to 4 in the Senate State and Local Government Committee. Senate Bill 837 would give municipalities in those communities that currently allow retail package stores, liquor-by-the-drink establishments or both to hold a referendum on the sale of wine in retail food stores during the next general election. The authorization law would take effect on Jan. 1, 2014 and would allow a referendum to be held after that date.

In order to place the referendum on the ballot, a petition must be presented to the county election commission. The petition must include signatures from 10 percent of the county’s population that voted in the last gubernatorial election. The legislation as written provides the exact ballot question that will be asked of voters.

The legislation will require any retail food store that sells wine to participate in the Tennessee Alcoholic Beverage Commission’s Responsible Vendor Program, which requires retailers’ employees to complete training on the responsible sale of alcoholic beverages.

Thirty-six states, including six of Tennessee’s border states, allow the sale of wine in retail food stores.

A Note from Mark –

As has been widely reported, just before SB 837 passed out of committee on a 5-4 vote, I stated that I support the right to vote, but not in this form. While I support the referendum approach, I think that WHAT you vote on is equally important.

I support a free market approach to the sale of wine and liquor in Tennessee. That is why I have advocated a comprehensive revision of Tennessee’s alcohol statutes, including restrictions on sale of wine, for many years. This bill, as written, neither revises the statute in a comprehensive way nor supports the free market.

The need for substantive revision has been ignored so far. The prohibition against more than one license for liquor and wine stores remains as does the prohibition against such stores selling anything but liquor and wine.

In other words, the committee vote, without more, allows every Wal-Mart, Costco and Kroger to sell wine at as many locations as may exist in Shelby County, but the family with a liquor store remains shackled to one store only.

My constituents are about evenly split on the issue, but very few of them express a desire to disadvantage one retailer over another when this is explained.

This initiative has a long way to go before it can become law. Perhaps it can be remedied on its way to the Senate floor. That’s the way the legislative process works.

In Brief

Health Care Compact – Legislation was approved in the Senate Government Operations Committee this week calling for Tennessee to join an interstate Health Care Compact with the express purpose of returning the responsibility and authority for regulating health care to the states. Senate Bill 406 provides a legal framework in which states can create their own healthcare systems. If approved by Congress, the bill essentially provides a permanent waiver to each member state to create whatever healthcare regulations the legislature deems best for the citizens of that state. The structure protects healthcare funding by allowing member states to access federal tax revenues directly and without strings attached.

Misuse of Welfare Benefits — In Senate floor action, final approval was given to legislation to curb abuse of purchases made through Electronic Benefit Transaction (EBT) cards used by recipients of the Temporary Assistance to Needy Families (TANF) program. Senate Bill 244 prohibits use of a welfare recipient’s EBT card in liquor stores, adult cabarets, casinos and other gambling facilities. The bill also bans the use of EBT benefits at an ATM located inside a liquor store, adult cabaret, casino or gambling establishment. Under the bill, welfare recipients who use EBT benefits at liquor stores, adult cabarets or gambling establishments would be subject to disqualification from the program as permitted by federal law. The measure also calls for those misused benefits to be recouped by the Tennessee Department of Human Services.

Veterans / Charitable Funds — A resolution seeking to amend Tennessee’s Constitution to allow 501 (c) (19) charitable veterans groups to raise funds, in the same manner as other 501 (c) (3) charitable organizations, was approved this week by the Senate Judiciary Committee. Veterans groups were left out of the Constitutional Amendment approved by voters in 2002 that allowed charitable groups registered with the Internal Revenue Service as 501 (c) (3) organizations to conduct an annual fundraising event like duck races, cake walks, raffles and other games of chance. Senate Joint Resolution 60 requires that any funds raised by the games go to purposes that benefit the community, veterans or retired veterans. It was approved by the 107th General Assembly and must receive a two-thirds plurality in the current 108th General Assembly. If it passes both the House and Senate, it then goes to voters in a statewide referendum in November 2014, where it must receive a simple plurality of votes cast in the race for governor.

Student Athletes / Concussions — Legislation designed to protect student athletes who suffer concussions from risking further medical complications or death passed the full Senate by a vote of 30 to 0. Senate Bill 882 ensures guidelines are in place to help coaches, youth athletic instructors and parents recognize a concussion and its symptoms in order to keep an injured player from risking their health by returning to competition too soon. In addition, schools and organizations must have a policy of removing youth who show signs of concussion from activity for medical evaluation by a team doctor or designated person and must be cleared to play. The Center for Disease Control (CDC) reports that from 2001-2009, concussions among youth increased 60%, leading the agency to label concussion frequency as reaching “epidemic” proportions.

Food Gardens – The full Senate and House of Representatives have passed Senate Bill 102 authorizing the sale of produce grown in community gardens. The proceeds from the sale are not designated to a specific use; however, they most likely would be reinvested in the garden or given to the workers.

Education / Graduation Rates — Civic Enterprises released a report this week showing Tennessee is making the largest gains in the nation in graduating high school students. The report, entitled “Building a Grad Nation – Progress and Challenge in Ending the High School Dropout Epidemic,” analyzes the latest graduation rates and “dropout factory” trends at the state and national levels. The report says that Tennessee’s graduation rate rose 20.8 percentage points to 80.4 percent and is among 18 states that are poised to achieve the national goal of a 90 percent rate by 2020.


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