FOR IMMEDIATE RELEASE: CONTACT: David Smith
Tuesday, February 10, 2015 OFFICE: (615) 741-3763

Bills include last-dollar scholarships to community college for adult learners

NASHVILLE – Tennessee Gov. Bill Haslam today filed legislation that is reflected in his FY 2015-16 budget proposal. The bills are a result of the governor’s continued focus on more Tennesseans earning a post-secondary credential, supporting teachers across the state and building a more customer-focused, efficient and effective state government.

“These legislative proposals build on the Drive to 55, our effort to raise the percentage of Tennesseans with a degree or certificate beyond high school from 32 to 55 by the year 2025. We know that just reaching high school graduates won’t be enough to reach our goal, so we’re specifically looking to get adults with some college credit to go back and earn their degree,” Haslam said.

“Along with including $100 million in the budget for teacher salaries, the proposals are also aimed at supporting educators in meaningful ways, and we are always looking for ways to recruit, reward and retain the best and brightest to serve in state government.”

The governor’s legislation, sponsored by Senate Majority Leader Mark Norris (R-Collierville) and House Majority Leader Gerald McCormick (R-Chattanooga), includes:

  • The Community College Reconnect Grant pilot program would use a one-time payment of $1.5 million in lottery funds in the FY 2015-16 budget proposal to provide last-dollar scholarships to adults with some college credit to attend a community college. In Tennessee there are nearly 1 million adults with some post-secondary credit but no degree, and this is an additional component of the governor’s Drive to 55 initiative.
  • The Educators’ Liability Trust Fund would provide personal liability coverage to teachers free of charge. While many teachers are covered through their school districts’ insurance plans, the governor heard from many in his conversations around the state that they are concerned they’re not adequately covered and teachers end up paying for liability protection at their own expense. This year’s budget proposal includes a one-time appropriation of $5 million to establish the fund to provide coverage.
  • The Revenue Modernization Act would help keep Tennessee a low tax state by leveling the playing field between in-state companies and out-of-state companies doing business in Tennessee. The proposal would also seek to close certain loopholes by adapting to changes in the way products are bought and sold. The proposed legislation includes:
    • Addressing “nexus” in sales and use, franchise and excise, and business taxes;
    • Adopting market-based sourcing of services to determine which state counts the sale of service for tax purposes when a company conducts business in more than one state;
    • Making Tennessee’s tax structure more competitive with surrounding states by changing the way a multi-state company’s income and net worth is taxed for franchise and excise purposes;
    • And allowing the use of software and video games being accessed remotely to be subject to sales tax as if they had been purchased or downloaded.
  • The Compensation Enhancement Act continues the administration’s focus on recruiting, retaining and rewarding a talented state government workforce by adapting longevity payments to help implement the market- and performance-based compensation plan. Since the governor took office, $139.4 million has been allocated in the state budget for salary increases, and the FY 2015-16 budget proposal includes another $47.7 million for salary increases. Under the proposal, executive branch employees would receive a permanent increase to their base salary equal to half of the longevity payment due, effective July 2015. The remaining half of the longevity payment would be reallocated to the state’s General Fund and then used to fund market- and performance-based salary increases.
  • The State Health Insurance Reform legislation aims to address the rising state employee retirement health care costs and give the state flexibility to offer more competitive total compensation packages and to design benefits for state employees. Key changes include:
    • The state would have the flexibility to offer a defined contribution or defined benefit to current employees for pre-65 retiree health insurance, reflecting the practice of most large private sector employers, and state and local education employees hired after July 1, 2015, would not be eligible for pre-65 retiree health insurance;
    • The State Insurance Committee would have the flexibility to change the percent subsidy that is given to the active state employees by offering one basic health plan;
    • After July 1, 2015, no part time state employee may be eligible for any insurance plan while current employees working 1,450 hours or more per year will be grandfathered into the plan;
    • The state would not offer Medicare Supplement Insurance under the state and teacher insurance plans for employees hired after July 1, 2015.

The governor previously filed the following three pieces of legislation in January: the Tennessee Teaching Evaluation Enhancement Act, Protection of Volunteer-Insured Drivers of the Elderly (PROVIDE) Act, and the Tennessee Promise Implementation Adjustments Act.

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