The original budget proposal included over $130 million in tax increases, which House leadership felt was a tactic to balance the budget. Part of the tax increase plan included an $85 million tax on single article sales and an additional $50 million by increasing taxes on cable, long-distance telephone services, and free continental breakfasts that hotels and motels sometimes provide. I serve as Caucus vice-chair and as a member of the House Finance Ways & Means Committee. In these roles, I saw a great deal that needed to be cut from the budget, and at the same time we saw many things that we needed to protect with recurring and non-recurring funding from the Legislature. I am pleased that we reached a consensus to fund many important items such as the Career Ladder program, Infant Mortality Clinics, Coordinated School Health and Agriculture Enhancement Grants.
The Legislature approved the Career Ladder program in 1983 as a form of incentive pay for educators. If teachers hit certain benchmarks, their pay was supplemented. The program was closed to new entrants in 1994, and shrinks every year due to attrition. Estimates for the 2010-2011 fiscal year indicate approximately $5.4 million in savings because of retirements. Although there was discussion of removing Career Ladder funding from this year's budget, the program was ultimately included with temporary funding and totals $34.5 million.
State Employee Stipend
The original budget proposed a 3 percent one-time bonus for state employees costing $164.7 million but lawmakers felt that this expenditure was difficult in a year when so many state layoffs were occurring. The proposal in the final budget would provide for a one-time bonus of $50 per every year of service. Employees will receive a minimum of $150 and a maximum of $1,250 and the bonus is contingent upon the state collecting over projected revenues. If given, the administration said the bonuses would likely happen in the fall of this year.
Federal money still in jeopardy
The budget cautiously allocates federal funding that has not yet been approved by the U.S. Congress, but funds only “contingency items” that are essentially 'extras' with these dollars. The state was expecting Congress to have already approved the nearly $340 million in one-time funding, but Congress left on Memorial Day break without acting on the extension. The funds will provide for upgraded radios for state troopers, incentives for a new economic development project, the demolition of several dilapidated buildings at the University of Tennessee's Health Sciences Center, and the Civil Rights Museum. A portion would also be used on a post-flood relief campaign to demonstrate that “Tennessee is open for business.”
In light of the devastating floods at the beginning of May, lawmakers included flood relief in the budget to the tune of $19.9 million. Flood relief plans were discussed at length during budget negotiations as lawmakers recognize the need for aid. Proposed methods for funding flood relief proposals included using cash from the state's Rainy Day Fund, using a portion of stimulus money, and through various tax relief measures. Ultimately, the legislature settled on a plan for flood victims that eliminates the state and local sales tax on replacing major appliances, residential building supplies, and residential furniture. To receive a refund from the Department of Revenue, flood victims must have purchased the equipment between May 1, 2010, and September 30, 2010. The total amount that can be received is $2,500 and the claimant must file a single application with the Department of Revenue by November 30, 2010, along with satisfactory proof from FEMA showing damage. The refunds are allocated out of the state's General Fund.
The “technical corrections” bill submitted each year by the administration has evolved over time from legitimate technical changes in the Tennessee Code Annotated to a tax bill that supplements the state's General Fund. Lawmakers have fought for returning the legislation to a true “technical” corrections measure for many years, and this year the legislature was finally successful. Three months ago, the original technical corrections bill contained more than $130 million in tax increases to balance the budget. Lawmakers removed taxes from the bill, which now includes tax relief, flood victim assistance, and economic development measures, some specifically created for Wacker as an industrial customer of Bradley County. The final vote on the legislation was 92-2. I voted yes to fund local economic development.
(Editor’s Note: Rep. Kevin Brooks serves the 24th Legislative District in Cleveland and Bradley County. He and his wife, Kim, are actively involved in their community and local schools with their two children, Zach, who is attending Lee University, and Elizabeth, who attends Cleveland High School.