Tag Archives: Emkes

An Emkes Exit Interview: Overcoming ‘Steep Learning Curve’ for ‘Operational Excellence’

The start of a Knoxville Business Journal article on Mark Emkes, the recently departed state finance commissioner who may exemplify the kind of business-oriented guy Gov. Bill Haslam likes to have in state government:
Insofar as knowledge about operations goes, there was quite a contrast at the outset of Mark Emkes’ last two executive undertakings.
When he became CEO of Bridge- stone Americas Holding Inc. in 2004, Emkes says he had firsthand experience in virtually all aspects at the world’s largest tire manufacturer — from changing tires, his first job in a Texas Firestone store back in 1975, to subsequently managing company dealings in locales from the United Arab Emirates to Brazil. Firestone was acquired by Japan-based Bridgestone in 1988.
“You know everything they know,” Emkes recalls about managing the company’s thousands of employees in North and South America.
That was not the case when Emkes became CFO for the state of Tennessee, a position officially known as commissioner of the Department of Finance and Administration. That is the top position among the 22 commissioners hired by Gov. Bill Haslam.
“When I walked into this job, I didn’t know anything about state government,” Emkes says. “The learning curve is really steep.”

Larry Martin Named Interim Finance Commissioner

News release from the governor’s office:
NASHVILLE – Tennessee Gov. Bill Haslam today announced Larry Martin will become the interim commissioner of the state Department of Finance and Administration (F&A) when Commissioner Mark Emkes retires at the end of the month.
Martin becomes interim commissioner at F&A June 1 after Emkes’ retires effective May 31.
A year ago, he joined the governor’s staff as a special assistant to the governor, working alongside Human Resources Commissioner Rebecca Hunter to oversee the implementation of Haslam’s civil service reform, the Tennessee Excellence, Accountability and Management (TEAM) Act; and reviewing state employee compensation.
“I am grateful that Larry has agreed to step into this position and serve Tennessee taxpayers in this capacity,” Haslam said. “He has been critically important in helping us establish the systems and organizational structure to begin recruiting, attracting and retaining the best and brightest to serve in state government, and I look forward to continuing to work with him as interim commissioner of F&A.”

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Emkes Retiring as State Finance Commissioner

NASHVILLE, Tenn. (AP) — State finance chief Mark Emkes is retiring after presiding over three annual spending plans for Republican Gov. Bill Haslam’s administration.
Emkes, formerly the CEO of Nashville-based tiremaker Bridgestone Americas, was one of Haslam’s highest-profile Cabinet choices following the 2010 election.
As Department of Finance and Administration commissioner, the 60-year-old Emkes has been responsible for budget matters and managing the state’s day-to-day finances.
Emkes’ retirement comes following Haslam’s decision to forgo — at least for the time being — $1.4 billion in federal money in the upcoming budget year for Medicaid expansion while pursuing a special arrangement with the U.S. Department of Health and Human Services.
Emkes will be the third Haslam Cabinet member to leave this year, after Children’s Services Commissioner Kate O’Day and Labor Commissioner Karla Davis.

Note: News release below.

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State Revenue Continued Ahead of Projections in March

News release from Department of Finance and Administration:
NASHVILLE, Tenn. – Tennessee revenue collections continued to exceed budgeted expectations in March. Finance and Administration Commissioner Mark Emkes reported today that overall March revenues were $936.1 million, which is $33.1 million more than the state budgeted. Total tax collections in March were 2.2% above the previous year.
“March collections continued to reflect strong corporate profits from last year, but also reflect very modest retail activity for the month of February, when spending occurred,” Emkes said. “We believe the slowdown in retail spending reflects the two percent increase in the federal payroll tax in January and temporary erosion in consumer confidence, most likely brought about by the federal budget sequestration process.
“While year-to-date corporate tax collections remain very encouraging, we must remember that about a fourth of them typically – but not always – occur in the month of April. Due to the volatility of our corporate tax collections, we will be extremely diligent in monitoring our spending patterns for the remainder of this year, maintaining a balanced budget and financially posturing ourselves for the future.”
On an accrual basis, March is the eighth month in the 2012-2013 fiscal year.
The general fund was over collected by $35.4 million and the four other funds were under collected by $2.3 million.

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Legislators Skeptical of Haslam’s ‘Health and Wellness Initiative’

Some legislators voiced skepticism about a $72.4 million “health and wellness initiative,” a portion of Gov. Bill Haslam’s budget that was reviewed in full for the first time on Tuesday.
The plan includes $43 million for an anti-smoking and anti-obsesity efforts. Most of that will go to programs targeting teenagers, pregnant women and women with infant children.
About $5 million goes to the obesity program with officials saying they hope to enhance the state money with $20 million to $27 million in private sector donations.
The administration is also counting $24 million for converting the University of Tennessee’s coal-fired steam plant to use natural gas as part of the “health and wellness initiative.”
The project was announced earlier as part of Haslam’s original budget proposal in February. The original proposal was altered somewhat with an amendment outlined Tuesday to the House and Senate Finance Committees.
The coal plant conversion money comes from tobacco company payments being made to the state to resolve lawsuits. Rep. Gary Odom, D-Nashville, questioned the conversion being part of a “health and wellness initiative” as well as involving tobacco money.
“I don’t see the relationship,” he said. “That’s a third of the tobacco settlement money (available to the state next year).”
“The logic behind that is that particular plant in Knoxville is one of the biggest air polluters in the region,” replied Health Commissioner John Dreyzehner, who outlined the initiative to the House Finance Committee with Finance Commissioner Mark Emkes.
The anti-smoking efforts were questioned by House Finance Committee Chairman Charles Sargent, R-Franklin, and House Majority Leader Gerald McCormick, R-Chattanooga.
“That’s a lot of money and a lot of marketing,” said McCormick, suggesting the state has “some more immediate needs.” He also questioned whether it is necessary to explain the dangers of smoking, when most people are already aware of that – including smokers.
Sargent noted the state had allocated $10 million to an anti-smoking campaign in 2007 and added another $5 million two years later. He questioned whether that expenditure had done anything to reduce smoking among Tennesseans.
Dreyzehner said about 23 percent of Tennesseans smoke, according to most recent statistics, and “the needle has been moving down.” That indicates some anti-smoking efforts have been successful, he said, even though Tennessee’s spending on such programs has lagged far behind other states.
The new initiative will have long-term effect in reducing state spending on health care, he predicted, since it targets teenagers and mothers of small children.

State Tax Collections Ahead of Projections in February

News release from Department of Finance and Administration:
NASHVILLE, Tenn. – Tennessee tax collections continued their upward trend in February. Department of Finance and Administration Commissioner Mark Emkes today announced that overall February revenues were $744.3 million, which is $5.0 million more than the state budgeted.
“Total collections in February marked the seventh consecutive positive growth month this year,” Emkes said. “Sales tax collections, reflecting January spending, recorded modest growth as did several of the smaller tax categories.
“While we continue to believe the modest growth rate in sales tax collections is indicative of a very slow but improving economy in Tennessee, we are concerned that escalating gasoline prices and the failure of Congress to enact a budget will soon begin to erode the positive growth trend we are now enjoying. We’ll monitor collections and spending and work with the General Assembly to end the fiscal year in June with a balanced budget.”
On an accrual basis, February is the seventh month in the 2012-2013 fiscal year.
The general fund was over collected by $12.0 million and the four other funds were under collected by $7.0 million.

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State Funding Board Sees Revenue Growth From 2.74% to 3.89% Next Year

NASHVILLE, Tenn. (AP) — Tennessee Finance Commissioner Mark Emkes says he expects businesses across the state to be less conservative after Congress reaches a deal on the so-called “fiscal cliff.”
Emkes spoke to reporters on Wednesday after the State Funding Board made its state revenue projections.
Based on economists’ estimates, the board predicted the state’s total general fund collections should increase from 1.98 percent to 2.85 percent this year, and 2.74 percent to 3.89 percent next year.
The governor selects a number within the range in constructing the budget.
Emkes says he feels comfortable moving forward on the higher end because businesses in and around the state have said they will “move forward” if the fiscal cliff is averted.
He says they’re currently “holding back” because of the uncertainty of broad tax increases on nearly all taxpayers and budget-wide spending cuts that could be triggered in early January.

November, 2012, State Revenue Just Above November, 2011

News release from Department of Finance and Administration:
NASHVILLE, Tenn. – State Revenue collections for November overall showed less than a percentage point of growth. Finance and Administration Commissioner Mark Emkes today reported today that November collections were $768.2 million, which is 0.35% above November 2011. November collections include sales taxes that reflect consumer spending in October.
“We continue to believe this will be a moderate growth year, and revenue collections are proving that to be the case,” Emkes said. “We remain cautiously optimistic, recognizing that typically about one fourth of all Franchise and Excise collections are realized in the month of April. In light of that, and leading economic indicators, we will remain vigilant in monitoring our spending and revenue patterns for the remainder of this year.
“It’s important to remember we won’t see how after-Thanksgiving retail sales performed until this time next month, when we’ve collected revenues from November spending.”
On an accrual basis, November is the fourth month in the 2012-2013 fiscal year.

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Federal ‘Fiscal Cliff’ Would Mean a Fall for TN, Too

Tennessee state government would face a substantial revenue reduction if the federal government goes off the “fiscal cliff,” according to an Andy Sher report.
According to Pew, about 18 percent of federal grant dollars flowing to states would be subject to across-the-board cuts. That’s the case in Tennessee.
Using calculations from the Federal Funds Information for States, Pew said federal spending on education, nutrition for low-income women and children, public housing and other programs like special education would be impacted.
Tennessee Finance Commissioner Mark Emkes said the state’s own calculations show a loss of $85 million in calendar year 2013 in federal grant money. Among the hits is about $20 million for Title I, which helps low-income students. Another $20 million would come out of special education.
“Of course it would be easier for us if it did not occur,” Emkes said.
But he noted that the state required agencies last year to sketch out “hypothetical” cuts of 15 to 30 percent, depending on what actions the federal government takes to slash spending.
“We would of course prefer not to lose federal money,” Emkes said. “But we are mentally prepared if it goes away. …. We’ve proven we have what it takes to balance the budget.”
He said Tennessee is still trying to get further clarification on the impacts of cuts and tax increases.
In addition to state government, Tennessee would be hit by anticipated cuts to the Oak Ridge National Laboratory and other areas. Pew estimates federal spending on procurement, salaries and wages accounted for 4.9 percent of Tennessee’s gross domestic product in 2010.

Emkes: Even With Surplus, State Must Be Cautious

State revenue exceeded expectations by $563 million for the fiscal year ended June 30, according to figures released last week, but Finance Commissioner Mark Emkes says that doesn’t mean legislators should get ready for a spending spree next year.
Of the total “overcollection,” as the surplus is called in state budget discourse, about $543 million is in money going into the state’s general fund and thus available for most any purpose. Of that, the commissioner said about $210 million is “baked into the budget” for the current fiscal year, which began July 1, and will be spent according to plans.
“Take that out and the real overcollection is $333 million,” he said.
The commissioner said $333 million may not go very far in state budget terms when health care inflation is expected to run about 7 percent in this fiscal year, driving up TennCare costs even without factoring in the potential impact of the Affordable Care Act. State spending on education can be expected to increase by $50 million or so because of enrollment growth and the like.
“All of a sudden you’re at $300 million just when you open the door (to look at options for the next fiscal year),” he said.
The state’s rainy-day fund, which was built up to $750 million at one point in former Gov. Phil Bredesen’s administration, fell to $250 million last year and will be built back to $356 million in the current fiscal year, according to budget plans. But Emkes noted that still only about half the former level exists and, given the uncertain economic times, it would be prudent to build up the fund further while surplus revenue is flowing.
The state’s July tax collections marked the 12th consecutive month in which total collections have exceeded the budgeted estimates, officials said. July sales tax collections represent consumer spending that took place in the month of June.

Note: Gail Kerr, meanwhile, is soliciting suggestions on how to spend the surplus.