Tag Archives: fiscal

Democrats have ‘serious concerns’ about voucher advocate as director of Fiscal Review Committee

News release from House Democratic Caucus:
Nashville, TN: House Democrats expressed serious concerns today with the appointment of Jeff Spalding as the Executive Director of Fiscal Review—the department which assigns a financial cost to each piece of legislation.

“Our fiscal review directors have a long history of being reliable, non-partisan individuals,” said House Democratic Leader Craig Fitzhugh. “While we might disagree with their assessments, we’ve never worried about them having an agenda. That’s why this appointment is so concerning.”

The new director comes to the General Assembly from the Friedman Foundation for Educational Choice, a pro-voucher group whose self-stated mission is the privatization of “a major segment of the educational system.” The Friedman Foundation has a long history opposing public education, with many pro-privatization articles written by Mr. Spalding.

“The majority party has tried for three years to get a voucher program through the General Assembly with no success. My concern is that we now have a situation where the individual who assigns a fiscal note to that legislation has a well-known personal agenda. It’s really unprecedented.”

The director is jointly appointed by the Fiscal Review Committee. While the hiring of Mr. Spalding has been announced, he is still subject to confirmation by the entire Fiscal Review Committee when they meet next month.

“I certainly hope the members of the Fiscal Review Committee will take a hard look at the new director and make sure his only agenda is the fiscal health of our state.”

UPDATE/Note: The Tennessean has Spalding’s response:

“Did I work for an organization that advocates for school choice? Yes. Do I actually share the view that there are some benefits to expanded school choice? Sure,” Spalding said. “Will that impair my ability to analyze the fiscal impact of (a bill)? Not in the least.”

Spalding, who spent two decades in public policy in Indiana before joining the foundation, said he excels at this type of work.

“Any time you can elevate the public debate on important public policy matters and have a role in that, it’s exciting,” Spalding said Tuesday morning.

Fiscal note flap: Harwell seeks NCSL review; Casada has a bill

House Speaker Beth Harwell is setting up a review of the Legislature’s “fiscal note” process while House Republican Caucus Chairman Glenn Casada has pre-filed a bill that calls for those preparing the legislative cost estimates to provide “supporting documentation” on request.

Casada’s bill (HB7) appears to have a caption broad enough to take an amendment incorporating any recommendations made by the NCSL in its review. Harwell reported plans for the review in an email to legislators obtained by The Tennessean.

From the Dave Boucher story:

In the email, she tells representatives the NCSL “has agreed to conduct a thorough review and analysis of Fiscal Review to determine if best practices are in place to ensure accurate and independent fiscal notes.”

The fiscal review committee consists of members from both state legislative chambers. It looks at proposed legislation and attaches an anticipated price tag for local or state government if the bill becomes law, known as a “fiscal note.” In the email Harwell notes the director of the fiscal review committee recently left for a different job, making this time of transition ripe for a “fresh look” at the process.

At times, members from both parties have questioned whether the reviews are politically motivated: House Republican Caucus Chairman Glen Casada, R-Franklin, and House Minority Leader Craig Fitzhugh, D-Ripley, say they’ve heard allegations of misdeeds by the committee. Both say those allegations typically center on the idea the committee might attach larger price tags to bills they don’t like.

(Note: The biggest fiscal note flap last session was over the $100,000 price tag attached to an “open carry” gun bill after it passed the Senate, leading to death of the measure in House budget sub. Post from the time, HERE.)

Casada and Fitzhugh say they’ve had disagreements with notes attached to their bills, but the committee has met with them to discuss the process. The committee isn’t legally obligated to meet though, so Casada is proposing legislation to make such meetings mandatory.

“I don’t think it’s politically motivated; I just think there’s a disagreement,” Casada said.

“When there’s honest disagreement, and at the same time there’s no evidence or proof for why a bill has a fiscal note … then you tend to see blame and concern and mistrust. And this is just going to clear that up.”

Memo Raises Lack of Competition Question in Two State Contracts

A memo prepared for Sen. Bill Ketron, chairman of the Legislature’s Fiscal Review Committee, says that the Department of General Service’s “emphasis on expeditiously completing procurements” may have limited competition for two state outsourcing contracts, reports WTVF-TV’s Phil Williams.
An excerpt:
A recent meeting of the legislature’s Fiscal Review Committee, called to consider three questionable state contracts, ended up being a highly orchestrated endorsement of the Haslam administration.
The governor’s chief of staff, Mark Cate, had met privately with members of the contracts watchdog committee prior to the public session. And, by and large, committee members responded with effusive praise. Some suggested that, in this case, the media had got it wrong.
But a staff report, not shared with the full committee, told a more complicated story regarding at least two of the three state contracts.
Read the memo (HERE).
“Staff did not find evidence in the documentation reviewed that any violation of state law occurred,” the Fiscal Review Committee’s executive director, Lucian Geise, wrote in a July 15 memo to the committee’s chairman, Sen. Bill Ketron, R-Murfreesboro.
“However,” Geise concluded, “an emphasis on expeditiously completing procurements resulted in actions that may have reduced competition.”
And that was what our NewsChannel 5 investigation had suggested in the case of contracts awarded to Enterprise Rent-A-Car and Bridgestone Retail Operations.
Ketron never shared the staff memo with the rest of the committee.
A spokesperson for the Senate Republican Caucus said that the memo was written for Ketron’s “personal” benefit because he had been out of the country.
“He was not asking for information as chairman of the committee,” she said. “Rather, he asked for information in light of the fact that the stories appeared during his absence.”

Cate on Jones Lang LaSalle Deal: Minor Miscues, Major Savings

Mark Cate, the governor’s chief of staff, acknowledged to state legislators Tuesday that mistakes were made in handling a multi-million dollar contract for management of state buildings but declared the overall effort a huge success that other states now want to emulate.
Appearing before the Legislature’s Fiscal Review Committee, Cate said Gov. Bill Haslam’s administration entered “unchartered territory” in contracting with Chicago-based Jones Lang LaSalle with inherent “complications and confusion” occurring at times.
One mistake was in not being sufficiently transparent about the move to legislators and the public, he said. Another was not drafting the original, competitively-bid proposed contract to reflect the maximum value to the winning company, he said, instead of listing it just as a $1 million study and later changing the amount upwards as new duties were added.
Cate also said officials have decided to have “a fresh set of eyes” conduct another review on one of JLL’s recommendation – demolishing the Cordell Hull building, which stands next to the state Capitol and is one of six major structures statewide slated for demolition as “functionally obsolete.” This has triggered some controversy in Nashville because of what Cate called the building’s “perceived historical significance.”

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Legislators criticize prison medical contract

A legislative watchdog group agreed Monday to delve deeper into the state Department of Correction’s awarding of a $200 million-plus contract to handle inmate health care to a relative newcomer despite its $6.4 million higher bid, reports the Chattanooga TFP.
Fiscal Review Committee members want the winner of the contract, Centurion LLC, to come before the panel in September.
Correction Department officials went before Fiscal Review for approval of their request to extend the current contract of Brentwood, Tenn.-based Corizon until Sept. 30 to provide Centurion additional time to prepare taking over the service.
While the business at hand was the 90-day extension of Corizon’s existing contract, committee members devoted most of their time questioning Centurion’s winning of the new three-year contract.
Corizon, which had the existing contract, lost the competition to Centurion on the new three-year contract. Corizon protested but two state panels upheld the award to Centurion, the most recent coming in a June 6 ruling.
Recently, Correction Department officials said, Corizon indicated it would not push the protest further by going to court.
Lawmakers criticized the request-for-proposal process and raised concerns about the higher cost and what they see as the recently created Centurion’s relative lack of experience.
Rep. Tim Wirgau, R-Buchanan, said it raises “red flags” for him.
“Give me some reasons why you decided to spend $6.4 million more,” he told Wes Landers, chief financial officer for the Correction Department.
Rep. Jeremy Faison, R-Cosby, was highly critical of Centurion’s experience.
“That seems a little shady there,” Faison said, adding that the state either had standards or not in awarding points in the request-for-proposal process for experience.
In remarks both during the committee and afterward, Wes Landers, the Correction Department’s chief financial officer, defended the decision to go with Centurion.

New State Procurement Office Claims Savings of $113 Million

While the head of Tennessee’s newly centralized procurement system provided examples to legislators of savings to taxpayers last week, declaring they collectively total $113 million to day, state Rep. Jeremy Faison offered another example that didn’t sound so good.
Chief Procurement Officer Mike Perry’s examples included a dozen “ballpoint stick pens” that previously cost the state $1.55 for a box of a dozen versus 47 cents today and a ream of paper, previously $3.10, now $2.77.
Office supplies counted for $8 million of the projected $113 million in savings, a figure that includes comparing new multiyear contracts with old ones as well as some one-time purchases. The biggest projected savings, $33 million, was on Oracle software through “strategic sourcing,” which involves negotiating with current contract holders.
In the latter case, the vendor initially said that new software needed to bring TennCare computers into compliance with new provisions of federal law would cost $39 million, Perry said. After the negotiation, the price was $6 million.

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Fiscal Cliff Deal Included TN Sales Tax Deductability

Part of the “fiscal cliff” tax bill approved by Congress extended the ability of Tennesseans to deduct sales tax payments from their federal income taxes, reports the Commercial Appeal. But that didn’t stop Rep. Marsha Blackburn, a longtime advocate fo sales tax deductability, from joining other Tennessee Republican congressmen in voting no.
Back when she was a freshman, U.S. Rep. Marsha Blackburn worked with then Senate Majority Leader Bill Frist of Tennessee to permit Tennesseans and other filers in states without income taxes to deduct sales taxes on federal returns. As recently as Nov. 16, Sen. Lamar Alexander, R-Tenn., was calling Blackburn “the leader in restoring the deduction in 2004 and she’s the leader now in an effort to ensure it is extended again.”
But on New Year’s Day, when the extension was made part of the deal to avert the fiscal cliff, Blackburn and every member of the Tennessee congressional delegation except U.S. Rep. Steve Cohen, D-Tenn., voted against it.
Alexander and Sen. Bob Corker, R-Tenn., also voted for the deal that included extending the deduction, which can be used by the roughly 25 percent of Tennesseans who itemize their deductions rather than taking the standard deduction.
Asked to explain her vote, Blackburn said in a statement, “Restoring sales tax deductions was one of the first pieces of legislation I helped pass when I came to Congress. As is the case with most pieces of legislation we debate, there were obviously provisions in the bill that I was happy to see included such as the extension of the sales tax deduction, which is very important for my constituents in Tennessee.
“However, as a total package, the Senate bill was a bad deal for the American people. It only makes our situation worse. I could not support a proposal that imposes job-killing tax hikes, does nothing to restrain spending, adds to our annual deficit, and increases our debt by nearly $4 trillion over the next decade.”

TN House Delegation 8-1 Against Fiscal Cliff Deal (with some statements)

Democrat Steve Cohen of Memphis was the only member of the Tennessee delegation to the U.S. House who voted in favor of the “fiscal cliff” legislation that was approved by a 257-167 bipartisan vote on New Year’s day.
Here’s how the Tennessee delegation voted:
Voting no in the House were Republicans Phil Roe, John Duncan, Chuck Fleischmann, Scott DesJarlais. Diane Black, Marsha Blackburn, and Stephen Fincher. Democrat Jim Cooper also voted against the measure.
Democrat Steve Cohen was the only yes vote among the Tennessee delegation in the House.
In the early morning vote in the Senate, Sens Lamar Alexander and Bob Corker, both Republicans, voted in favor of the bill.
==Here are news releases from Tennessee congressmen on their vote: (Alexander and Corker statements are on an earlier post, HERE.)
From Rep. Jim Cooper:
WASHINGTON – U.S. Rep. Jim Cooper (TN-05) issued the following statement today after voting against H.R. 8, the American Taxpayer Relief Act, which adds nearly $4 trillion to the debt over the next 10 years:
“No real spending cuts. No real deficit reduction. No acknowledgement of America’s out-of-control national debt. This is a popular vote today, but it will harm America in the long run. It is good to see a return to bipartisanship, but not when it makes our fiscal problems worse.
“Congress is missing the chance of the decade to adopt a large, balanced deficit reduction plan such as Simpson-Bowles that combines tax relief with controlling federal spending.
“In just a few weeks, America will face another debt-ceiling crisis as well as sequestration. Today’s fiscal Band-Aid may feel good now, but its relief will not even last until spring.”
Cooper has long favored a balanced, bipartisan approach to tackling the national debt and fiscal cliff. He and U.S. Rep. Steve LaTourette (R-OH) introduced the only bipartisan budget last spring, based on recommendations from the Simpson-Bowles fiscal commission.
The Cooper-LaTourette budget was the only budget plan to receive bipartisan support in the House last year, and was widely praised by editorial boards across the country. Cooper and LaTourette were honored by the Concord Coalition in September 2012 for their political leadership and work to reduce the debt.

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Lamar & Bob Talk Medicare Cuts and Other TN Fiscal Cliff Notes

Alexander, Corker Join on Fiscal Cliff, Medicare Cuts:
Focus on Medicare, Not Taxes During news conferences on Friday, U.S. Sens. Lamar Alexander and Bob Corker predicted that the “fiscal cliff” tax situation will be resolved and decried another “fiscal cliff no one wants to talk about, the looming bankruptcy of Medicare,” reports the Bristol Herald-Courier.
There was a lot more reporting on the matter. A sampler:
Congress will act within days or weeks — perhaps even this weekend — to stem any increase in income taxes for almost all Americans in response to an inevitable public outcry, The Tennessean reported.
“I would like them (taxes) to stay the same (for everybody), but I am not king here,” Alexander said at a joint press conference with his Tennessee colleague.
The article also has comments from the two senators saying they still think they did the right thing in voting for the package of legislation that brought on the “fiscal cliff.” U.S. Reps. Marsha Blackburn and Scott DesJarlais offer similar comments — though Blackburn voted for the bill in question, DesJarlais against.
From the News-Sentinel: U.S. senators Lamar Alexander and Bob Corker said Friday taxes will not increase for most Americans and insisted “fiscal cliff” negotiations will either address pending hikes before Monday’s deadline or through retroactive legislation in the new year.
With that confidence, Tennessee’s senators turned to spending cuts and offered a proposal to exchange a $1 trillion reduction in entitlement spending — mostly from Medicare — for a $1 trillion rise in the federal debt ceiling.
“Taxes is not the biggest uncertainty,” Alexander said. “That is the possibility that all of those Americans who depend on Medicare to pay for their medical bills to fall off the fiscal cliff because Medicare goes bankrupt.”
The plan, which the senators have dubbed the “Dollar for Dollar Act,” was introduced by Corker on Dec. 12. Its details include reforming Medicare to include competition from private health-care options, gradually raising the eligibility age to 67 by 2027, requiring high-income beneficiaries to pay higher premiums and giving flexibility to the states to manage the program.

Total Dereliction of Duty’
CBS News aired a Corker interview wherein he chides President Obama and congressional leaders for “a total dereliction of duty at every level” and “a lack of course to deal with the spending issues.”
“I’m very surprised that the President has not laid out a very specific plan to deal with this,” said Corker, admitting, “Candidly, Congress could have done the same. And I think the American people should be disgusted.”
While Corker granted that “98 percent of the people in our country can be assured…their income taxes are going to be the same,” he argued, “We here in Washington are going to hurt the American economy, we’re going to hurt Americans at every level, and to me it’s just a travesty that we’ve not been willing to deal with this issue.”
And Corker did not predict much progress from (Friday’s) meeting between the President and congressional leaders, predicting a “worst case scenario” in which “We’ll kick the can down the road…we’ll do some small deal, and we’ll create another fiscal cliff to deal with this fiscal cliff.”

There’s a Milk Cliff,, Too
Tennessee dairy farmers soon could get paid substantially higher prices for their milk, but they’re not relishing the prospect, says The Tennessean. Instead, they fear it could make milk so expensive — potentially as much as $6 to $8 a gallon, by some estimates — that even more people stop drinking it.
“I don’t think it would kill our industry, but it would seriously injure it,” said Deborah Boyd, secretary/treasurer of the Tennessee Dairy Producers Association.
Those “dairy cliff” fears are based on Congress’ inability to pass a new five-year farm bill to replace one that is set to expire on Monday. The bill outlines how the federal government determines prices paid to dairy farmers.
Unless a new bill is passed or the current one is extended — Congressional leaders said Friday they were working on an extension — a 1949 law would take effect. That law would force the U.S. Department of Agriculture to pay roughly $38 per 100 pounds for milk, or double the current prevailing price.
Experts say that would ultimately increase the retail price for milk, which now averages $3.59 a gallon, as well as for other dairy products such as cheese and yogurt
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DesJarlais: Republicans Frustrated
House Republicans feel stymied but not hopeless as they prepare to return to Capitol Hill for possible last-minute action to avoid the “fiscal cliff,” Republican Rep. Scott DesJarlais tells The Tennessean.
DesJarlais, of Jasper, Tenn., was one of 234 members of his caucus who listened in on a conference call Thursday with House Speaker John Boehner of Ohio. Boehner said the House will return to work Sunday at 6:30 p.m. and remain in session in case lawmakers and President Barack Obama reach agreement on a deal to avoid more than $600 billion in tax increases and spending cuts that will otherwise take effect on Tuesday. Economists fear the combination could jar the nation’s economy back into recession.
DesJarlais said in an interview from his Tennessee home Thursday that it’s up to the Senate to come forward with a plan now, an opinion also expressed by Boehner. “But all we are hearing is crickets,” DesJarlais said. Asked if Republicans feel a lack of hope about a possible solution, he said, “It’s more frustration.”

AP Profiles ‘Pragmatic and Peripatetic’ Bob Corker and His New ‘Outsized Role’

By Donna Cassata, Associated Press
WASHINGTON — Republican Sen. Bob Corker is spending a lot of time lately talking to Democrats.
The freshman lawmaker from Tennessee unveiled his own 10-year, $4.5 trillion solution for averting the end-of-year, double economic hit of automatic tax hikes and spending cuts and then spoke briefly last week with Treasury Secretary Timothy Geithner. Deficit-cutting maven Erskine Bowles had forwarded Corker’s proposal to White House Chief of Staff Jack Lew.
Corker also was on the phone with Secretary of State Hillary Rodham Clinton for a 15-minute conversation about Libya and other issues. Not only is Corker a senior member of the Foreign Relations Committee, he is poised to become the panel’s top Republican next year, with a major say on President Barack Obama’s choice to succeed Clinton — possibly the divisive pick of U.N. Ambassador Susan Rice — and other diplomatic nominees.
Pragmatic and peripatetic, the conservative Corker has been deeply involved in negotiations on the auto bailout and financial regulations during his six years in the Senate, bringing the perspective of a multimillionaire businessman and a former mayor of Chattanooga to talks with Democrats and the White House.
“I don’t see him as a partisan,” said Democratic Sen. Mark Warner of Virginia, another multimillionaire businessman who has worked closely with Corker on banking and housing issues. “I think he’s somebody who’s willing to work with anybody who he thinks has a good idea.”
Next year, in the Senate’s new world order of a smaller Republican minority, the 60-year-old Corker is certain to play an outsized role, not only because of his high-profile standing on the Foreign Relations panel but because he is willing to work across the aisle in his eagerness to get something done. It is something of a rare trait in the bitterly divided Congress and one that often draws an angry response from the conservative base of the GOP.
It didn’t affect Corker politically. He scored a resounding win last month, cruising to re-election with 65 percent of the vote.
“I can count. I went to public schools in Tennessee and learned that to pass a bill it takes 60 votes and I know we have 45 going into next year,” he said in an interview with The Associated Press. “I came up here to solve problems, not to score political points, and yes, it was rewarding that after throwing ourselves into the most controversial issues there were and trying to solve things pragmatically we ended up in the place where we were in this last race.
“I’m more energized than I’ve ever been,” he continued. “The last two years of my first term were like watching paint dry because nothing was occurring and it was fairly discouraging and one has to ask oneself is this worth a grown man’s time.”
There were some doubts whether Corker, who made a fortune in real estate and had promised to only serve two terms, wanted to come back for more of a Congress riven by dysfunction and partisanship.
“At times I wondered if he would really run again,” said Tennessee Gov. Bill Haslam, who has known the senator for decades ever since Haslam’s older brother, Jimmy, the new owner of the Cleveland Browns football team, roomed with Corker at the University of Tennessee. “It kind of frustrates him, admirably so, when people aren’t focused on problem solving.”
Tom Ingram, a political consultant who has worked on Corker’s campaigns, said the senator deliberated on whether to run again. “He had to convince himself it was something worth doing before he did it,” Ingram said.
So Corker is back, with a black notebook that he grabs every morning to jot down problems and what he’d like to accomplish in a Senate where Democrats have strengthened their majority to 55-45, from 53-47.
On avoiding the so-called “fiscal cliff,” his 242-page bill challenges both Democrats and Republicans. Corker calls for a mix of tax increases and limits on Medicare and Social Security benefits. He would raise the Medicare eligibility age incrementally to 67 by 2027 and require wealthier retirees to pay higher premiums.
Although he would make all the Bush-era tax rates permanent, Corker wants to cap itemized tax deductions at $50,000, which would affect high-income taxpayers.
Corker recognizes that a final deal will be hammered out between Obama and House Speaker John Boehner, R-Ohio, but hopes his ideas earn some consideration.
A member of the Foreign Relations Committee since 2007, Corker has been frustrated with a committee that hasn’t produced an authorization bill in years and has become something of a backwater since its heyday of the 1960s and ’70s. His goal is to make the panel more relevant, and he wants to conduct a top-to-bottom review of all foreign assistance and spending by the State Department and U.S. Agency for International Development.
High on the list for the panel early next year will be nominations, including Obama’s choice for secretary of state and possibly U.N. ambassador.
For all of Republican Sen. John McCain’s recent bluster about Rice and her initial, much-maligned account after the deadly Sept. 11 raid on the U.S. diplomatic mission in Libya, it is Corker who will render his judgment and provide a crucial vote on her prospects. Corker has described Rice as more of a political operative but has avoided saying definitively where he stands on the potential nominee.
While other Republicans criticized Rice after her comments based on talking points prepared by intelligence officials, Corker traveled to Libya the first week of October to meet with officials there and learn more about what happened. The senator has traveled to 48 countries since he joined the committee.
“He’s viewed as conservative, but he’s independent,” said former Republican Gov. Don Sundquist.
After being appointed state finance commissioner by Sundquist, it was Corker who brought together various factions and helped Tennessee lure the Houston Oilers to the state. To complete the deal, Sundquist had to work with Nashville Mayor Phil Bredesen, a Democrat he had just defeated in the gubernatorial race.
Corker was like a child trying to make peace between warring parents. It paid off with the arrival of the Tennessee Titans in 1997.
One of Corker’s first jobs was good training for moving immovable objects, whether home-state politicians or members of the Senate. In college, Jimmy Haslam and Corker had a small business doing odd jobs, including removing tree stumps.
“I always give them both a hard time that the biggest thing they removed was the axle from two or three trucks that they ripped out trying to get the stumps out,” said Gov. Bill Haslam. “They were better at axle removal.”