Hemlock Semiconductor of Clarksville laid off all of its nearly 300 employees months ago. But the company is still receiving regular payments from the state of Tennessee, including checks totaling nearly $720,000 just this month, reports WPLN. The Department of Finance is making good on $95 million of promised incentives, having paid $92 million so far, according to a state spokesperson.
“This is something that the current administration sort of inherited,” says Finance Commissioner Mark Emkes. “I think we do have to be very careful and very thoughtful going forward on things like this.”
Former Governor Phil Bredesen – a Democrat – made the deal to bring the solar industry player to Tennessee in 2008. Since then, competition from China has dragged down the price for polysilicon, which is the key component in solar panels manufactured by Hemlock.
Now in the minority, Democrats like Lowe Finney pushed a bill this year that would give the state a way to get back some money if companies don’t deliver on their part of the deal.
“Different legislators have talked about oversight for a number of years,” Sen. Finney (D-Jackson) said. “But it’s a matter of timing.”
The law was signed by Gov. Bill Haslam late last week. It passed unanimously, but that may be because it could be viewed as watered-down. The proposal still doesn’t mandate clawback provisions in future economic incentive deals.
The House approved 71-15 Monday evening a bill that would – if the Senate agrees – reduce automatic daily expense payments to legislators living near Nashville by $107 per day.
“I find it hard to look constituents in the eye when they ask, ‘Why we paying you 107 a day for a hotel you don’t use’,” said Rep. Rick Womick, R-Murfreesboro, sponsor of HB80.
Legislators now get $173 per day as an automatic “per diem” daily expense allowance. The bill eliminates $107 of that – the amount calculated to cover the cost of a motel room – for those whose residence is within 50 miles of the state Capitol building. They would continue to receive the remaining $66, deemed the amount needed for meals, and would collect mileage from the state for commuting daily.
House Democratic Caucus Chairman Mike Turner of Nashville criticized the proposal, saying the 50 mile rule was arbitrary and unfair. Womick said that is the standard set by the Internal Revenue Service, which considers the payments as taxable income for legislators living within 50 miles.
In fact, Womick said a secondary advantage was the IRS would collect less in taxes from the affected legislators, including himself. He said about $45 of the $107 he has been collecting has been “sent straight to Washington.”
The companion bill has been stalled in a Senate committee for weeks after Sen. Bill Ketron, R-Murfreesboro, said he wants to consider an amendment that would instead require legislators to submit an actual motel bill receipt for reimbursement.
Rep. Johnnie Turner, D-Memphis, also criticized the bill, saying legislators, regardless of where they live, do not receive enough for their work. She quoted Gov. Bill Haslam as saying at a recent reception for legislators that he calculates legislators actually are paid about 50 cents an hour for their labors.
Republicans in the House and Senate appear at odds over a proposal to reduce the amount of money lawmakers living within 50 miles of Nashville get as a daily expense allowance.
The House State Government Subcommittee approved Wednesday the bill (HB80) as filed and sponsor Rep. Rick Womick, R-Murfreesboro, promised to reject any amendments. In the Senate State and Local Government, meanwhile, the bill has been delayed to consider an amendment proposed by Sen. Bill Ketron, R-Murfreesboro.
As introduced, the bill would reduce the automatic “per diem” expense payment by $107 per day – the amount calculated to cover the cost of a motel room in Nashville. Lawmakers would still get $66 per day that is attributed to meals and other expenses, plus mileage for commuting.
Ketron said in the Senate committee that he has heard of a lawmaker, living more than 50 miles from Nashville, “milking the system” by sleeping in his office to avoid a motel bill. He suggested the bill be amended to instead require all lawmakers to file receipts for their motel for payment by the state.
But Womick told colleagues “you have my word” that no such amendment would be accepted. That came after Rep. Shelia Butt, R-Columbia, expressed concern that the bill could become a “slippery slope” with revisions that with paperwork requirements “could grow to cost more than the savings.”
Legislative staff estimates that the bill would save taxpayers about $250,000 per year.
NASHVILLE, Tenn. (AP) — A proposal to eliminate hotel allowances for some Tennessee lawmakers was put on hold Tuesday after a state Senate committee member said the reimbursement rules should be tightened for the entire Legislature.
The original bill filed by Sen. Ferrell Haile of Gallatin would eliminate a $107-per-night hotel payment for the 33 legislators who live within 50 miles of the state Capitol.
The proposal was on the verge of a swift vote in the Senate State and Local Government Committee before fellow Republican Sen. Bill Ketron of Murfreesboro proposed adding a requirement for lawmakers who live outside the Nashville area to submit hotel receipts.
“If we’re doing it for those under 50 miles, we should address those over 50 miles who are milking the system,” Ketron said.
Ketron said the change would alter the current practice of automatically paying each lawmaker the full daily allowance, no matter what they actually spend on their accommodations.
“There was a member who is no longer here who took the per diem and slept in his office and showered downstairs. That’s not quite fair,” Ketron said. “Or those who double up and triple up in to a motel room or an apartment.”
Lawmakers receive the hotel allowance for four days a week while the Legislature is in session, though most only stay in Nashville for three nights.
Ketron said he supports Haile’s bill, even though he is among the Nashville-area lawmakers who would lose the daily hotel allowance. The measure would continue to provide a $66 daily meals allowance for all lawmakers.
The original measure applying to just those living close to Nashville would cut an estimated $253,616 in lawmaker expenses per year.
Sen. Ken Yager, R-Harriman and the committee’s chairman, called for a vote to be delayed so staff could flesh out the language and estimated costs of Ketron’s proposal.
The companion bill sponsored by Rep. Rick Womick, R-Murfreesboro, was scheduled for a House subcommittee hearing on Wednesday.
(Note: Coincidentally, the $107 reduction in per diem payments is SB107. The daily per diem total is $173. The remaining $66 would continue to be paid to Nashville area lawmakers.)
A new state law approved this year to settle a dispute between the City of Memphis and Shelby County governments over $6 million in in-lieu-of-tax payments by Memphis Light Gas and Water “is constitutionally suspect.”
So says a state attorney general opinion, reported upon by the Commercial Appeal. The bill was sponsored by state Sen. Mark Norris and Rep. Curry Todd at the county government’s request and was questioned during floor debates as another attempt at state legislative intervention in a Memphis-Shelby dispute. The bill, designed to settle the tax dispute in the county’s favor, was opposed by Memphis officials.
Before the law, MLGW (Memphis Gas, Light and Water) made payments in lieu of taxes based on its gas system operations county-wide to the City of Memphis, which could then distribute it to the county.
Shelby County claimed that the city owed it $6 million in payments on the basis of the utility’s sales of natural gas outside the city limits. The governments have argued over the issue for years, and the city filed a lawsuit last year claiming it had actually overpaid more than $86 million tbetween 1981 and 2000, demanding part of it back.
Shelby County pushed for the bill, which became Public Chapter 984, to require MLGW to make the in-lieu-of tax payments that it owes the county directly to the county government. It won approval in the state House on Jan. 23 on a mostly partisan 64-25 vote and the Senate on April 26, also on a mostly partisan 20-3 vote, with Republicans statewide voting with Shelby County Republican lawmakers in favor of the bill.
But the bill as passed applies in only two counties — Shelby and Knox — because it is limited to counties that have adopted county-charter form of governments under state law and which have municipalities operating municipal gas systems.
Atty. Gen. Robert Cooper, in an opinion released Tuesday, said the law treats the in-lieu-of tax payments in the two counties differently from other counties, where the municipalities “may” make in-lieu-of tax payments to other taxing jurisdictions but it does so without articulating any “rational basis” for doing so.
The opinion says the state Constitution does not prohibit the state legislature from making distinctions in law based on various classifications of local governments, but does forbid classifications that “contravene some general law which has mandatory statewide classification.” The opinion was requested by state Rep. G.A. Hardaway, D-Memphis.
A U.S. Department of Labor report questions how well the state is looking after taxpayer and business dollars supporting unemployment payments to an estimated 120,000 people, according to Action Andy Sher. The report shows Tennessee has one of the highest “improper payment” rates among all 50 states. Tennessee’s rate was pegged at 14.47 percent, meaning it overpaid an estimated $310.7 million over a three-year period. Tennessee tied with Mississippi for 11th-worst in the nation.
State Employment Security Administrator Don Ingram said some aspects of the report are “misleading.” He blamed most problems on a “huge influx” of jobless Tennesseans during the Great Recession and its aftermath that overwhelmed the state’s 40-year-old mainframe computer.
Tennessee unemployment soared from 4.6 percent in March 2007 to a high of 10.8 percent in July 2009. The October rate of 9.6 percent is above the national rate of 9 percent. Last year, 418,000 Tennesseans filed claims for unemployment benefits.
“It’s not necessarily fraud, and it’s not necessarily an overpayment,” Ingram said. “We did not meet all of the requirements that the U.S. Department of Labor expects so far as processing of claims.”
Thirteen straight years of flat funding for the department’s jobs services program haven’t helped either, he said.
Chas Sisk has crunched legislative per diem numbers in various ways, starting with the observation that about $300,000 less of the automatic expense payments were made during the first six months of 2011 than in the same period last year’s session, a total of about $2.2 million last year versus $2.5 million this year.
The difference, of course, is that legislators had about three weeks less of daily meeting this year’s regular session than last and the per diem rate was down from $185 per day to $176 per day. The 32 state senators who served the entire 2011 term collected an average of $13,405 in daily payments, plus $2,856 in expenses, an analysis by The Tennessean found. The 98 state representatives who served the whole term collected an average of $14,135 in per diems, plus $3,108 in expenses. (The combined overall average: about $17,000.)
Republicans in the state House of Representatives received about $500 more in per diems and expense reimbursements than their Democratic counterparts. Senate Republicans collected nearly $900 more than Democrats.
Freshmen members of the House of Representatives collected an average of $16,770 in per diems and expense reimbursements, about $600 less than senior members of that chamber.
House Speaker Pro Tempore Judd Matheny, R-Tullahoma, led all state lawmakers in per diem payments, collecting $19,536, indicating he spent 111 days on legislative business. State Rep. Jimmy Matlock, R-Lenoir City, collected the least, $10,384, indicating he spent 59 days on legislative business.
Sens. Ophelia Ford, D-Memphis, and Jim Tracy, R-Shelbyville, tied for the largest per diems in the Senate, $16,368. Senate Democratic Leader Jim Kyle collected $11,264 in per diems, the least among members of that chamber.
Foster-care agencies, as well as parents, owed millions The Tennessee Department of Children’s Services owes foster-care agencies and other contractors at least $2.5 million in back payments, largely due to problems with the department’s expensive new computer system, according to the Tennessean. Last year, DCS launched the new system, called the Tennessee Family and Child Tracking System, or TFACTS, and immediately began experiencing problems accurately paying foster-care parents on time. For some parents, missed payments became such a concern that they considered returning their foster children to the state.
But TFACTS also has taken its toll on third-party providers that contract with DCS to place children in foster homes and provide services to special-needs youths.
Issues with TFACTS, which cost $37 million to install, have caught the attention of the Tennessee Comptroller’s Office and state lawmakers, who say they are concerned that late payments continue to be a problem one year after the system was put in place.
“I’m surprised that (DCS Commissioner Kate O’Day), coming from a background of working for a provider, has not addressed this issue after more than five months in office,” said Rep. Sherry Jones, D-Nashville.