Tag Archives: Hall Tax

Analysis: TN State of the State #TNSOTS2014

Unicorns and daisies in stunning monochrome

Unicorns and daisies in stunning monochrome®

So last night Gov. Bill Haslam delivered his 4th State of the State address of his term.

It was the same kind of “long on promises and short on details” self-congratulatory affair that we’ve come to expect from the Governor, complete with that good ole fiscal conservatism that says tax cuts for people who don’t miss the money are better than services for people who need them.

It was only imaginative in the way it manipulated or simply omitted facts to further a narrative of success that most people haven’t felt yet.

The Governor talked a lot about education. Nearly half of the speech was about it in some way or another. But to start, we should probably cover some of the other topics, so they don’t get lost in the mix.

Long List of “Accomplishments”

The Governor started off with a long list of “accomplishments”. Real long. Like almost two pages of them.

Lots of accolades from being named 3rd best managed state in the nation (I couldn’t find that, but I did find us at 16th last year which is better than most, that one needs a citation.

He also noted our award for state of the year from Business Facilities Magazine. The magazine notes the state brought in 6900 new jobs, but that’s less than 3% of the 237,700 people who were looking for work in December. Hardly a stellar performance for the people actually looking for jobs.

Haslam also hailed the drop in space state offices occupy. He says this will save the state money. Unfortunately, even his own numbers, as reported by NC5 in Nashville, tell a very different story. NC5 could only find about $450,000/year of savings, and further found the math the Governor has used is more than a little fuzzy. Good to know as we head into the budget section of the presentation.

$260m + -$340m = cut taxes

Haslam laid out new revenues for the upcoming year of $260m. Of course, his projections for this year are already $171m off the mark, so who knows if this is real or more fuzzy math from the Governor.

He also laid out $340m in new spending ($180m in Tenncare, $40m in employee health insurance, and $120m for education). That leaves an $80m hole in the budget.

The Governor defended tax cuts for estate taxes and the Hall income tax as “revenue growth” policies. This is a common GOP refrain, that makes no sense and that has been proven wrong over and over again.

Gov. Haslam offered no proposal that would cover the $80m dollar shortfall, so there’s that.

Education policy du jour

Of course, education was a huge part of the speech, since that’s the one thing just about everyone agrees the state should pay for (within limits). The Governor hailed the gains in the state’s overall TCAP scores for 2013. There’s no question that seeing scores go up is a positive, but a seven point jump in two years when the national average is only one point, should be a cause for skepticism. Further, going back to 2003, the states scores have increased by 12 points (seven of those between 2011 and 2013).

Had the gains been a gradual upswing (they weren’t) they would seem to be the result of a policy decision. But a seven point swing in two years looks more like an outlier than a trend. This is something we’ll have to watch more in the coming years to see if a trend is actually established. My gut tells me no. The state scores have hovered in the same 3 point swing zone since 2005.

He also hit on all the “blame the teachers” policies his administration has been pushing since 2011, and vouchers…something drains resources from already under-resourced public schools.

Tennessee Promises, Promises

The biggest attention grabber was the “Tennessee Promise” program. Under this plan, high school students would be given two years of free tuition at a two-year school to get an associates degree. If they chose to move on to a four-year institution, they could begin as a junior.

On the face of it, this seems like a good and progressive idea. Get kids who might not have the resources or the grades to make it in a four-year school to get their feet wet in a two-year school, and parlay that success into higher educational attainment overall.

But he devil is in the details, and the plan to use money from the Tennessee Lottery Scholarship fund raised the ire of the panned the funding idea because it would drain the fund, and possibly hurt four-year institutions in the state, by draining away college Freshmen and Sophomores.

I’m also skeptical about the “endowment fund” that would pay for this program. How will the endowment be administered? Will it have a board packed with cronies like just about every other government institution in the state? What happens if it runs out of money?

Seems to me, the money would be better spent as intended…to fully fund college, and that more money should be allocated to higher education to bring tuition costs down, and maybe even attract out of state students that pay way more than in-state students do.

As for the Community Colleges, they’re critically important, no doubt. But shouldn’t they be focused on the things they’re already successful at…providing access to some General Ed. courses for students and graduating students who aren’t on a four-year track.

On a political note, the idea that this General Assembly would pass a bill that amounts to a new entitlement is cute. I don’t see it happening.

So there it is. The state of the state. The response from the House Democratic Caucus can be found here.

Morning Coffee – Making Up for Lost Time Edition

I don't care what they say, time is NOT on your side, in fact, it hates you and wants you to be miserable

As Trace noted yesterday afternoon, Monday was a day filled with frustration and demon possessed technology. Hopefully, today will be less trying.

Things are heating up, and I’m not just talking about the weather. The looming statewide primary election in August has Republican Gubernatorial candidates running around looking for new ways to shank each other, even if it means ginning up some controversy as one commenter on this thread is suggesting.

So while Haslam, Ramsey and Wamp are sharpening their shivs and training them on each other, presumptive Democratic nominee, Mike McWherter is traveling the state talking to regular folks about their lives, their work, and the challenges of being an ordinary Tennessean…something the three Republicans in the race have no particular experience with at all.

Case in point, taxes. All three of the Republicans in the race are down with cutting taxes, but not the one we come in contact with daily. Nope these guys are talking about the Hall tax, inheritance taxes and franchise business taxes. Ever heard of them? Well, maybe the inheritance tax, but otherwise probably not if you’re not rich or a business owner.

Yeah, those three taxes combined add up to about 8.5% of total state revenue and touch fewer Tennesseans than any other revenue source. When asked why not cut the state sales tax, something that would actually help regular folks, you know, buy more or better food…well these guys just aren’t that into it. Way to be about the people guys. (BTW, McWherter is open to the idea of reducing the sales tax on groceries)

If you’re looking for some line of distinction between the Republican candidates and Mike McWherter, there it is. Republicans only want to help the rich, and McWherter wants to help ALL OF US. Way to go Mike!

Alright, this calls for some Coffee!

Speaking of Republicans, they’re counting their chickens and measuring for drapes, McWherter says not so fast fellas.

Over here on the west side the CA is looking at the Shelby County Sheriff’s race, and the political climate in general. In a follow up to a blog post from yesterday, Zack McMillin is seeing some strange bedfellows.

Memphis City Councilwoman Wanda Halbert is cautious about consolidation concessions. We’ll have more on this later once I have some real time to look at the proposals.

Speaking of the Memphis City Council, they want another peek at the settlement with Performa in the Beale St. controversy.

And finally, Memphis Mayor A C Wharton is holding a virtual town hall tonight at 6pm.

Alright folks, there’s your super double sized morning coffee, to hopefully make up for yesterday’s technology troubles. Have a great day and try to avoid those Republican shivs, I hear they’re pointy.