GENERAL ASSEMBLY PASSES 2018-2019 BUDGET
The Tennessee House passed several key bills this week, including the state budget and major legislation to curb opioid abuse, as the 2018 session of the Tennessee General Assembly draws to a close. The $37.5 billion “no growth” budget proposes state government spending for the next fiscal year that begins July 1, 2018, and extends to June 30, 2019.
The balanced budget addresses opioid abuse, school safety, teacher funding, rural economic development and job growth while allocating additional funds for the care of Tennessee’s most vulnerable citizens. The bill focuses on the four “e’s” of Tennessee: employment, education, economic opportunity and enforcement of the law.
Fiscal Responsibility – The budget assumes a 3.2 percent rate of growth, well within the growth of Tennessee’s economy. During the past eight years under Republican leadership, the state spending on average has grown no more than two percent, compared to an average of seven percent in prior administrations. The bill also maintains Tennessee’s sound fiscal practices by increasing the Rainy Day Fund, the state’s savings account for emergencies, to the highest level in state history at $861 million. Adequate savings, along with Tennessee having the third-best funded pension plan in the nation, have resulted in the state receiving a triple-A bond rating from the three major credit rating agencies and being ranked among the best financially managed states in the nation.
Tax Relief — On tax relief, the appropriations bill continues the General Assembly’s ongoing efforts to provide widespread tax relief to Tennesseans. Over the past eight years, the legislature has cut $400 million in taxes, with those reductions amounting to $572 million in the 2018-19 budget year. Tennessee has reduced the sales tax on food by nearly 30 percent; implemented a complete phase-out of the Hall tax; eliminated the gift tax; cut business taxes on manufacturing, and phased out the inheritance tax. Tennessee has the lowest taxes in the nation as a percentage of personal income.
In order to help provide for tax reductions and spending priorities, the budget includes reductions in appropriations of $216.6 million, including the elimination of 335 positions. Over the past 8 years, the state has realized base budget reductions of $846.9 million, including the elimination of 2,759 positions.
Protecting Tennessee’s Most Vulnerable Citizens — On protecting Tennessee’s most vulnerable citizens, the budget as amended by the Senate provides $11 million to raise the Department of Intellectual and Developmental Disabilities (DIDD) hourly rate of reimbursement paid by the state for professionals providing care to Tennessee’s most vulnerable citizens. DIDD professionals provide care for those who have intellectual, developmental and age-related disabilities.
Similarly, the bill provides $136 million in additional funds for TennCare, the state’s Medicaid program. This includes $7.3 million for the state’s CHOICES program, which serves developmentally and intellectually disabled Tennesseans.
In addition, the Senate-amended budget restores $1.4 million for the state’s early childhood in-home visitation program for a total $5 million. The evidence-based program has proven to be a very effective early-intervention strategy to improve the health and well-being of at-risk children in the state. The bill also provides additional funds for the federally qualified health centers and certain dental services and vision screening for some of Tennessee’s most needy citizens.
Improving health care services is also the impetus behind a pilot program funded in the budget to help to struggling rural hospitals develop economic plans to ensure they are financially viable and continue to provide needed services. The program uses their economic standing in the community as a way of providing consulting assistance to distressed hospitals which need to change their operational models so they can be financially successful in an ever-evolving healthcare marketplace.
STATE BUDGET EMPHASIZES FOUR E’S – EDUCATION, EMPLOYMENT, ECONOMIC OPPORTUNITY, AND ENFORCEMENT OF THE LAW
The four “e’s,” education, employment, economic opportunity, and enforcement of the law, are the underlying drivers of Tennessee’s 2018-2019 state budget adopted by the General Assembly this week. The budget continues Tennessee’s strong commitment to education by providing an additional $247 million to fund K-12 education in Tennessee, including $105 million for teachers and $66.8 million for enrollment growth. It also provides $30.2 million for school safety and $13.3 million for the Response for Intervention Program which identifies the needs of struggling students to get them the help they need to succeed. The General Assembly has provided $1.5 billion in new funding over the last eight years for K-12 education, including $500 million more for increased teacher salaries.
As a result of these efforts, Tennessee students are posting the largest gains in the country and the highest high school graduation rates the state has ever seen. The state’s average ACT score reached 20.1, which is the highest recorded for Tennessee.
The budget also continues several important higher education initiatives. The bill provides $119 million in additional funding for higher education, including $10 million for Student Assistance Awards Financial Aid, $9 million for new equipment at Tennessee’s Colleges of Applied Technology, $1.5 million for a Mechatronics Program, $3 million for the engineering program at Tennessee Tech and $7.1 million for the Drive to 55 Initiative. The Drive to 55 Initiative challenges the state with the mission of getting 55 percent of Tennesseans equipped with a college degree or certificate by the year 2025. Presently, the state is on pace to meet the Drive to 55 goal two years early.
On employment and economic opportunity, the budget adds $133 million to aid job growth. This includes $71 million in infrastructure and job training assistance, $14.5 million for rural development initiatives, and $15 million to expand broadband access. Tennessee has seen strong rural job growth with a 31.7 percent increase in new job commitments over that of five years ago, as unemployment statewide is at record lows.
On enforcement of the law, the budget includes $2.4 million for law enforcement to fight Tennessee’s opioid epidemic. Crimes like robbery, theft, fraud and murder are committed in large part due to the influence of drugs. The act provides a total of $16.5 million to address opioid addiction which includes money for prevention, research, treatment, and recovery. In addition, $91,500 is included to address the use of gift cards obtained through retail theft which has been heavily linked to the purchase of opiates.
Additional money is expended, under the bill, for safeguarding the rule of law. This includes increased funding for elder abuse and $4.5 million for juvenile justice reforms. It also provides $1 million for courtroom security grants.
Other notable budget highlights in House Bill 2644 include:
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LEGISLATION HOLDING TEACHERS AND STUDENTS HARMLESS IN TNREADY ASSESSMENTS APPROVED BY GENERAL ASSEMBLY
The House passed legislation this week to hold teachers and students harmless in the TNReady testing assessments conducted for the 2017-2018 school year. The measure was adopted in an amendment and as part of a Senate/House Conference Committee Report to House Bill 1981.
Presently, state law requires the test to count within the range of 15 to 25 percent of a student’s grade. The legislation gives local boards of education the option to choose not to count the test at all, or to count it up to 15 percent of a student’s grade for this spring semester. The bill stipulates that no TNReady test scores from this school year can be used for teacher employment termination or compensation decisions.
The bill also prevents student performance and student growth data from the TNReady assessments from being used to identify a school as a priority school or to assign a school to an Achievement School District (ASD). It further provides that the assessments administered this school year cannot be used to assign a letter grade to a school.
The legislation comes after students in many Tennessee counties experienced problems with TNReady online testing this week, including a suspected cyber attack on Tuesday. Tennessee Education Commissioner Candice McQueen announced on Wednesday that she has asked the Davidson County District Attorney General to formally engage the Tennessee Bureau of Investigation and the State Office of Homeland Security in an investigation of the cyber attack. She also announced that she has engaged a third party with cybersecurity expertise to analyze Questar’s response to the attack.
Commissioner McQueen has stated that there continues to be no evidence that any student information or data was compromised in the incident.
