At a Boys & Girls Club event in Morristown Thursday, in between speeches, honors, and announcements of an upcoming steak-and-burger dinner, one of the speakers offered this advice to the crowd: If they hadn’t seen the financial news of the day yet, they shouldn’t look.
Gov. Bill Haslam was there. The comment came one-and-a-half hours after an event at Walters State Community College, where Haslam tried to rally a group of East Tennessee business leaders about Tennessee’s position in the economic picture, notwithstanding the national trend. On the same day, the state announced that unemployment hadn’t budged in July, holding at 9.8 percent.
There was a lot of economic news to digest.
“I honestly think we have a ways to go,” Haslam said, responding to a reporter’s question about the stagnant national economy after the Boys & Girls Club event at a local church. “Again, big-picture-wise, I think our country, until we solve some of the bigger issues, I keep saying it, but it’s a matter of confidence. I don’t think the confidence is there for people to invest in the economy.
“Until we do, you’re not going to see a lot of job creation.”
Haslam has talked a lot about Washington recently and the need to see substantive steps to give Americans the confidence Haslam says is lacking. He was asked if he had 30 seconds alone with President Barack Obama what he would say to him.
“Everybody has to realize we can’t keep going the way we’ve been going. I think people understand there’s pain involved at all levels, and this is a great time for leadership,” Haslam said.
“Leadership sometimes means, in hard times, stand up and say, ‘I don’t like this any more than you do.’ I think we’re going to have to do that in the states, and I don’t like having to make cuts either, but this is a time we have to look at the bigger long-term picture.”
Haslam already has next year’s state budget on his mind. Democratic legislative leaders recently proposed legislation giving a string of monthly revenue surpluses back to the people in the form of tax reductions on food and scholarships to offset tuition increases.
But Finance and Administration Commissioner Mark Emkes recently said the best use of those funds is to keep them in reserves. The administration is concerned about the financial future.
“If I felt like the economy was trending up, I think we might look at it differently,” Haslam said. “The Democrats are proposing, ‘Why don’t we refund some of the sales tax?’ The problem is, for how long are we going to do it?”
Haslam noted the state already knows it will have $160 million less in next year’s budget than in this year’s $30.8 billion plan. The $160 million was the amount used in non-recurring funds this year.
“If we’re going to fully fund BEP (K-12 education funding), and give any kind of raise, and do all those other things everybody thinks we should do, and make up for a $160 million gap, we’ve already got a lot of work to do,” he said.
Haslam told the business group that the state has handled its end well.
“I actually think we’re in a pretty good position,” Haslam told the group in a give-and-take session about economic development.
The meeting was to present the state’s economic development plan called JOBS4TN, and Bill Hagerty, commissioner of Economic and Community Development, joined the governor in the presentation. They asked for feedback — pros and cons — from the local business owners and managers.
Haslam told the group the state has the second lowest debt per capita in the country, a low tax rate and that he and his financial team just went to visit credit rating agencies in New York with a final visit to the agencies scheduled in September.
“We have a budget that is stressed and challenged, like yours is, and just like the federal government’s is, or is ready to be, but within that I think we have the room to do what we need to do,” Haslam said.
The state has AAA ratings from Moody’s and Fitch and a AA-plus from Standard & Poor’s.
“They’re obviously more worried about the condition of the federal government and how that might impact us, but given everything we know now, we feel very, very good about the position we’re in and our ability to be competitive,” Haslam said.
The administration Thursday announced a $26.6 million business expansion in Morristown by Meritor, which makes precision-forged gears for use in rear-drive axles in the commercial truck industry. It’s expected to mean 29 new jobs with the potential for 45 more. The plant now has 376 workers.
That followed reports of a six-year $100 million expansion of the MAHLE engine plant in Morristown that could lead to up to 140 jobs.
Haslam asked for input from the area business executives Thursday, and he heard about needs ranging from sewer lines to broadband Internet access. He heard about jobs going to China and complaints about the quality of students coming out of public schools. But he also heard about a good work ethic among Tennessee employees.
After the meeting, Haslam met with reporters and talked about that confidence factor.
“I actually do think the issue right now in our country — in Tennessee, but in our country — is businesses and individuals having the confidence to invest, whether it be to invest capital, build new buildings, hire new people. If you’re a consumer, to go out and be back in the market purchasing things,” he said.
“I don’t think that confidence level is here, mainly because of a lot of uncertainty coming out of Washington. Until that happens, I don’t think you’re going to see the economy come around.”
Haslam heads Friday to a Southern Governors Association meeting in Asheville, N.C.