Last week was a rough one for Bill Haslam — maybe his roughest since becoming Tennessee’s governor four years ago.
But in his budget-presentation address for the new fiscal year, Haslam seemed upbeat and optimistic Monday evening, both about Tennessee and his own prospects for political success in his second term at the helm of state government.
“The state of our state is enviable in many ways,” the governor told a joint session of the Legislature. “There are a lot of good things happening in Tennessee, and they’re being recognized in significant ways across the country.”
Haslam touted recognition the state’s received for being a leader in economic development, including adding “nearly 225,000 new private sector jobs” since he took office in 2011.
On the education front, the state’s become a national pacesetter in K-12 student improvement, he noted.
Haslam added that Tennessee is the first state government to offer to finance two years of community college or technical school for any graduating senior. That’s a point on which his administration was lauded by President Obama just three weeks ago in his State of the Union speech. Haslam said that of the state’s 65,000 high school seniors, 58,000 have applied for the program, which is called Tennessee Promise.
And Haslam didn’t abstain from addressing that big dose of bad news the Legislature administered to his administration last week. Just five days ago the governor’s plan to launch a “market-based” federally funded health insurance “pilot program” through the Affordable Care Act was abruptly derailed by Obamacare-abhoring state lawmakers.
But Haslam said he neither regrets presenting his “Insure Tennessee” plan to the General Assembly, nor believes the special session was a waste of time. He repeated his assessment that “too many Tennesseans are still not getting health coverage they need in the right way, in the right place, at the right time.”
Problems associated with the health care system aren’t going away, and neither, he hopes, is the conversation about reform. “Though the special session has ended, I hope we can find a way to work together to address those problems,” said the governor.
Haslam said he’s hopeful partisanship and personal agendas won’t get in the way of reform discussions going forward — like he said tends to happen in the nation’s capital. “To me the work we do here shouldn’t just be about winning or losing,” he said. “That’s what’s wrong with Washington.”
He lauded the state’s spirit of pragmatism and prudence, especially with respect to handling taxpayer money. “We have the lowest debt per capita of any state and among the lowest tax rates,” Haslam said.
“We are going to have to continue to look for ways to cut costs and reallocate resources,” he said. “One of the things that we like the best about Tennessee is our low tax structure, but that also means that we have limited revenues to fund the programs and services that Tennessee taxpayers rely on.”
All in all, Tennessee has “built a track record of fiscal restraint,” said the governor. And that’s going to be important on the road ahead because over the coming years the state “will face the same budget challenges that we have faced in the past four years.”
“Every year we have a limited amount of new money that is available from our revenue growth,” Haslam said. “That new money rarely keeps pace with our budget obligations and growing costs for education and health care.”
However, the governor’s theme wasn’t all about anticipating austerity. Indeed, his $33.3 billion budget contains about $700 million more in spending than last year. He said, though, that since taking office, his administration has “redirected more than $450 million so that we can keep funding our state’s needs while we are balancing our budget.”
Gov. Haslam pledged to state employees and teachers that, as long as revenue collections hold with with projections, they can expect raises in the coming year.
For state workers, Haslam is proposing pay raises and adjustments, which he said “amounts to a three percent pool.” However, those pay bumps won’t go across the board, but will rather “be tied to employee performance in addition to ongoing market adjustments.”
“We have worked hard to bring employee salaries up to be competitive with the private sector,” said Haslam. “After nearly two years of implementing performance evaluations, it makes sense to take the next step to move toward rewarding employees like the private sector does on their performance and results, not just on seniority.”
As for teachers, who last year were told they’d get raises that never actually materialized, the governor is holding out the prospect of setting aside about $100 million to kick down to local districts to inject into their payrolls.
Haslam said he’s trying to make good on his promise last year to try to make the state “the fastest improving state in teacher compensation.”
“We will continue doing all we can to work with educators and support them as professionals who are shaping the future of our children and our state,” said the governor.
As for higher ed, Haslam’s budget also calls for “fully funding” the Complete College Act at $25 million, with an additional $10 million for need-based scholarships for students. Another $285 million is included for campus building projects, facilities upgrades and tech improvements at colleges and universities around the state.
“The reason we continue to make these investments in education is we want Tennesseans to have the education, training and skills necessary to have a good paying, high-quality job,” said Haslam.
Of the total spending amount in Haslam’s budget proposal, $15.1 billion is state tax-revenue appropriations and $12.8 billion is federal. The remaining $5.4 billion would come from fees and bonds and other state government revenue sources.
Haslam’s budget also includes $36.5 million infusion into the so-called “rainy day fund,” bringing the total to $528 million.
The governor’s policy agenda for the regular legislative session is expected to be announced Tuesday.