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Local Tea Parties Denounce Alexander’s Voting Record, Call for Primary Challenge

Lamar Alexander, Tennessee’s senior U.S. senator, may have solid backing from the state’s Republican establishment. But he’s getting no love from local Tea Party groups and hard-core conservative voters who hope to see him unseated in next year’s GOP primary election.

Alexander was on hand at the Smyrna airport Saturday for an event honoring local Republican party chairmen, joined on stage by state GOP party head Chris Devaney and former Arkansas governor and presidential candidate-turned-TV-talking-head Mike Huckabee. Outside, meanwhile, 200-plus protesters, many waving signs and wearing red “Beat Lamar” t-shirts, gathered to denounce Alexander, attacking his voting record as too liberal and labeling the two-term senator a “RINO,” or “Republican In Name Only.”

Among the conservative protesters’ concerns were Sen. Alexander’s support of recent immigration overhaul legislation, an internet sales tax bill that Alexander helped write and votes relating to the “fiscal cliff.” But more than any one specific issue, many said, it is Alexander’s willingness to seek out moderate positions and compromise rather than taking hard conservative stances that are driving them to call for his ouster.

Ben Cunningham with the Nashville Tea Party who helped organize Saturday’s rally pointed to scorecards put out by conservative watchdog groups that rank lawmakers based on their voting histories and which, Cunningham said, consistently put Lamar Alexander on the most liberal end of the list of amongst Republican senators.

“Our concern is that Lamar Alexander’s very unconservative voting record is not being advertised as it should be,” Cunningham told TNReport.

“Lamar Alexander is not a conservative, he’s never been a conservative,” he continued.

“The entire Republican establishment is saying to the whole state of Tennessee ‘We’re not going to let you debate Lamar Alexander’s record. We’re not going to let you have an open debate of all of his votes,’” Cunningham said. For the GOP establishment, he charged, the race “is about the fact that [Alexander] has got an ‘R’ by his name and he’s been there for 12 years. You shouldn’t elect somebody on that basis.”

But so far, a viable contender has yet to emerge to challenge Alexander, who before going to the Senate served as U.S Education Secretary and Tennessee’s governor.

Speakers at the rally encouraged attendees to get involved by knocking on doors and making calls in the runup to the primary but stopped short of naming a specific candidate.

Ben Cunningham with the Nashville Tea Party said there were multiple people he knew who were considering a run and speculated that announcements would be made in coming weeks, but refused to disclose any names.

Professional wrestler and libertarian activist Glenn Jacobs, known by the stage name Kane, appeared to be mulling a run earlier this summer but has subsequently fallen off the radar. Clarksville Republican state Sen. Mark Green aroused speculation amongst conservatives earlier this month after he dropped out of a scheduled appearance at Alexander’s Saturday event. A staffer with Green’s office subsequently told the Tennessean that the cancellation was due to a family scheduling issue.

One name that did receive some chatter amongst protesters Saturday was that of Kevin Kookogey, a former Williamson County GOP party chair and president of a conservative mentoring group who spoke at the rally about his recent testimony before Congress on IRS targeting of Tea Party groups.

Asked if he was considering making a primary challenge to Sen. Alexander, Kookogey said he had been approached several times about the possibility and was “considering it.”

Tea Party Marshaling Anti-Obamacare Muster

Members of the Nashville Tea Party are planning a rally outside the state Capitol at noon Wednesday. Their hope is to put GOP lawmakers and Gov. Bill Haslam on clear notice that grassroots conservatives want Tennessee to disavow state-level cooperation and support for the federal health insurance exchanges outlined in President Obama’s healthcare overhaul.

“We’re calling it the ‘Just Say No’ rally, and we’re trying to send a message to the governor,” said Ben Cunningham, leader of the Nashville Tea Party. “We’re encouraging him to just say no to a state-run exchange and let the federal government own this disaster.”

Cunningham said he expects people from all three of Tennessee’s Grand Divisions to attend.

The Patient Protection and Affordable Care Act mandates that states choose between creating a state-run exchange where individuals may purchase health insurance eligible for federal subsidies or allowing the government to create a federally run insurance exchange.

Either way, those exchanges are supposed to be up and running by Jan. 1, 2014.

Haslam continues to say he has not made a decision on what course his administration will formally set — even after the federal government extended the deadline to make a decision to Dec. 14. Haslam and other state officials have complained that the federal government has failed to answer key questions as to how state-run exchanges would work.

Many governors, such as Rick Perry in Texas and Jan Brewer in Arizona, have said they will not set up a state-run exchange.

Tennessee tea partiers “would like Gov. Haslam to join with those governors and say, ‘No, we’re not going to be a branch office of the federal government,’” said Cunningham. He said a petition to that effect is circulating and “is getting a very good response.”

“If they (the federal government) want to implement this program, have at it, but our experience in the past with Medicaid, with education funding, is always a bait-and-switch situation where they fund much of the expenditures on the front end, and then the states are left with huge expenses on the back end,” Cunningham said. “There is some indication now that the phone calls and the emails that the governor is getting are overwhelmingly against a state exchange.”

The governor has indicated that while he opposes Obamacare in general, and he thinks the health exchanges are a bad idea overall, he’d prefer it if the state run them rather than the feds. However, high-ranking Republicans in both houses of the state’s General Assembly have indicated that support is lacking among the majority party for the state taking on that responsibility.

Trent Seibert can be reached at trent@tnreport.com, on Twitter at@trentseibert or at 615-669-9501.

’Tis the Season: Campaign Time on Taxpayer Dime

A Tennessee Senate staffer appears to have been doing political work while collecting a full-time state paycheck, an apparent violation of state law, public records and documents reviewed by TNReport show.

Derek Hummel has been executive secretary for Sen. Ophelia Ford, D-Memphis, since April of this year, drawing a $30,468 annual salary. Over the past three months, he has also been conducting political activities during state business hours on his state-issued computer, according to phone records and Facebook postings.

Hummel has identified himself as field director for the Phillip North for State Senate campaign. Hummel was paid $625 in September by the North campaign, according to campaign finance filings released last week.

When TNReport visited Ford’s office at the Capitol last week to interview Hummel, no one was present, but Hummel’s desk was strewn with what appeared to be campaign material, and political documents were visible on his taxpayer-funded desktop computer.

During an attempt to interview Hummel today, he accused TNReport of violating state law by calling him on his government-office phone.

“You’re an idiot,” Hummel told TNReport. “I’m calling Bill Fletcher,” he added, before abruptly hanging up. Fletcher is a prominent Tennessee Democratic campaign advertising specialist and political strategist.

A call and an email to the Phillip North campaign have gone unreturned. Attempts to leave a message with Sen. Ford at her Memphis office were unsuccessful because her voicemail box was full.

According to a state law call the “Little Hatch Act,” state employees are prohibited from “engaging in political activity not directly a part of that person’s employment during any period when the person should be conducting business of the state.” The law mirrors the federal Hatch Act.

Examples that suggest Hummel may have been conducting political activities while collecting a state paycheck include:

+Under a Tennessee Democratic Party Facebook post, Hummel on July 25 at 10:07 a.m. urged readers to sign a political petition. Records signed by Hummel show he was working for the state that day between 8 a.m. and 4:30 p.m.

+Under an ‘Americans Against the Tea Party’ Facebook post, Hummel on July 26 discussed a Tennessee Democratic Party petition at 11:15 a.m., 11:19 a.m. and 12:51 p.m. Records signed by Hummel show he was working for the state that day, again 8 to 4:30. On one of those posts he makes during business hours Hummel mentioned how an intern for the Democratic Party had drafted the petition dictated by him “because, by state law, we can’t meddle in politics during business hours.”

+During a phone call taken by Hummel on a non-state cell phone — a recording was provided to TNReport from someone who said they made the call on Sept. 24 during work hours — he talked about working throughout the week on ‘get out the vote’ efforts in his role as field director for the North campaign. State records show he was paid by the state that day.

+On a Tennessee Democratic Party Facebook post that links to North’s views on a Nashville school issue, Hummel commented on Sept. 18 at 3:48 p.m. State records show Hummel was paid by the state for working that day.

+On a ‘North for Senate’ Facebook post on Sept. 21 at 4:21 p.m., Hummel’s cell phone number is posted with a message asking volunteers to call. State records show that Hummel was paid for working that day.

+On Hummel’s desk and on web browser tabs on his state desktop computer, TNReport last week observed campaign documents connected to the North campaign and campaigning in general. (TNReport did not open any desk drawers or search the computer other than to look at the tabs that were open on the computer screen.)

It is not uncommon for staffers in the Tennessee General Assembly to participate in political work, but it is common practice for those staffers to provide notice to the Senate’s chief of staff or to Legislative Administration officials saying they are taking hours off, days off, or a leave of absence for that political work.

In the case of Hummel, it appears he did no such thing: The Senate “does not have any correspondence from Mr. Derek Hummel concerning leave of absences,” Connie Ridley, director of the Office of Legislative Administration, said via email in response to a records request from TNReport.

A spokesman for the lieutenant governor’s office, to whom all Senate staff officially report, declined comment.

Charges of elected officials and their staff using taxpayer dollars to boost political activities are heard occasionally throughout Tennessee.

For example, earlier this year, a reception sponsored by East Ridge city officials for a congressional candidate drew questions about how local taxpayer money was used.

The reception, for Scottie Mayfield, a Republican running for Tennessee’s 3rd District seat, took place while employees were on the clock, and about $80 in city funds were spent on snacks for the employees, according to the Chattanooga Times Free-Press.

City Manager Tim Gobble insisted that the reception was not meant to be an endorsement and was an attempt to be “hospitable,” but other city leaders have said it was an inappropriate use of city funds, according to the paper’s report.

And last year, Democrats accused Lt. Gov. Ron Ramsey, R-Blountville, of violating the Little Hatch Act, saying it was illegal for Ramsey to use his publicly funded office to promote his “Red Tape” initiative because it is funded by his political action committee, RAAMPAC.

Ramsey denied doing anything wrong, and soon after, Drew Rawlins, the executive director of the Tennessee Bureau of Ethics and Campaign Finance, said he saw no evidence of ethical wrongdoing.

But Rawlins also said his office does not handle alleged Little Hatch Act violations. Because the Little Hatch Act is a criminal statute, that task would fall to Tennessee’s district attorneys, as it did two years ago in Bradley County.

An investigation was launched after Bradley County’s Board of Education chairman and vice chairman sent an e-mail to 800 county school employees endorsing a county mayoral candidate in the Republican Primary, according to the Cleveland Daily Banner.

No charges were filed in that case.

House Republicans Running Rally-Round-the-Incumbents Campaign

Tennessee Republicans are looking to tighten their grip on state government in the Nov. 6 general election by winning an even larger legislative majority than they’ve enjoyed the last two years.

But party leaders, particularly in the House, say a first priority is to ensure that members of their caucus survive challenges in the Aug. 2 primary.

House Majority Leader Gerald McCormick and Caucus Chairwoman Debra Maggart both say incumbents winning primaries is a prime concern. In McCormick’s words, incumbents deserve to be “rewarded on election day” for responsibly governing since they began dominating state politics two years ago.

“Certainly, we want our incumbents to win,” said the Chattanooga Republican. “We think everyone, or close to everyone, is going to win. And then we feel like we can pick some seats up this November as a result of our staying focused on the issues voters care about.”

Maggart sees it as her unwavering responsibility to ensure sitting lawmakers get their jobs back next year. And she faces her own tough re-election challenge against Courtney Rogers of Goodlettsville, a retired U.S. Air Force lieutenant colonel.

Supporting a candidate can mean everything from political donations from individual lawmakers or the well-funded House GOP Caucus, appearances from high-ranking lawmakers such as Speaker Beth Harwell and even coming out to knock on doors or work political fundraisers.

“My job is to bring the incumbents back,” Maggart told TNReport. “That’s our job — my job — as the caucus leader.”

But while GOP legislative leaders say they see it as their rightful role to protect the already-in crowd, some prominent outsiders who speak for constituencies typically seen as leaning Republican argue that in reality, principles ought to take precedence over the power of incumbency.

The automatic impulse to protect incumbents is rarely the answer — and more often likely part of the problem, argues Ben Cunningham, spokesman of Tennessee Tax Revolt and a founder of the Nashville Tea Party.

“People tend to stay in office far too long and have a sense of entitlement about being re-elected, and that tends to be reinforced by the reality,” Cunningham told TNReport this week.

He said anytime voters can get candidate variety and real ballot-booth choices, it is rarely a bad thing.

“I think that’s one thing most Tea Party people have in common — that we tend to be skeptical of the sense of entitlement that comes with long-term incumbency,” Cunningham said. “I simply don’t feel any loyalty to someone because they’re an incumbent.”

In the primary election this summer, 21 House Republican incumbents face off against GOP challengers who say they better represent the party’s values or are better suited for the job than the sitting state rep. Four GOP state senators have primary opponents.

“Part of the problem is that some incumbents have become addicted to power,” said John Harris, a lobbyist for the Tennessee Firearms Association, which lost a long-fought battle with Republicans this year over allowing gun owners to stow their weapon in their locked car at work. The TFA supports Maggart’s opponent, Rogers, as a result of GOP leaders stonewalling the bill instead of allowing debate and an up-or-down vote on the House floor, where Harris says the legislation would likely have won approval.

His squabble with Maggart over gun rights is “merely a symptom of a much deeper problem with the personal agenda of incumbents and the caucus within the General Assembly, primarily the House of Representatives, to raise funds to retain power and their offices rather than to demonstrate by their actions that they can be trusted with a return to office,” Harris said.

“The question citizens need answered is, Who controls such a system?” Harris said. “It is not the citizens. It is elected officials who are seeking re-election. It is the caucus. It is a product called ‘incumbent protection’ even from members of their own partisan parties.”

The state Republican Party wouldn’t comment specifically on how they balance supporting incumbents versus ensuring those elected sport solid Republican values. But it tipped its hat to the current GOP powers that be in the Legislature for lowering taxes and reducing spending.

“We work very hard to recruit solid, conservative candidates to run for office, and encourage voters to listen to all the candidates and what they stand for when selecting our party’s nominees,” said TNGOP Chris Devaney.

VIDEOS: ‘We Stand With Gibson’

A rally thrown by Tea Party activists in support of Gibson Guitar Corp. in light of a recent federal raid on the company drew hundreds to Nashville Saturday to listen to music and speakers denounce government overreach.

Guests at the “We Stand With Gibson” rally included Gibson Guitar owner Henry Juszkiewicz, U.S. Rep. Marsha Blackburn, conservative radio talk show hosts Phil Valentine, Steve Gill and others. They urged the audience to let the federal government know their displeasure with the government over the Aug. 24 raid in which federal agents confiscated imported wood, guitars and files from Gibson’s Nashville and Memphis locations.

The U.S. Fish and Wildlife Service argues that the wood, grown in India, was illegally imported in violation of Indian law and the U.S. Lacey Act. Gibson maintains that the wood is, in fact, legal — and that the Indian government approves of its exportation to the United States where companies like Gibson and others use it in the manufacture of stringed musical instruments.

 

Tea Partiers In Tune With Gibson

Organizers for Saturday afternoon’s “We Stand With Gibson” rally/concert in Nashville say the event is geared more toward people seeking a good time than looking for a political rant fest.

Clearly, though, with a line-up that, in addition to musical performers, includes conservative radio hosts Steve Gill and Phil Valentine, and Memphis Tea Party founder Mark Skoda — as well as U.S. Rep. Marsha Blackburn and Gibson Guitar’s CEO himself, Henry Juszkiewicz — there’ll no doubt be plenty of fire-breathing to accompany the cool harmonies.

The purpose of the event is, after all, to raise awareness and fuel outrage about an incident that one function organizer says has galvanized anti-government sentiment like no other in quite a while.

“I don’t think any other issue has captured the passions of tea partiers like this one has in the last year,” said Ben Cunningham, a blogger and spokesman for Tennessee Tax Revolt.

“There is near universal agreement among the tea party and conservative groups that the raids — the one that occurred in August and the one that occurred two years ago — were an overreach by the federal government. It was an abuse of power and authority,” said Cunningham.

The purpose of the “We Stand With Gibson” event is to say to the federal government, “Back off,” Cunningham said during a press conference Wednesday.

The gathering, which is scheduled to kick off at 1 p.m. at the Scoreboard Restaurant & Sports Bar, was also planned with the idea in mind of people coming together in support of others facing difficulty and uncertainty — like they did during the floods of 2010, Ken Marrero, a blogger and rally organizer, added.

The victims in this case, said Marrero, are Juszkiewicz and the employees of Gibson. Their place of work was inundated back in August with federal agents who allege Gibson illegally imported wood from India in violation of a recently amended U.S. law known as the Lacey Act.

The agents seized wood, guitars and other company property, according to the company. No charges have been filed, although the U.S. Fish and Wildlife Service, the agency conducting the investigation, is reportedly considering filing a criminal complaint.

In a sworn statement filed last month, U.S. Fish and Wildlife Special Agent Kevin L. Seiler wrote that after reviewing Juszkiewicz’s public statements in the wake of the raid on Gibson, “it is clear that Gibson understands the purpose of the Lacey Act, and understands that the (seized company property), which is fingerboard blanks, are not finished fingerboards and thus Gibson is aware that its order for fingerboard blanks was an order for contraband ebony wood or ebony wood which is illegal to possess.”

Marrero said he supports the idea of government regulating natural resource extraction and prohibiting Americans from violating the environmental and wildlife protection laws of other countries, which is ostensibly the purpose of the Lacey Act.

But he thinks the federal agents stepped way over the line in the Gibson case, both in the way they are interpreting the law and the way they executed the raid.

Marrero said it is his understanding that Indian law — at least according to the Indian government — has not been violated. India’s deputy director-general of foreign trade reportedly stated in a Sept. 16 letter, “Fingerboard is a finished product and not wood in primary form,” and that the “foreign trade policy of the government of India allows free export of such finished products of wood.”

Marrero wonders why the United States government “is enforcing a law that the Indian government doesn’t even consider is a violation.”

“How is that right?” he said.

Cunningham, too, condemns what he described as the “hideously complex” web of regulations that businesses and taxpayers have to understand, negotiate and abide by to remain in compliance with federal law.

“We have all kinds of these 2,000-page laws that empower bureaucrats to be petty tyrants,” said Cunningham. “Think of the IRS code.”

In any event, said Cunningham, when government officials do perceive that some nonviolent violation of a rule or regulation has occurred, the proper course is to “call (an alleged violator) up on the phone and say, ‘We are concerned about this law and your compliance with the law.'”

“You don’t send armed agents with their guns drawn into their corporate headquarters. That is an abuse of power, and that is our government abusing the power that we grant to them,” said Cunningham. “And that is why we are here — we are holding them accountable for this abuse of power. It’s got to stop. And we the people are coming here on Saturday to say that to our federal government.”

Matheny Predicts More Tort Reform at Doctors Town Hall

House Speaker Pro Tem Judd Matheny says the Legislature will probably seek more tort reform next year, and Gov. Bill Haslam, no fan of the new federal health care law, says it’s time to start talking about how to implement the new act anyway.

Those developments show that health care issues remain very much on the table for Tennessee. While tort reform is usually thought of as a legal issue, proponents of limiting malpractice and wrongful death lawsuits have cited litigation as a driver of health care costs.

Matheny, R-Tullahoma, told a Doctors Town Hall audience at Lipscomb University in Nashville on Saturday that he hopes this year’s tort reform legislation is only “the first step of several steps in issues we hope to deal with in regard to tort reform.”

During a break in the formal discussion, Matheny elaborated on those plans and pointed to a so-called “loser pays” effort that could be the next measure in tort liability in Tennessee.

“I just know the General Assembly is very interested in additional tort reform,” Matheny said.

“‘Loser-pays’-type scenarios are ones we will look at, especially with regard to what would be perceived as malicious lawsuits.”

Matheny said potential legislation would address situations where there are possibly second or third appeals in cases.

“A case in point would be if somebody filed a third appeal and the answer was the same as the first two, whether both are in the negative or both in the positive. That person would be responsible for the legal fees,” he said.

The approach would be to confront those who are seen as abusing the system. It would follow a tort reform measure passed this year and spearheaded by Haslam that put caps on non-economic damages in civil cases at $750,000, although the law creates exceptions in cases that involve intentional misconduct, destruction of records or activity under the influence of drugs or alcohol.

Those caps go to $1 million in what are categorized as “catastrophic” cases, which are defined in the law as conditions of paraplegia, quadriplegia, amputation, especially severe burns or the wrongful death of a parent leaving minor children. The new law also caps punitive damages at two times compensatory damages or $500,000, whichever is greater.

Matheny said he would like to see the caps in the law go even lower — to around $250,000 or $300,000 — but he said he did not foresee the Legislature taking that path.

“There will probably be a lot of (tort reform) legislation filed, but there will probably be one thing that rises to the top and is carried by the body,” Matheny said. “I don’t know what that will be yet, but I think there will be some additional tightening.”

Matheny said he has not spoken to Haslam about further tort reform and that Haslam probably wants to give the most recent law a chance to take effect. But there seems to be little doubt that the Legislature is prepared to consider further steps on the topic.

“It’s important to remember that sometimes progress is made in baby steps and after a three- or four-year period maybe we can look back and really see some true progress,” Matheny said.

Spine surgeon says government doesn’t help

The town hall audience Saturday at Lipscomb was an overwhelmingly conservative crowd, with 10 panelists and audience members expressing dislike of the 2010 federal health care overhaul.

Dr. Lee Heib, a spine surgeon and president of the Association of American Physicians and Surgeons, spoke of her practice as a small business owner.

“If you have to run a small business, if you have to produce something, when has the government come in and made your job easier or more cost-effective? It’s never done that. Trust me, it doesn’t do it in medicine either,” she said.

Andrew Schlafly, general counsel for AAPS, who went to law school with President Barack Obama, said the fundamental problem with the new health care law is that it forces citizens to purchase coverage.

“That is the foundation of it, and that is basically un-American,” Schlafly said. “To force people to buy something you don’t want to buy, it’s never been done before. You can look through the Constitution. You can read it backward and forward and ask yourself, ‘What gives the federal government the authority to force us to buy something we don’t want to buy?'”

That’s the question raised by the Thomas More Law Center in Michigan, which has asked the Supreme Court to review a lower court decision upholding the Patient Protection and Affordable Care Act. The Sixth Circuit Court of Appeals, in Cincinnati, ruled against the center earlier this summer, finding the law to be constitutional.

Legal challenges regarding the act also are pending in the Fourth and 11th circuits. It has not been determined if the high court will take up the issue.

The town hall meeting included state Sen. Mae Beavers, R-Mt. Juliet, who spoke to the audience of about 125 people about her Tennessee Health Freedom Act (SB079), which Haslam has signed, which says government cannot force a person to purchase a product as the new federal law does, and prevents penalties against those who wish to opt out of the system.

Beavers also touted her Health Care Compact legislation (SB326), a states’ rights measure, which would allow states to join forces to control their health care funds. That bill passed in the state Senate this year but not in the House.

Ben Cunningham of Tennessee Tax Revolt told the audience the federal health care overhaul would be such a burden on the state it would force talk of a state income tax.

U.S. Rep. Marsha Blackburn, R-Brentwood, spoke of Tennessee’s problems with TennCare as an example of what can go wrong with government-run health care.

Haslam: State should prepare to implement health care act

Haslam, meanwhile, said in a recent interview that time is a factor in whether to address the new federal health care legislation, commonly referred to as “Obamacare,” which has been overshadowed recently in Washington. The most significant aspects of the law do not kick in until 2014, but the law requires states to be ready in several ways when that time comes.

“I quite frankly am surprised that as the clock ticks closer to 2014 there’s not more conversation,” Haslam said.

But he noted one group is paying very close attention to the issue.

“There is a lot of conversation among governors, saying, ‘We need to be prepared to implement this if it does happen,'” Haslam said, adding that “it would be irresponsible not to.”

The 2010 election year brought a significant uproar about the new law, with talk of repealing it after a new Congress was put in place. But Haslam, who opposes the plan, said the furor about the law has seemed to subside since then.

“A year ago, in the middle of the campaign, that was all the talk,” Haslam said. “I don’t know if in Washington the whole budget and debt issue has eclipsed everything else. I don’t know if that’s the situation.”

The foremost issue in the new law is for states to set up exchanges — marketplaces involving competing insurance plans — where people would shop for what best fits their needs. States must set up their own exchanges or allow people to move into a federal exchange.

Tennessee is already working with various stakeholders and what are known as Technical Assistance Groups (TAGs) on the state’s options. The state is accepting comments and questions about the exchange process at insurance.exchange@tn.gov.

Haslam said the law’s implementation in Tennessee would likely be run through TennCare and the state Department of Finance and Administration. A finance spokeswoman referred questions on the matter to TennCare.

“We’re still watchfully waiting for guidance from CMS,” said Alyssa Lewis, communications manager for TennCare, referring to the federal Centers for Medicare and Medicaid Services. “We’re seeing what’s going to happen when there is more certainty. It’s to see what the options are, and what the appropriate options are for Tennessee.”

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GOP Showing Little Taste for Lower Food Tax

Now that Tennessee Republicans are “large and in charge” of state government, as minority Democrats like to snidely put it, they seem to have lost their appetite for cutting the state’s sales tax on food.

Even though Tennessee is looking at $62.3 million in excess revenues over the last 11 months, lowering the tax isn’t likely to happen any time soon, say powerful majority-party politicians.

Nevertheless, Tennessee Democrats are floating a plan to give part of the overage back to taxpayers — by reducing the 5.5 percent tax on food and making additional funds available for “needs-based” college scholarships.

The Volunteer State now charges a 7 percent sales tax on items other than food and is one of seven that offers a reduced rate on groceries, although 31 states exempt most non-restaurant food purchases from sales taxes.

Republicans, who consolidated their political power in the 2010 election promising a more fiscally disciplined, taxpayer-friendly state government, last month scoffed at Democrats for offering up a plan to reduce the tax on food.

“It’s just irresponsible,” House Republican Leader Gerald McCormick told TNReport. His preference is the state keep any extra tax collections safely locked up in the government’s savings account for spending later in leaner times, like when Washington starts ladling out smaller helpings of federal largess.

Lt. Governor Ron Ramsey claims he’d “love to eliminate the food tax.”

Not now, though.

“I hope and pray that Tennessee will soon be in a position to do just that,” the Blountville Republican said in an e-mailed statement shortly after the Democrats served up their tax-cut idea. “But a revenue blip does not a surplus make.

“While the new revenue numbers are encouraging, the last few years have taught us that we cannot afford to be cavalier with the contents of our treasury,” he said.

Ramsey, who recently proclaimed that “a basic philosophical difference between Democrats and Republicans” is that the latter favor taxpayers keeping their own money in times of revenue surplus, accused Democrats of “craven political posturing” for proposing a tax cut on groceries in the current fiscal climate.

Requests through Ramsey’s spokesman for further comment and explanation from the lieutenant governor went unanswered.

Republicans didn’t used to be so hostile to the idea of a tax cut for Tennesseans who purchase food. Indeed, some, like Kingsport Rep. Tony Shipley, once upon a time got elected promising to push for food-tax relief.

In 2007, Sen. Mae Beavers was at the forefront of the legislative effort to reduce the food tax, ultimately by half a cent. At the time, she complained that wasn’t enough. But now she’s just irritated the matter has popped up again.

“I really take offense to (Democrats) making a political issue out of it this time when they had a chance to take it all off a few years ago,” said Beavers.

Gov. Bill Haslam was more conciliatory towards the proposal, saying he “100 percent” agrees with Democrats’ desire to reduce taxes on groceries when the state collects excess money from taxpayers.

In principle, anyway. He questions though whether tens of millions of dollars in over-collections truly represents a “surplus” at this time.

“If we had a surplus, we should not be keeping the money. I couldn’t agree more,” the governor told TNReport. “It’s just way too early to say that because I have a feeling we’re going to have to make some hard calls.”

The catch, Haslam says, is state government would need to consider cutting millions of dollars in services now covered with $160 million in one-time money, address rising education costs and weather instability from the economy and federal government in order to reduce the tax.

“There’s a whole lot of stuff in there I can guarantee the Democrats and most of the Republicans don’t want to cut,” Haslam said. “My first word would be to the Democrats, how do you feel about that $160 million in services? Are you ready for all of those to go away, because our overage is not enough to do both.”

Rep. Craig Fitzhugh, the leading Democrat in the House, says he sees nothing particularly ludicrous about proposing to cut “one of the highest sales taxes on food in the entire country.”

“If that’s absurd, well, we need more absurdity in government, because I think that’s an excellent option that we may have,” said the Ripley Democrat.

Lawmakers this year considered a plan to raise the tax on soda in exchange for lower food taxes, but that issue went nowhere. Lawmakers did manage to lower taxes on investments for some senior citizens by raising the income benchmark by $10,000 to exempt more individuals and couples from paying the Hall income tax.

While legislators play political ping-pong over the excess taxpayer dollars, state government observers of various ideological stripes agree the partisan bickering ought to be set aside in favor of a serious policy-driven conversation.

“It’s not enough to rely on the whims of either political party to return excess revenue to taxpayers,” said Justin Owen, executive director of the Tennessee Center for Policy Research, a free-market think tank which has advocated a reduction in the grocery tax.

What the state should do is automatically kick any excess revenues back to the public at the end of each fiscal year, he said.

Ben Cunningham of Tennessee Tax Revolt said it seems obvious to him “any surplus ought to be returned to the taxpayer.”

“The time to give tax revenue back to the families to put back in the family budget is in the good years, this way you even out the ups and downs of tax revenues and you better control the size of government,” said Cunningham, a prominent voice in Tennessee’s tea-party movement.

Tennesseans for Fair Taxation, a coalition of liberal activists, unionized workers and progressive advocacy groups, has long pushed for reducing Tennessee’s reliance on a sales tax. TFT argues Tennessee’s tax on food is perniciously high — that it, in essence, constitutes a “tax on life.”

“Groceries represent a much bigger portion of low-income families’ budgets while it only represents a small fraction of most high-income families’ budgets,” argues TFT. “By eliminating the tax on food, the average family would save enough annually to buy a whole month’s worth of groceries.”

TFT’s preference for instituting a state income-tax to offset reduced revenues from a lower or eliminated grocery-tax doesn’t seem likely to gain much traction in the GOP-dominated Legislature, where the wheels are in motion to constitutionally ban an income tax.

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TCPR Questions Merits, Fairness of Tax Incentives

The Tennessee Center for Policy Research was often critical of the Bredesen administration for its incentive packages aimed at attracting business. And now the nonprofit free-market think tank is scrutinizing the Haslam administration for the same issues.

TCPR issued the 2011 edition of its annual “Pork Report” Tuesday, saying it has found $371 million that state and local governments in Tennessee have wasted over the last year.

The report takes immediate aim at $140 million in state and local funds that will go to appliance maker Electrolux to build a manufacturing plant in Memphis. That deal was struck by former Gov. Phil Bredesen’s economic development team, but the Pork Report notes that current Gov. Bill Haslam has pledged $97 million in taxpayer money to follow through on the commitment.

Haslam has consistently said he intended to honor such commitments made by the Bredesen administration. House Republican Majority Leader Gerald McCormick told TNReport recently that while he finds it “distasteful” to offer tax incentives to entice companies to relocate to Tennessee, “unfortunately, that’s the playing field that we’re on.”

As with previous years, the Pork Report hammers on prodigal politicians and big-spending bureaucrats who in TCPR’s view play far too loose with tax dollars. Taxpayers can ill afford ill-advised spending in these troubled times, said TCPR president Justin Owen, who added that spending done in the name of stimulating the sluggish economy is often particularly suspect.

“As this year’s Pork Report shows, it’s times in economic calamity where citizens are faced with waste in their government as government tries to fix the economic problems,” Owen told reporters at a press conference Tuesday.

“We see this year in the Pork Report hundreds of millions of dollars being spent on economic development incentive packages, on energy and environmental programs,” he added. “While these things are often sold as a way to spur job growth, particularly the economic development incentives, they amount to nothing more than taking money out of certain taxpayers’ pockets and handing it to others — oftentimes large corporations in the form of corporate welfare.”

Owen said rarely have proponents of incentive packages demonstrated an appreciation of existing businesses.

“I will say that Gov. Haslam has signaled his intent to re-evaluate this process,” Owen said. “You saw just this morning, with Startup Tennessee, he is wanting to start focusing on some of those existing Tennessee businesses.

“We encourage that, and we hope that his administration will continue to move in that direction rather than continue to hand money to certain companies at the expense of others.”

But Owen said the state has spent “wildly” on environmental programs.

“We all know about the former governor’s affinity for solar energy, and it appears this governor will keep that going,” Owen said. “We have another $14.5 million going into innovative project grants for solar, even though solar accounts for a very tiny sliver of the overall energy market.”

Owen said the state will spend another $13 million to buy forests and wetlands in conservation efforts across the state and pointed out that the land is being bought with funds from the real estate transfer tax, meaning the land is being purchased on the backs of homeowners.

The Pork Report itself is a 28-page booklet that identifies what the authors call “waste, fraud, abuse and mismanagement of taxpayer money by state and local government officials.”

“Despite a changing political landscape in Tennessee, wasteful government spending has not disappeared,” the report says.

The report does offer some solutions, calling on the Legislature to enact stricter spending laws. It calls for a “kicker” law that would require the state to “kick” surplus funds back to taxpayers. It says the state should strengthen the Copeland Cap, which has been on the books since 1978 and prevents the Legislature from increasing spending beyond the rate of personal income growth. TCPR says since a simple majority can override the Copeland Cap, that should be changed to a two-thirds vote requirement.

The governor’s office responded to the report.

“Governor Haslam is proud of the budget, which passed unanimously in the General Assembly and includes key investments, strategic reductions and savings for the future,” said David Smith, press secretary for Haslam, in an e-mailed statement Tuesday.

“He is focused on making Tennessee the No. 1 location in the Southeast for high-quality jobs, and while economic development incentives play a role in that process, it is also why he is focused on improving education and ensuring Tennessee has an attractive business climate.”

TCPR’s report also cited $13 million in federal stimulus funds going to the Port of Cates Landing in northwest Tennessee, noting Haslam has devoted $7 million from the state budget to help build the port. The Pork Report says statements by local leaders suggest “corporate welfare” might not have been necessary for the port, saying private money was secured to build the port if state and federal money didn’t.

The report criticizes $2.5 million in tax credits for purchasers of the electric-powered Nissan Leaf, which the report says could result in an increase in state gas taxes. Likewise, it challenges funds going to Wacker Chemie, the German chemical company locating a plant in Bradley County, and notes Haslam has pledged $34.6 million in the budget to expand the plant. The Wacker deal was another Bredesen project.

Elsewhere, the report takes a swing at state-run golf courses, calling for raising the greens fees or leasing the state’s courses to private businesses. The report called the course at Pickwick Landing State Park a “money-sucker,” saying it has cost the state $1.7 million since 2005.

On local government, the report takes note of news reports saying Davidson County Criminal Court Clerk David Torrence worked only three days a week, sometimes two, concluding he worked only 50 percent of the time for a job that pay $125,000 a year.

Ben Cunningham, spokesman for Tennessee Tax Revolt, called TCPR “an extraordinary resource to this state.”

“The most important budget of all is the family budget, the taxpayers’ family budget,” Cunningham said. “All other government budgets must first come from that family budget, and if that family budget is not healthy those other budgets will not be healthy.”

TCPR Releases Annual Report on Wasteful Government Spending

Press Release from the Tennessee Center for Policy Research, June 28, 2011:

“Tennessee Pork Report” Uncovers $371 Million in Government Waste Watchdog groups expose wasted tax dollars by state and local governments

NASHVILLE, TN – The Tennessee Center for Policy Research today released its 2011 Tennessee Pork Report, exposing that state and local governments across Tennessee wasted $371 million over the past year. For the sixth consecutive year, Tennessee’s premier free market think tank partnered with taxpayer watchdog Citizens Against Government Waste to document waste, fraud, and abuse at all levels of Tennessee government.

Examples of wasteful spending outlined in the 2011 Pork Report include:

  • $140 million to pay a European company to relocate to Memphis;
  • $14.5 million on an unnecessary solar energy program run by the state;
  • $2.5 million to provide tax credits to Nissan Leaf purchasers, which could lead to an increase in state gas taxes;
  • $131,000 to send utility district employees on exotic trips around the globe; and
  • $95,000 wasted by Nashville’s criminal court clerk who only works three days each week.

“Yet again, state and local governments failed to live up to taxpayers’ expectations by wasting their hard-earned money,” said Justin Owen, president of the Tennessee Center for Policy Research. “With our economy in dire straits, the last thing government officials should be doing is offering handouts to corporations, dreaming up whimsical environmental programs, and using taxpayer money for their personal use. It’s time for them to become better stewards of Tennesseans’ money.”

In addition to exposing wasteful government spending habits, the report also offers three effective solutions to eliminate waste and promote more responsible, transparent government. The report serves as an informative and valuable resource for policymakers and taxpayers alike.

“Tennesseans should arm themselves with the Pork Report and hold their elected officials accountable for government waste,” said Ben Cunningham, spokesman for Tennessee Tax Revolt, who participated in the report’s release. “Only then can we truly cut the fat in government.”

The litany of examples of government waste, fraud, and abuse in the 2011 Pork Report come from state and local government budgets, media reports, appropriations bills, state audits, and independent research conducted by the Tennessee Center for Policy Research.

An electronic version of the report can be found at:http://www.tennesseepolicy.org/wp-content/uploads/2011-Tennessee-Pork-Report.pdf or www.cagw.org. Hardcopies can be purchased by calling (615) 383-6431 or emailing info@tennesseepolicy.org

The Tennessee Center for Policy Research is an independent, nonprofit and nonpartisan research organization committed to achieving a freer, more prosperous Tennessee through the ideas of liberty. Citizens Against Government Waste is a nonpartisan, nonprofit organization dedicated to eliminating waste, fraud, abuse, and mismanagement in government.