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White Leaves Fiscal Review Committee

Press Release from Sen. Bill Ketron, R-Murfreesboro, and Rep. Curtis Johnson, R-Clarksville:

 

Thurman appointed Interim Director of Legislature’s Fiscal Review Committee

(NASHVILLE, September 21, 2011) – Senator Bill Ketron (R-Murfreesboro) and Representative Curtis Johnson (R-Clarksville) today announced that Legislative Budget Director David Thurman will serve as interim director of the Tennessee General Assembly’s Fiscal Review Committee until assuming his new position with the Department of Finance and Administration. Thurman will succeed Director Jim White who resigned yesterday to join the law firm of Jones, Hawkins and Farmer in Nashville.

“I’d like to thank Jim White for his years of service to the legislature and express my sincere appreciation to David Thurman for agreeing to help us usher in a new era at Fiscal Review,” said Sen. Ketron.

“We’ve consulted both Lt. Governor Ron Ramsey and House Speaker Beth Harwell regarding the interim appointment,” said Rep. Johnson. “They are confident in Mr. Thurman’s ability to fill this role and look forward to the appointment of a new permanent director.”

The Fiscal Review Committee is composed of six senators and nine members of the House of Representatives. The speaker of each house and the chairman of the Finance, Ways and Means Committee of each house serve as ex officio members. Committee members will begin the search for a new director immediately.

The Fiscal Review Committee was created by statute in 1967 as a special continuing committee of the General Assembly. The function of the Committee is to conduct a continuing review the fiscal operations of state departments and agencies. The Committee is also responsible for preparing fiscal notes for all general bills or resolutions which are introduced in the General Assembly that have a fiscal effect on state or local government.

Thurman will also continue to serve as Director of the Office of Legislative Budget Analysis.

Where Do Fiscal Notes Come From?

What’s the best way to find out whether the latest great idea your senator or representative has come up with is going to end up leaving you, the taxpayer, holding the financial bag?

Nothing, of course, is ever for certain when it comes to calculating the hidden costs or projected saving of programs and newfangled ways of conducting state business.

But by reading a proposal’s “Fiscal Note” — the estimated price tag attached to each of the thousands of bills filed in the Legislature every session — citizens can at least get a sense of the numbers lawmakers are themselves working with as they deliberate what they think ought to be on state government’s to-do list.

For example, a proposal to require businesses check the immigration status of new employees would cost the state $292,100 a year while a law that would require drivers to keep dogs out of the front passenger seat would bring in $1,100, according to the fiscal notes developed by a team of legislative staffers.

But while many lawmakers regard fiscal notes as reliable estimates of government costs, they are anything but error-proof, and, perhaps unsurprisingly, even sometimes colored by politics. The staff who develop the estimates rely on a series of judgment calls and information from a variety of sources, including state agencies which have been known to exaggerate the effects of bills they may dislike, some lawmakers say.

“If (departments) don’t want to do something, they give us an inflated fiscal note,” said Rep. Tony Shipley, R-Kingsport, who sits on the Fiscal Review Committee overseeing the office that develops the price tags. “Conversely, I suspect, if it’s something they wanted to do, they would deflate the fiscal note.”

“The fiscal notes are only as good as the information that’s given to the fiscal committee,” said House Democratic Caucus Leader Craig Fitzhugh who echoed that some departments tend to tweak their estimates depending on their view of a bill.

The question of the cost estimates’ accuracy came up last week during a debate over whether to require background checks of the people appointed to state boards by the House speaker and lieutenant governor. The Fiscal Review Committee staff said the cost of SB256 was “not significant,” which means it was estimated to cost less than $50. Tennessee Bureau of Investigation staff could just add the duties to their normal workload of performing background checks, the fiscal note said.

“I was just curious how this doesn’t cost anything,” said Sen. Jim Kyle, D-Memphis. “If they can absorb the cost into their day-to-day activities, we wouldn’t need a law for them to do this. The speaker can just call down there and say, ‘I’d like for you to check this out.’”

Even Sen. Mike Bell, a spokesman for the bill, said he can only rely on the estimate he’s given.

“I would say over my first five years, I’ve seen several fiscal notes, and I’ve wondered exactly how they’ve reached that point,” Bell, R-Riceville, said.

The man who oversees the churning out of the 3,000 fiscal notes per session said his staff tries to get as close to the truth as possible. Jim White’s signature goes on each of the documents, certifying the information is accurate to the best of his knowledge.

As staff executive director to the Fiscal Review Committee of eight years, White oversees a team of nine aides, including lawyers, economists and long-time government types who know their way around various state agencies. Each staffer specializes in a certain area of government and spends days or weeks calculating the total financial impact of a bill, even when the legislation never sees the light of day.

“We’re like the umpires in baseball. We call balls and strikes without fear or favor,” White said. “We need to stay distant from the political fray so that we don’t let all the political things that are going on affect what we do.”

But it’s impossible to be completely removed, and political spectators from both sides of the aisle, lobbyists and special interest groups take issue with the projections and often call White pressuring him to change the final numbers, he said. If he’s convinced his numbers were wrong, he does, White said.

“I don’t want to portray a picture that we’re simply stenographers. We’re not,” said White who said part of his office’s job is to double check the departments’ estimates to verify their accuracy.

“We recognize that everyone who has an interest in a fiscal note has an agenda,” he said. “There’s nothing wrong with that at all. And of course, that’s (how) the process works under our form of government. That’s the way it should work. But we have to filter that, if you will. We have to look at what we’re being told.”

White is elected each year by the lawmakers on the committee, which this session is chaired by Republican Sen. Bill Ketron with Democrat Charles Curtis as vice chairman.

Pinpointing costs can be hard when proposals would break new ground for which the consequences are difficult to predict.

Case in point: Gov. Bill Haslam’s proposal to lift the cap on charter schools and open enrollment to all students instead of just students who perform poorly on state tests or come from schools the state deems as failing.

White and his office say the bill would cost state government nothing, but local governments would lose $4.3 million in the 2013-14 school year. That cost would increase each year as education dollars follow students from traditional schools to charters and would ultimately cost local governments $24 million annually by 2023, according to the fiscal note. But those numbers were difficult to estimate, White admitted, because the state has never expanded the education system’s structure in this way.

Sometimes his office misses the mark.

In 2009, it estimated the state would earn about $41,600 a year from ticketing people for texting on their cellphones while driving, assuming law enforcement would issue about 10 tickets a day.

Ultimately, just 49 tickets were issued the first year the bill kicked in, bringing in $2,100.

“We’re not all-knowing by any means, and we do make mistakes. But when we make mistakes, we fix them,” White said. A recent Comptroller’s audit of the committee found nothing out of the ordinary, indicating that the staff’s estimates were “reasonable.”

The process of writing fiscal notes is one of the best examples of the well-worn political cliche that the legislative process is like making sausage.

Once a bill is filed, White assigns it to a staff member who then peppers state agencies and local governments with questions: How much will this cost and for how long? Why will it cost this much? How many people would it affect?

The staffer evaluates the information and compares it to similar legislation and fiscal notes from past years. What financial impact did those bills have? Did our old price tag line up with what the state actually dished out?

Then comes independent research. You name it, from federal government databases and the census to local government reports and research from outside groups like the National Conference of State Legislatures and the American Legislative Exchange Council, the office taps into numerous sources to figure out the final price tag.

The draft goes through three stages of editing before White gives it his stamp of approval.

While not perfect, the process still wins the confidence of top lawmakers.

Overall, legislators consider fiscal notes the most accurate estimate of how much lawmakers’ proposals will cost, said Sen. Randy McNally, an Oak Ridge Republican who sits on the Fiscal Review committee.

“It’s very reliable, and that’s what you want,” he said.