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Republicans Pledge to Resist Abuse-of-Power Temptations

The Tennessee Waltz bribery sting.

Cronyism at the Tennessee Highway Patrol.

Deep-seated ethics problems at the state legislature.

These fits and starts of scandal marked the last years of Democratic control of the governor’s mansion and state legislature.

Now Republicans have a stranglehold on state government, complete with supermajorities in the House and Senate — the GOP doesn’t need a single Democratic vote to pass legislation.

Will this new supermajority keep their members from falling into a similar sewer of scandal and ignominy?

They say they can.

“You gotta stay focused on what you got to do, and you need to have good people elected,” said Sen. Jim Tracy, R-Shelbyville. “You’ve got to stay focused on what you’re here for. You’re here as a public servant.”

Not being distracted from the issues, such as smaller government and keeping taxes low, is also key, said Rep. Glen Casada, R-Franklin.

“Number one, stay in tune with what the voter wants,” he said.

That may be easier said than done. Two House members resigned their committee chairmanships recently after brushes with the law.

Rep. David Hawk, R-Greeneville, stepped down as chairman of the House Conservation and Environment Committee after his arrest in March on a domestic assault charge. He maintains his innocence, and the Greene County Criminal Court Grand Jury is scheduled to consider the case within weeks.

Rep. Curry Todd, sponsor of Tennessee’s guns-in-bars law, resigned as chairman of the powerful House State and Local Government Committee last year after he was jailed and charged with drunken driving and possession of a handgun while under the influence. The Collierville Republican pleaded not guilty, and a trial is set for Nov. 30.

Beth HarwellHarwell

“I think we need to adhere to the highest ethical behavior that we can at the body,” House Speaker Beth Harwell, R-Nashville, said. “That doesn’t mean there won’t be mistakes and that it’s not composed of human beings — it is. But it will be my job as speaker to make sure that we have the most ethical standards that we can.”

“There is caution that should occur in all states where there is a supermajority,” warns Peggy Kerns, the director of the Center for Ethics in Government for the National Conference of State Legislatures. “There need to be strong values in play of fairness and consistency, treating everyone the same and also, fair representation for the public.”

Having a supermajority doesn’t necessarily mean there will be more or less corruption, “but it doesn’t help,” says Bruce Oppenheimer, professor of public policy at Vanderbilt University.

He says, though, that the public must be vigilant to make sure that the supermajority doesn’t use its power to dismantle ethics safeguards — such as open records laws and civil service rules — that are already in place.

“That’s the key,” Oppenheimer said. “ When a party has a large majority what do they do about the safeguards against corruption that are already in place?”

It’s not just Tennessee that may face ethics problems that come with supermajorities.

From Salon.com:

Democrats in California gained their first supermajorities since 1883 in both the Assembly and Senate. Republicans captured total control of the North Carolina Capitol for the first time in more than a century. The GOP… won two-thirds majorities in the Missouri Legislature for the first time since the Civil War.

Republicans also gained or expanded supermajorities in places such as Indiana, Oklahoma and — if one independent caucuses with the GOP —Georgia. Democrats gained a supermajority in Illinois and built upon their dominance in places such as Rhode Island and Massachusetts.

This is a growing trend at the state level, unlike in Washington, D.C., where control is split between Republicans and Democrats: In the wake of Election Day, one party will hold the governor’s office and majorities in both legislative chambers in at least 37 states, the largest number in 60 years.

Of course, Tennessee doesn’t have a monopoly on ethics problems that stewed during one-party rule.

Republicans were able to make gains in the North Carolina legislature after continuous waves of ethics problems under Democratic rule. North Carolina House Speaker Jim Black, for example, resigned in 2007 and pleaded guilty to a federal corruption charge.

And there appears to be almost constant corruption in Illinois, for example, with the recent jailing of former Gov. Rod Blagojevich, as an exhibit.

And problems with one-party control may be seen at the national level, too.

From Slate, in 2004, when the GOP controlled both Congress and the White House:

The speed with which Republicans have forgotten their “core values,” as David Brooks put it after the vote on the (House Majority Leader Tom) DeLay rule, has been shocking. Earlier this year, a Boston Globe article made a few comparisons between the 1993-94 Congress that Newt Gingrich ousted and the one now ending. The Republican Congress added 3,407 pork barrel projects to appropriation bills in conference committee, compared to 47 for 1994, the last year Democrats held both houses. The Republican Congress allowed only 28 percent of the bills on the floor to be amended, “barely more than half of what Democrats allowed in their last session in power in 1993-94.” The number of nonappropriations bills “open to revision has dropped to 15 percent.”

And, of course, DeLay was sentenced to three years in prison for illegally plotting to funnel corporate contributions to Texas legislative candidates.

“I think we have to be humble,” said Tennessee Republican Party Chairman Chris Devaney. “I think all of us in any kind of leadership position need to be humble and know that we’re here … as servants of the people. They have to remember that.”

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

Forrester Touts Dems’ TN Victories

He concedes the Democratic party in Tennessee is in a superminority at the state legislature, but state Democratic Chairman Chip Forrester says he put in place a plan to march the legislature back to Democratic control.

Even so, Forrester, the longtime leader of the state Democratic Party, says that won’t happen overnight.

“We’re very, very excited about the four victories we had in the House,” Forrester said. “To defend all of our incumbents, which we did … we’re very excited about those victories.”

Indeed, Forrester counts Democratic Reps. Charles CurtissMark WindleDavid ShepardSherry Jones and Craig Fitzhugh and others among key wins.

“These are the people that represent our future,” Forrester said. “Even though we’re in the minority, we’ve moved the ball down field.”

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He also pointed to the victory of Metro Councilman Darren Jernigan, the Democrat running against GOP incumbent Jim Gotto in the Davidson County House District 60 race.

“We took Jim Gotto, a right-wing Tea Party nut job, out of office,” Forrester said.

Both the Senate and House Republicans hold supermajorities, which means Republicans can pass any law without a single Democratic voice.

Forrester will be stepping down from his post in January.

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

 

Great Hearts Gearing Up for Legislative Fight

Great Hearts Academies, whose application for a charter school was denied by the Metro Nashville Public Schools board, is in Nashville for the long haul, a spokesman told TNReport this week.

And lobbyists for the Arizona-based nonprofit will by no means be playing hookey from the Tennessee Legislature during the 2013 legislative session.

“The Nashville board’s disregard of the truth and repeated defiance of state law illustrates why an impartial Tennessee charter school authority is needed,” Great Hearts attorney Ross Booher said. “Since the governor and legislature gave all children the freedom to attend public charter schools, the board apparently now fears that many more parents and children will choose public schools that the board does not completely control.”

Booher: “If Tennessee puts in place an impartial state charter authority, Great Hearts would re-apply to that authority.”

The idea of creating a statewide authority that would give the OK to charter schools likely to become the next hot-button education reform issue at the Capitol.

Great Hearts is still hoping to ultimately open five schools in the Metro Nashville area, Booher said.

Booher also weighed in on the Metro school board’s decision to boot the Great Hearts charter application.

“The board has a major conflict of interest. It is desperately trying to stem the tide of public charter schools that it sees as its direct competition when it should be embracing innovation and partnerships that provide children with additional school options,” Booher said. “Allowing parents to freely choose the public school that is best for their individual child is the ultimate in local control.”

The company, headquartered in Phoenix, was mired in controversy during its long-running battle with the Nashville school board as it tried to open a West Nashville charter school.

Critics said that the Great Hearts school would lack diversity and would not provide adequate transportation for students.

“Any suggestion of that is just completely baseless,” Booher said. “It’s not borne out by the facts at all. When you look at the plan that Great Hearts had for Nashville … it exceeded what Metro does for its own students at schools of choice.

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

Senate Aide Fired, Caught Doing Political Work on State Time

An aide to Sen. Ophelia Ford was fired Tuesday in the wake of a TNReport story that showed him apparently conducting political work while collecting his state paycheck.

“As of today, Derek Hummel’s employment with the Tennessee General Assembly has been terminated,” Office of Legislative Administration official Tammy Rather told TNReport via email.

Hummel had been executive secretary for Ford, D-Memphis, since April, drawing a $30,468 annual salary. He’s also been working for the Phillip North campaign, a Democrat locked in a tight race against Republican Steve Dickerson for a Davidson County state Senate seat.

Over the past three months, Hummel had apparently been conducting political activities during state business hours on his state-issued computer, according to phone records, Facebook postings and documents reviewed by TNReport.

Hummel had 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.

Attempts to reach Ford have been unsuccessful. A call and an email to the Phillip North campaign have now gone unreturned for more than 48 hours.

Hummel abruptly hung up on TNReport on Monday.

TNReport will update this story if we hear back from any of those we have contacted.

According to a state law called 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 made 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 for working 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 was 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.

’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.

Pressure Builds Over State-Local Control of Charter Schools

Republicans who laud government that stays close to the people are finding themselves in a pickle now that a local school board has bucked state law.

Metro Nashville Public Schools’ Board of Education ignored orders by the Tennessee Board of Education to usher the charter school Great Hearts Academies into the district last week — the second such rebuff in a month. The Metro schools board contends that the first of five schools, run by a Phoenix-based charter school operator, would lack diversity and pander to an affluent Nashville neighborhood.

The Great Hearts dispute has exposed Republican leaders to criticism that they espouse local control only when it suits their aims.

“This whole thing just flies in the face of Republican philosophy when you have the big bad state coming down telling the local school board they have to comply with the law,” said Jerry Winters, a lobbyist with the Tennessee Education Association, the state’s largest teachers union, which has been resistant to the emergence of school choice.

Charter schools have enjoyed favorable treatment at the hands of GOP Gov. Bill Haslam and his education department. The administration’s agenda for reform has included tougher standards for teacher tenure, tying teacher evaluations to test scores and an expansion of charter schools.

Metro schools’ refusal to grant Great Hearts permission to open a school has sparked statewide debate over whether local approval is best. Great Hearts announced that it would not challenge the Metro schools’ decision.

“It’s really been kind of shocking to watch a government openly acknowledge and violate the law,” said Matt Throckmorton, executive director of the Tennessee Charter Schools Association.

Disgusted by the ongoing feud, Throckmorton and other charter school advocates are pushing for the state to assemble an outside agency to review and approve charter school applications, allowing charter operators to leap-frog over the local school district.

Details on how that system would operate are still in the works.

Throckmorton says local school districts should still be involved with discussions about pending charter schools. But politics are getting in the way of opening quality schools that could find more effective ways to teach children, he said.

Opponents of the idea say locally elected school board members — rather than a handful of appointed officials in Nashville — should decide whether a charter school is the right fit for the district and the community.

“I think people are wanting to make this an example to justify their intent to make a statewide authorizer,” said Lee Harrell, a lobbyist for the Tennessee School Boards Association which is opposed to charter schools skipping over local officials. “Often you hear the best decisions are made on the ground. (State approval) would totally fly in the face of that mentality.”

Several top state officials are staying quiet on the matter, including Department of Education Commissioner Kevin Huffman, who in August said the state would take “appropriate action” to see to it that Metro schools approved the charter school.

He declined to comment on the latest denial for Great Hearts, although emails obtained by the City Paper indicate he was keenly interested in getting the application approved and has engaged in discussions about the need for a statewide authorizer.

The governor’s office has also been silent on the issue, although officials say they were waiting for Haslam to return from his economic development trip in Japan last week. Prior to Metro schools’ first rejection of the Great Hearts application, Haslam said he saw no need to develop a state panel to approve charter schools.

Senate Education Committee Chairwoman Dolores Gresham has also declined to comment.

But Republican legislative leaders who have repeatedly offered messages about the importance of local control hint that they’d be open to a plan giving the state more power.

“I am extremely dismayed that the Nashville School Board is focused on limiting parental choice and educational opportunity for children,” Senate Speaker Ron Ramsey told TNReport in an email. “It is unfortunate that the board seems mired in the old education politics while the rest of the state is moving forward.”

House Speaker Beth Harwell agreed, calling the decision by MNPS “simply a mistake for our children” and saying the Legislature “will revisit this issue” when they come back in January.

“We believe in local government and local school boards. But when they don’t give opportunities for our children, then that’s a problem,” she said.

Charter schools are privately-owned but publicly-funded. Supporters say they offer more flexibility to innovate and create choice and competition, while detractors say they drain public money and students, leaving traditional public schools with the students hardest to educate.

Charter school performance is generally mixed. Last school year, two charter schools ranked among the best performing institutions in the state, while five other charter schools reflected some of the worst student academic records statewide.

State Revenues Returning to ‘07 Levels, Haslam Lays Out Budget

Gov. Bill Haslam said the budget he’ll pitch to legislators Monday evening is one that reflects the state’s priorities “with strategic investments, painful but necessary cuts and some savings for the future.”

The governor will reveal his budget proposal for the coming year tonight in his second State of the State address before a joint session of the state’s General Assembly.

In a preview of his address Monday morning, Haslam told reporters that increased flexibility in the budget-planning process due to “stronger than anticipated revenue” was balanced by $160 million in one-time federal money leaving the budget. While the state had more revenue to work with than the administration had expected, Haslam said the amount of money coming in is just now beginning to return to where it was in 2007.

Among the budget priorities highlighted by the governor were the restoration of a number of core services that had been cut in the previous budget and a continued effort to build up the rainy day fund. He also called attention to tax cuts he has proposed to the state’s grocery and estate taxes and said he will propose a pay increase for state employees. However, he did reiterate his opposition to across-the-board raises.

“I want to emphasize, I don’t think giving nominal, across-the-board raises is the best way in the long run to recruit, retain and reward great employees,” he said.

The governor has often compared his vision of an ideal government to that of a successful business and forecast a similar message for tonight’s address.

“What you’re going to hear from me tonight is this: State government’s role is to provide the very best service we can at the very lowest price for our citizens,” he said.

Follow @TNReport and #TNSotS on Twitter for live updates during the governor’s State of the State address, beginning at 6 p.m. tonight.

 

‘Netflix Bill’ Due for Rewrite

An online piracy measure passed into state law last year will be debated again this legislative session, in an effort to exclude a provision that made it unlawful for people to share passwords for accounts like Netflix and Pandora with their family.

House Majority Leader Gerald McCormick, R-Chattanooga, has indicated he plans to reintroduce the concept in committee in the next few weeks so that lawmakers can clean up the confusing language.

“The intent of it, and hopefully the final result, will be that people can share passwords if they’re family members and that type thing,” McCormick said. “But we can keep it illegal to get those passwords and just send it out to hundreds of people or thousands of people, either to make money off of it, or just to steal the work of the songwriters.”

That’s how the measure was pitched to state lawmakers last year by a lobbyist for the Recording Industry Association of America. McCormick said he was not presented evidence during those hearings of such widespread theft, but that the industry said its aim was to get ahead of any potential problem — as it had failed to do in the late 1990s when file-sharing sites like Napster surged.

McCormick said his aim was to protect Nashville’s recording industry from theft of its intellectual property.

“Actually it wasn’t a Netflix bill,” McCormick said. “It was for the recording industry. We’re trying to discourage people from stealing songwriter’s property.

“I never even thought about Netflix until I started getting e-mails from all over the world.”

McCormick said he realizes a bill to deal with subscription services may not be necessary because companies such as Netflix already have certain safeguards and contractual language in place to restrict use of the content.

“We mess up, too. Sometimes we have to go back and fix our mistakes, and that’s what we’re doing here,” McCormick said.

1-2-3, Go! Redistricting Maps Advance

Tweaks to the lines on redrawn Democratic districts in the state House came down to something like a game of Rock-Paper-Scissors.

House lawmakers approved the new maps 67-25-3 Thursday. Speaker Beth Harwell said she had politely encouraged Democrats to throw some votes her party’s way for the sake of bipartisanship appearances.

“I said to (Democratic Caucus Chairman Mike Turner), ‘If we are making these concessions for some of your members, I would appreciate votes from your caucus,’” she said.

That left the #1 and #2 Democrats to figure out who would make Harwell feel appreciated.

“I’d like to think it was a little punitive, maybe, because the discussions were pretty hot and heavy,” Turner, of Old Hickory, said. … “I thought it was worth that to save a couple of our members.”

Turner threw down rock to Leader Craig Fitzhugh’s paper in their session to make sure the speaker got at least one leadership vote from their side. Turner was one of six Democrats who voted in favor of the Republican-drawn maps, while Fitzhugh toed the party line.

“Everybody we had that was paired, we tried to do so something about that,” said Turner, who had been one of the most vocal critics of GOP maps. “In areas where it didn’t impact their members, they decided to give us a couple of those back.”

In the final hours before the map was approved by the chamber, Republicans agreed to make these concessions to preserve incumbent advantage:

  • Separate Democrats Sherry Jones and Mike Stewart, who had been drawn into the same south Nashville district.
  • Return Rep. Eddie Bass, D-Prospect, to the district he represents now. He had been lumped into the same district as Rep. Vance Dennis, R-Savannah.
  • Adjust the lines in the district represented by Harry Tindell, D-Knoxville.

Democrats pitched a handful of other amendments to the maps on the House floor, mainly attempts to make more Shelby County districts represent a greater percentage of minorities. All those attempts failed.

The maps fell “way short on minority representation,” according to Turner, although he said he wanted to talk to the Tennessee Democratic Party, the General Assembly’s Black Caucus and other “interested parties” before deciding whether to challenge the lawsuit in court.

Harwell said the Democratic votes symbolize that the map has bipartisan support.

“Bottom line is, surely it sends a clear message that a majority of the members in this General Assembly is pleased with it, and I think the people of this state will be well represented by this map,” she said. “No one can doubt that we have drawn these lines fairly, that there’s proper representation from each district.”

In the new map, sitting House members who would have to run against other legislators (unless they relocated) are situated in:

  • District 28 in Hamilton County: Tommie Brown, D-Chattanooga, and Joanne Favors, D-Chattanooga
  • District 31 in Sequatchie, Bledsoe, Rhea and part of Roane counties: Jim Cobb, R-Spring City, and Bill Harmon, D-Dunlap
  • District 86 in Shelby County: Barbara Cooper, D-Memphis, and G.A. Hardaway, D-Memphis
  • District 98 in Shelby County: Jeanne Richardson, D-Memphis, and Antonio Parkinson, D-Memphis

The Senate is expected to vote on its maps and OK the House drawings Friday. If approved by both chambers, the maps will go to the governor for his approval.

Amazon Compromise Mirrors McNally’s ‘Grace Period’ Idea

Sen. Randy McNally, chairman of the Senate finance committee, says retailers still upset with Amazon’s tax agreement with the state aren’t likely to get a better deal than the one negotiated by the Haslam administration.

McNally, R-Oak Ridge, one of the key figures in trying to have the company start collecting sales tax from Tennesseans, said further action in opposition to the deal is up to those other retailers, but he said, “Certainly, if I was asked to give them advice, I would tell them that this is far and away the best deal they could get.”

Gov. Bill Haslam announced Thursday that the state has a new deal with Amazon, in which the online retailer will begin collecting sales taxes in 2014, while Amazon commits to increasing its job total in the state to 3,500 positions on an investment of up to $350 million.

McNally said he hopes this will settle the matter of Amazon’s tax status and suggests that the overall online sales tax issue should go through the courts to be resolved nationally, because he believes Congress is unlikely to act to bring uniformity to the collection of state sales taxes.

Recent reports say Amazon has its sights on locations in Rutherford and Wilson counties, as it seeks to grow its presence in Middle Tennessee, the latest development in a story that began last fall when former Gov. Phil Bredesen gave Amazon the ability to avoid collecting taxes in exchange for building distribution centers in Hamilton and Bradley counties. Haslam’s administration and Amazon negotiated the new arrangement.

The retail group Alliance for Main Street Fairness immediately objected to the Haslam agreement, saying 2014 is too long to wait, noting in particular that the deal gives Amazon three holiday shopping seasons before it has to collect. The brick-and-mortar retailers continued their campaign over the weekend with newspaper advertising objecting to the deal, saying California got an agreement for Amazon to collect beginning in 2012 and that the same should apply in Tennessee.

Haslam said he will submit the new deal in the form of legislation, to be considered when the General Assembly convenes in January. McNally and Rep. Charles Sargent, R-Franklin, chairman of the House finance committee, had initiated legislation this year and twice submitted requests for opinions from state Attorney General Robert Cooper on the matter. Cooper’s most recent opinion said no retailer can escape responsibility to collect the tax, although he said the commissioner of Revenue has wide discretion.

Haslam saw McNally at the funeral in Madisonville Oct. 2 for Lance Cpl. Frankie Watson, a Marine killed in Afghanistan. The governor told McNally that day he wanted to talk to him a couple of days later about Amazon. McNally was scheduled for surgery in Oak Ridge that Tuesday, so Haslam filled him in then on the plan. The surgery was why McNally did not attend the press conference at the Capitol on Thursday.

Haslam told McNally of the two-year forgiveness period on the tax collections and that after that the playing field would be level. McNally had suggested a two-year “grace period” as a possible solution to the matter in July. McNally said Friday he was taking no credit for the final agreement and that Haslam had not suggested that McNally’s idea was the catalyst for the deal. Neither did McNally ask if his idea had been the foundation of the arrangement.

“It just seemed to be in the best interest of the state,” McNally said.

One of the key elements of Amazon’s strategy appears to be centered on geographical factors.

The Nashville Business Journal posted a story online Friday morning saying Amazon will choose a site in Murfreesboro off Joe B. Jackson Boulevard for a facility involving 1,100 jobs and a capital investment of $87.5 million. Another facility, the Business Journal reported, would be in Lebanon, near Interstate 840, that would create up to 450 full-time jobs, a $51.5 million investment.

“I know they’re looking at sites that are close to Interstates,” Sargent said Saturday. “The same with Lebanon. They can get on Interstate 40, they can get on Interstate 840 and go all the way across to I-65 and I-24.

“Transportation is a big thing to them.”

Access to multiple Interstate highways, waterways and other modes of transportation, especially the presence of FedEx in Memphis, make Tennessee an attractive location for many different companies, state officials say.

In a recent interview with TNReport, Economic and Community Development Commissioner Bill Hagerty said logistics, one of the six major clusters of businesses the administration has identified in the state, is the premier cluster, even ahead of auto manufacturing and health care.

“You’ll see a theme running through all the clusters,” Hagerty said. “You’d be surprised. Even with health care, if you look at all the medical device operations around Memphis, they’re there because FedEx is there.

“An orthopedic firm can have their products on a plane and in a surgical field tomorrow. So they can inventory all these expensive things there, make them to order if they need to, and have it in the operating room the next day.”

Neither McNally, Sargent nor Sen. Bo Watson, R-Hixson, Senate speaker pro tempore, said they were aware Friday of sites being chosen by Amazon. Sargent said he got the chance for the first time Thursday to sit down and talk to Paul Misener, vice president for global public policy for Amazon, after a press conference at the Capitol on Thursday announcing the deal.

“They’re very excited about it,” Sargent said.

The Business Journal reported the Rutherford Industrial Development Board approved a 20-year tax break for Amazon. The Tennessean in Nashville reported the same tax break for the potential site in La Vergne or Murfreesboro, as well as a 15-year tax break for Amazon for a second, smaller facility in Rutherford County.

The Tennessean also reported incentives in Wilson County that include a $3.8-million tax break offered by the county and a break of $439,000 to $550,000 in property tax breaks by the city of Lebanon, with Amazon agreeing to make an annual payment of $28,900. State officials have said there are no state incentives in their deal with Amazon beyond standard incentives for job training and infrastructure.

Rep. Joe Carr, R-Lascassas, emphasized Friday that the deal was not done and that reports he was hearing of were premature.

“The last thing you want to hear is reports out of Rutherford County that Rutherford County got the deal and two weeks later learn that we didn’t get the deal,” Carr said.

Carr confirmed, however, that Rutherford County is very much in the running for sites to be chosen.

McNally, who had issued a formal statement on Friday expressing his support of the Haslam deal, seemed pleased with the outcome but voiced continued concern about the bigger picture.

“I think, hopefully, this would settle the issue with Amazon,” McNally said. “Now, long-term there is an enormous issue about out-of-state retailers that don’t have a presence in Tennessee that aren’t collecting the sales tax and how the states can address that.

“It’s been my theory that they ought to try to go back through the courts again. That probably would be the best option, because I doubt Congress would touch this with a 10-foot pole.”

The issue has been litigated most notably with a 1992 case involving Quill Corp., a mail-order company that made catalog sales. The North Dakota Supreme Court ruled there was sufficient presence, or nexus, of Quill in North Dakota that required Quill to collect the sales tax there. But the U.S. Supreme Court overruled the state court, saying the case did not represent sufficient nexus as it related to the commerce clause in the U.S. Constitution.

For years, states have turned an eye to Congress to settle the matter legislatively, but many observers, including McNally, see Congress as unlikely to get involved in an issue that would increase tax collections for the states. Haslam called again Thursday for a national solution.