As I prepare to board the plane back to Nashville, I’d like to let you know a bit about how your state’s leadership has been working to improve Tennessee’s economy the past few days. As you may have read, a group including Governor Haslam, the Constitutional Officers and myself has been meeting with the various bond rating agencies in New York City making the case for Tennessee to retain its current bond rating.
We believe that Tennessee is clearly a AAA state and we told the folks at Fitch’s, Standard & Poor’s and Moody’s just that. The evidence we presented is truly overwhelming and regardless of what designation the New York rating agencies give Tennessee, I just wanted you to know how proud I am of the presentation that we made and how proud I am of the state in which we live.
As we all know, the national economy is in a tailspin. The Obama Administration’s fiscal policy has deepened recession and enlarged our debt. Considering the national outlook, Tennessee is in an outstanding position.
Few states could even dream of making the impressive case we did these past two days. While the nation trends downward, Tennessee is looking up toward the horizon.
We were able not only to relay our confidence to the bond agencies in New York – we were able to back it up with numbers.
The best evidence of our strength? People are moving here. They want our quality of life, our job creating environment and our low taxes. Our population growth and in-migration statistics are well above the national average. Families and businesses from around the nation are attracted by our low regulation and our newly reform-minded education system.
Our manufacturing sector remains remarkably strong and well ahead of the nation at large. Our private sector employment is rising and our state’s unemployment, while not at the rate we would like to see, has fallen at a rate faster than the nation’s.
Not only did we boast of our low taxes and our pro-business climate, we made clear our state government’s fiscal house is in order. If this recession continues or if the federal government ends up pulling the rug out from underneath us, we will have the structure in place to withstand the hit — far better and for far longer than many other states.
For instance, Tennessee’s unemployment trust fund stands at $381 million and we are one of only six states that have no outstanding obligation to the federal government. Our fund is in position to grow and protect us against a prolonged recession.
While other states are treading water, we were able to tell the rating agency analysts that the budget we passed this past spring contains $1.1 billion less in federal funding than the previous year and restored $70.4 million to our rainy day fund. Our budget is balanced on a current and reoccurring basis. Perhaps most important is the fact that our budget passed unanimously. Even Tennessee Democrats conceded that our conservative budgeting practices are best.
Our sales tax growth rate is up almost 50% over last year and August marked the 13th consecutive month in which total tax collections surpassed our budgeted estimates. Tennessee’s economy and tax revenue maintains low volatility relative to other AAA rated states.
A point we stressed in each presentation was Tennessee’s long standing commitment to fulfilling our obligations and carrying a small amount of debt. Since 1972, we have always funded our pension system. Tennessee is clearly committed to supporting its retirees and we have the flexibility to adjust benefits and premium sharing provisions. The Tennessee Consolidated Retirement System is internally managed and financially sound. Tennessee has operated a successful commercial paper program since its inception 11 years ago and is structured to provide the liquidity protection we need.
Tennessee ranks below most states in debt per capita and debt as a percent of personal income. Debt repayment remains aggressive. Put simply, we have very little debt and what debt we do carry we pay off quickly.
Most of all, we stressed Tennessee’s commitment to reform: whether education reform that strengthens the quality of our workforce and quality of life or tort reform which gives corporations and entrepreneurs a new level of confidence in Tennessee, this state is clearly committed to reform.
Tennessee’s leaders know how to work together. We may not always agree on every issue but Tennesseans should know that when the future of our state’s economy is on the line, we are a team dedicated to success. We are proactive. Our state is financially strong in the present and we have well thought out contingency plans for a soft economy. To state it plainly: Tennessee is not Washington.
That was our message. It was well presented and I hope and pray it was well received and that Tennessee retains the high ratings I believe it so richly deserves.