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Bulk of Record-Setting Year from Comptroller’s Fraud Hotline Involved Just Two Cases

Of the more than $1.1 million in government-funded waste, fraud and abuse reported through the Tennessee Comptroller’s anonymous tipster hotline last fiscal year, more than 85 percent of that “record achievement” came from just two cases.

One in Benton County and the other in Marion County, they involved more than $960,000 in alleged fleecing of public funds.

The smaller of the two involved nearly a quarter of a million stolen taxpayer dollars from the South Pittsburg Housing Authority and the South Pittsburg Elderly Housing Authority.

According to a “special investigation” report published by the Comptroller’s office last July, “various employees misappropriated at least $228,980” between 2009 and 2014. The report noted that while the two Marion County housing authority programs were “separate legal entities,” they shared the same office space and staff.

“The amount of theft in this case is alarming,” Comptroller Justin P. Wilson said in a press release at the time. “While it’s easy to blame the criminal behavior of two individuals, housing authority officials must also take the necessary steps to shore up a number of issues which allowed these thefts to occur.”

In the other case, about $733,000 in “unauthorized administrative disbursements” was uncovered subsequent to investigators probing a Benton County nonprofit that was raking in government money through the Tennessee Department of Human Services.

The Comptroller’s office issued a report in March alleging that managers and employees of ABC Nutrition Program in Camden — a food-for-needy-children program run from a home basement by a woman and her two adult daughters — improperly collected compensation and bonuses to the tune of more than $606,000.

Another $127,000 or so was obtained by ABC Nutrition to pay for “unauthorized construction and improvement disbursements” for the woman’s home, as well as “additional unauthorized administrative disbursements.”

The state Department of Human Services OK’d all the suspect spending, the Tennessean noted in a lengthy story on the case back in July.

Participants in the operations in both South Pittsburg and Camden are facing criminal charges.

“Since its inception (in 1983), the hotline has received over 21,000 notifications, including 951 notifications between July 1, 2014, and June 30, 2015,” according to an information sheet provided to TNReport by the state Comptroller’s office. “The hotline received 779 telephone calls and 172 submissions through the online reporting website. Of the 951 total notifications, 486 concerned substantive allegations of fraud, waste, or abuse.”

Featured NewsTracker Tax and Budget

Executive Budget Hearings Planned This Week

Gov. Bill Haslam is scheduled Monday to launch preliminary budget hearings with the various high-ranking administration officials whose departments make up the bulk of Tennessee state government.

Haslam’s Department of Finance staff, led by Commissioner Larry Martin, will assist the governor during the hearings, as will Chief Operating Officer Greg Adams and State Budget Director David Thurman.

As has typically been the case during his five-year tenure thus far, the Republican governor is asking that agency heads calculate spending-reduction “contingency” plans that are lower than last year’s outlays.

In August, Commissioner Martin instructed departments to plot out reductions of 3.5 percent “that will not affect the over appropriations,” wrote Department of Finance spokeswoman Lola Potter in an email to TNReport last week. Agency heads have also been tasked with listing “base reductions that would offset a proposed cost increase request.”

During much of Haslam’s time as governor, the state’s economy performed below expectations, and therefore brought in less tax revenue than anticipated. This year, however, state government is collecting more taxpayer dollars than anticipated when the current fiscal year spending plan was finalized last spring.

Tennessee’s State Funding Board recently estimated that sales and other tax over-collections could total nearly $350 million by fiscal year’s end next summer. Members of the state’s funding board include Haslam, martin, Comptroller Justin Wilson, Secretary of State Tre Hargett and Treasurer David Lillard.

The Haslam administration budget hearings will commence Monday morning and continue each day of the week until completion on Friday afternoon. The proceedings can either be viewed live online or later as archived files.

Below it the schedule:

Monday, November 30, 2015

9:45-10:45 a.m. Human Services
10:45-11:15 a.m. Tourist Development
2:45-3:15 p.m. Financial Institutions
3:15-3:45 p.m. Commerce and Insurance
3:45-4:45 p.m. Economic & Community Development

Tuesday, December 1, 2015

8:45-9:45 a.m. Health Care Finance & TennCare
9:45-10:30 a.m. Intellectual & Developmental Disabilities
1:30-2:30 p.m. Children’s Services
2:30-3:30 p.m. Safety & Homeland Security
3:30-4:00 p.m. Revenue

Wednesday, December 2, 2015

9:45-10:45 a.m. Education
10:45 a.m.-12:00 p.m. Higher Education
2:00-2:30 p.m. Education Lottery
2:30-3:00 p.m. Military
3:00-3:30 p.m. Labor and Workforce Development
3:30-4:00 p.m. Agriculture

Thursday, December 3, 2015

9:30-10:30 a.m. Correction
10:30-11:00 a.m. Environment & Conservation
11:00-11:30 a.m. TBI
1:30-2:30 p.m. Mental Health & Substance Abuse
2:30-3:15 p.m. Health

Friday, December 4, 2015

9:00-10:00 a.m. Transportation
10:00-10:30 a.m. Finance and Administration
1:15-2:00 p.m. General Services
2:00-2:45 p.m. Human Resources
2:45-3:15 p.m. Veterans Services

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Harwell: Gas-Tax Increase ‘Difficult’ In 2016

Tennessee House Speaker Beth Harwell says there’s appreciable support among lawmakers for putting more money toward the state’s road budget next year.

“People are interested in our infrastructure — in how much money we are spending, maintaining it, even producing more roads, because they are a huge part of economic development. So I think legislators will be taking a look at that,” said Harwell, a Nashville Republican first elected to the Legislature in 1988.

But it’ll be “difficult” for the General Assembly in 2016 to muster the votes to elevate the per-gallon tax rate motorist pay for gasoline in Tennessee, the speaker told TNReport in Cookeville Thursday evening following a town hall meeting of her Task Force on Rural Economic Development.

Gov. Bill Haslam has been trying to build pressure on legislators the past few months raise the state’s current 21.4 cent per gallon gasoline tax, although he’s yet to say just how much more he thinks motorists ought to be paying at the pump. The diesel tax is 18.4 cents a gallon, and like the tax on gasoline, hasn’t changed since the late 1980s.

Harwell reiterated her view that before any tax increase gets a seriously look by GOP lawmakers, money that was removed from the transportation budget a decade ago ought to be rerouted back toward roads.

In the Senate, Transportation Committee Chairman Jim Tracy favors that as well. The Shelbyville Republican is sponsoring legislation to put $260 million from the general fund into the transportation spending outlay for the next fiscal year.

Typically, the taxes paid on gas and diesel purchases in Tennessee are designated to fund transportation projects. But under previous governors, Republican Don Sundquist and Democrat Phil Bredesen, funding was taken from fuel tax reserves and put toward the general fund.

Harwell noted that the state is currently taking in more sales-tax and other revenues than what the General Assembly and the governor’s administration budgeted for during the last legislative session, which ended in April.

Year-to-date collections for the first three months of the the current fiscal year have been $223.3 million more than the budgeted estimate, according to the latest revenue tallies compiled by the Tennessee Department of Finance and Administration. The general fund now has $207.8 million more in it than state government is legally authorized to spend.

“Our revenues are increasing in the state and we have some extra money there,” Harwell said. She suggested the state “restore that money that we took from the Department of Transportation during a rough time in a previous administration — restoring that so they at least have equal footing there in that funding.”

Gov. Haslam has said he’s willing to entertain the idea of rerouting general-fund dollars toward roadbuilding and maintenance. But he also says there’s vastly more transportation infrastructure need than surplus tax-collections can pay for.

NewsTracker Tax and Budget

Surplus Remains a Roadblock to Gas Tax Increase

Gov. Bill Haslam went on the road again this week trying to pave the way for lawmakers to take up the politically combustible topic of increasing taxes on gasoline and diesel.

The governor popped in Monday on brief events across Tennessee aimed at raising awareness about sinking transportation-allocated revenues. Among his destinations were Alcoa, Kingsport, Chattanooga and Memphis before heading back to Middle Tennessee in the evening.

“We are talking about something that affects every citizen,” the governor said during his first East Tennessee pitstop. “It is how we get our kids to school, how we get to work and back. It is how goods that our farmers grow and our manufacturers build, how they get those products to their markets all across the state. So, this really is an issue that affects everybody in the state.”

“We have been the beneficiaries of some responsible people who came before us, and I would like for us to show that same sort of responsibility.”

Automobile drivers who fill up with gasoline in Tennessee pay about 40 cents a gallon in tax — 21.4 to the state and 18.4 to Washington.

Diesel users pay about 43 cents per gallon in taxes in Tennessee — 18.4 cents in state tax and roughly 6.1 cents a quart to the federal government.

The state’s current fuel tax rates have been in place since 1989.

The governor, his transportation department staff and the state comptroller’s office contend that gas and diesel tax revenues at current rates are insufficient to take care of existing roadway infrastructure.

“Cars and trucks are more fuel-efficient, construction and labor costs have risen, and Congress has not passed a long-term transportation funding bill in 10 years,” a Haslam press release Monday said.

However, the administration has yet to float even a ballpark per-gallon tax-increase figure for lawmakers to pitch to their constituents.

“We’re not there yet,” said B.J. Doughty, communications director for the state Department of Transportation. “We are just taking about needs.”

TDOT officials say they’re “backlogged” to the tune of more than $6 billion on unfunded projects. At each of the governor’s events he and Transportation Commissioner John Schroer spotlighted local road-expansion proposals on the to-do list.

The projects Haslam and Schroer set out Monday to call attention to were:

  • Alcoa Highway in Blount County – $271.7 million
  • State Route 126 in Kingsport – $98.7 million
  • I-24/I-75 Interchange in Hamilton County – $65 million
  • Lamar Avenue in Memphis – $229.1 million
  • I-40 in Lebanon – $61.6 million

“We do feel like it is important for the legislators to see these lists of projects and keeping the conversation going,” Doughty told TNReport Monday evening. “It is really a matter of, ‘Do you want these projects, and if so, how soon do you want them?’”

Making the situation more critical are projections that “Tennessee’s population is expected to grow by 2 million by 2040, which puts a greater demand on the state’s infrastructure,” according to the Haslam administration.

Nevertheless, when the Tennessee Legislature convenes in January, Haslam will likely knock up against the same political embankment that’s been a barrier to him the last several months.

A lot of Republican lawmakers in both GOP-run chambers of the General Assembly are in no way primed to try convincing registered voters in their districts that taxpayers ought to be paying more at the pump — especially given that Tennessee is on track this year to again overcollect existing taxes state government is budgeted to spend.

“I am not comfortable going to my constituents and explaining why we are going to raise taxes on anything when we have a surplus in the general fund,” Mark Pody, a Republican state representative from Lebanon, said Monday. “I would not feel comfortable with that at all.”

Pody was one of a handful of regional government officials and business leaders from around Wilson County who turned up at a Lebanon outlet mall off I-40 to hear the governor deliver his last spiel of the day. Due to inclement weather in the area, though, Haslam’s plane from Memphis was delayed and the event was cancelled at the last minute.

All the same, Pody said he’s not been unmoved by the case Gov. Haslam and state transportation officials have been making. He agrees additional funding is needed to maintain and improve Tennessee thoroughfares.

“We have to find a way to get TDOT more money,” he said. “I am very, very comfortable doing that. But we need to decide what the best way to do that is.”

Like many of the lawmakers already on record opposed to a gas-tax increase, Pody supports topping off the road-budget next year with at least $260 million in general-fund dollars. That’s roughly the amount transportation advocates in the Legislature say was inappropriately tapped a decade ago from the state’s gas-tax revenue tank and used to fuel other government programs.

Jim Tracy Bill HaslamJim Tracy, a Shelbyville Republican who chairs the Senate Transportation Committee, is leading the charge both to raise awareness about TDOT funding shortfalls and replace the “raided” $260 million.

Like Haslam, Tracy has traveled the state recently himself talking about transportation issues. He was also among those on hand in Lebanon waiting for Haslam in the rain. And Tracy opposes raising the gas tax in 2016 as well.

Pody intends to push legislation next year that would permanently allocate sales-tax money collected from consumer purchases of auto and truck tires in Tennessee toward TDOT. He said the bill will be sponsored in the Senate by Mt. Juliet Republican Mae Beavers, another foe of hiking the gas tax.

He acknowledged that dedicating taxes on tire-sales to roadbuilding won’t pay for all TDOT’s list of projects.

“It is not going to be tens of millions of dollars — it is not enough to do everything that we need done,” Pody said. Still, ideas like that are much more palatable to penny-conscious politicians and voters at this stage, he said. “Rather than raising the gas tax, I would rather do something like that.”

Haslam hinted Tuesday that he may be getting the message that support is lacking in the Legislature for a gas tax hike in 2016. “I don’t know that we have to address it this year, but we have to address it while I’m governor,” he said. “I’ll just put it that way. Or the state will really be behind the eight ball.”

Tax and Budget

State Employee Union Finds Prison Audit ‘Encouraging, Yet Deficient’

Press release from the Tennessee State Employees Association, Oct. 7, 2015:

TSEA: ACA audit encouraging, yet deficient

NASHVILLE –The Tennessee State Employees Association considers the findings of the American Correctional Association’s audit of the Tennessee state prison system encouraging, yet deficient.

The ACA audit recommends changing the 28-day FLSA exempt class work period from 28-days to 14-days, changing the 8-hour shift assignment to a 12-hour shift assignment, and redefining disciplinary offenses. These changes, according to the report summary, are anticipated to positively affect facility stability and safety, address staffing concerns relative to pay, overtime and scheduling issues, and clarify the department’s assault policies.

TSEA, in a July 30 meeting with TDOC, first asked the department to consider other work cycle options, including a move to a 14-day plan. On August 19, TSEA publically called for TDOC to repeal the 28-day cycle and either return to a 40-hour work week, or find some other equitable system to address issues with overtime pay and turnover. To date, the department has not indicated a plan to adopt this change. We are encouraged to see this recommendation in the audit.

TSEA is also pleased to see the recommendation to redefine the department’s assault policies. Employees are concerned about their safety. Frequently classifying bad inmate behavior as provocation lowers morale and jeopardizes the safety of employees, which increases turnover. We hope the department also considers this recommendation.

“TSEA was never confident that the ACA could conduct a fully transparent audit of TDOC,” TSEA President Bryan Merritt said. “We generally agree with the two recommendations contained in today’s ACA report; however, in light of the volume of well-documented issues facing TDOC, we are disappointed about the considerably low number of recommendations contained in the report.”

TSEA’s first priority is and always has been the safety of Tennessee’s state employees. TSEA is concerned that staffing issues, particularly the department’s overall 39% turnover rate, are not mentioned in the ACA audit. We are concerned that the audit team didn’t review any staffing rosters from the days and weeks prior to their arrival.

In addition, we continue to be concerned about low officer pay and troubling staff to inmate ratios. We think all of these issues should have appeared in the audit.

“This audit is a start. But, if we really want to get to the bottom of TDOC’s problems, we need a comprehensive, truly independent, fully transparent audit of our state prison system,” Merritt said. “Regardless, it is time for the song and dance to end. With each passing day that we do not act to correct the issues in TDOC, we get closer to tragedy. We urge the department to seriously consider ACA’s recommendations.”

Founded in 1974, TSEA represents the rights and interests of all state employees in Tennessee and has a rich history of improving the lives of its state employee members. For more information, visit TSEA’s website at

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Haslam, TN Lawmakers Optimistic VW Will Overcome Emissions Scandal

Volkswagen still has vocal supporters in Gov. Bill Haslam and Chattanooga-area lawmakers who joined him outside the carmaker’s Hamilton County plant this week to publicly display faith in the controversy-beset company.

Haslam paid a visit to workers at the southeast Tennessee factory on Wednesday to express his support for their hard work and focus in what are troubling times for the corporation as a whole.

“Everybody knows about Volkswagen’s struggles,” the governor told reporters gathered across the road from VW’s plant following his visit to the facility. “What is getting lost in that story it that there are some men and women right here in Tennessee, in Chattanooga, who are producing a great product, who have nothing at all to do with the problems that have been created. They are doing everything that they can to get past that.”

Haslam said he found it “impressive” that the plant is still “putting out a great product” in the midst of a roiling controversy that began recently when the U.S. Environmental Protection Agency announced it had discovered about half a million VW automobiles were using emission control systems that were rigged to fool government pollution regulators.

U.S. Volkswagen CEO Michael Horn told a Congressional hearing Thursday that 11 million of the German automaker’s cars worldwide are fitted with emissions-test “defeat” software that can sense the difference between road-driving and lab-operating conditions.

But Gov. Haslam told reporters Wednesday that, “for better or worse,” Tennessee taxpayers are “married” to Volkswagen at this point.

According to the Chattanooga Times Free Press, the state of Tennessee divvied out an estimated $358.2 million of the original $577.4 million in incentives that Volkswagen wrangled seven years ago as a condition of building its billion-dollar facility in Hamilton County. The other $219.2 million was supplied from local governments. State and county taxpayers this year financed another $260 million in incentives to win the job of producing a new sports utility vehicle line for VW.

“We have a concern about taxpayer’s dollars that have been invested in this facility, really twice: in the original plant, and the second one when they agreed to build the SUV here,” Haslam said Wednesday. “Obviously, there is a lot of concern that taxpayer’s dollars are being protected. I think the mechanism is in place to do that.”

The governor said he supports enforcing so-called “clawback” provisions that allow the state to revoke and retract taxpayer funding from companies found not to be living up to promises they made in exchange for subsides and incentives.

Still, Haslam said he’s confident VW will ultimately put the current scandal in the rearview mirror and earn its way back as world leader in automotive sales.

Volkswagen is a “solid investment” for taxpayers, Haslam said.

Haslam rejected criticism that the VW scandal — as well as past failures by incentive-receiving companies to deliver on the promise of job-creation, like happened in Clarksville with Hemlock Semiconductor — shows why spending taxpayer dollars on corporate giveaways is a bad idea.

“I disagree with the conclusion,” Haslam said.

The governor said nobody in his administration — nor the administration of Democrat Phil Bredesen, the prior Tennessee governor who offered VW hundreds of millions in publicly financed support to locate in Chattanooga — anticipated such impropriety.

“I don’t think anybody could foresee this happening,” said Haslam. “I would love to know the person who could have told you this was coming around the corner.”

The Republican governor, who prior to winning election to Tennessee’s highest office in 2010 served eight years as mayor of Knoxville, said he still believes the state’s deal with VW was prudent. If the future proves otherwise, “we have the provisions in place to bring the money back,” said Haslam.

“We have to do our homework up front to make certain that we have the provisions in place to protect our taxpayers,” he said. “That’s No. 1. And No. 2 is that we are making wise investments.”

Among the lawmakers who participated in the press event with Gov. Haslam were Senate Speaker Pro Tem Bo Watson of Hixson and House Majority Leader Gerald McCormick of Chattanooga, both Republicans.

Watson and McCormick have each been critical of Volkswagen management for flirting with the prospect of inviting the Detroit-based United Auto Workers union into the Hamilton County factory to represent Tennessee workers.

But on Wednesday, both backed Haslam in supporting the company in its time of trouble.

“I think you are going to see a sort of rise-from-the-ashes kind of story that comes out of this plant,” said Watson, vice chairman of the powerful Ways and Means Committee.

McCormick seconded that sentiment.

“This is going to be a bump in the road for them. There have been other car companies that have had problems much greater than what is happening with Volkswagen, and they have bounced back fine — and Volkswagen will too,” he said.

Other area lawmakers who attended the event were Sen. Todd Gardenhire of Chattanooga and Reps. JoAnne Favors of Chattanooga, Kevin Brooks of Cleveland and Mike Carter of Ooltewah. Favors is a Democrat, the others are Republicans.

A state legislative subcommittee is scheduled to meet Oct. 29 at the Hamilton County Department of Education to inquire into “the financial impact on the state from the Volkswagen misconduct.”

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Haslam Concludes Initial Campaign to Highlight Highway-Funding Shortfall

Gov. Bill Haslam has wrapped up his tour around Tennessee to drum up support for potentially raising the state’s 21.4 cent per gallon tax on gasoline.

Haslam participated in conferences with local political and business leaders for the past six weeks in 15 towns and cities across the Volunteer State. Joining him to highlight road infrastructure deficiencies, highway and bridge maintenance needs and funding deficits for such projects were Transportation Commissioner John Schroer and other TDOT staff.

Despite his concerted effort to stress shortages of state and federal transportation dollars, the Republican Tennessee governor told reporters following the final meeting in Lenoir City on Sept. 10 that he’s not yet sure if he’ll be proposing a tax hike in the coming legislative session, which gets underway in January.

Part of the purpose of the tour around the state, in addition to getting a better sense of the transportation priorities on the minds of local elected leaders, has been to prime the pump for the possibility of a tax-hike proposal.

“The good thing about conversations is that people get a better grasp of what the situation is,” said Haslam last week.

Senate Transportation Committee Chairman Jim Tracy is planning to begin a tour of his own around the state staring Thursday to further explore road infrastructure needs, as well as the general public’s tolerance level for paying government more at the gas pump.

Haslam said he’s fully supportive of Tracy riding the road-funding circuit himself this fall.

However, Tracy is skeptical the GOP-run General Assembly is prepared to take up a fuel tax increase next year.

The Republican from Shelbyville has also said a priority of his own in 2016 is to siphon more than $260 million from the general fund back into the state’s road construction-and-maintenance accounts.

Tracy argues that money was “raided” from the roads budget back when Democrats controlled the Legislature in the 2000s.

Jim Tracy Bill Haslam“We have a covenant with our citizens that the gas tax charged by the state at the pump is dedicated to transportation-related purposes and not something totally unrelated,” Tracy said in a press release announcing that he and Rep. Eddie Smith, R-Knoxville, are sponsoring a bill in 2016 to refill the money into road funding. “It is such an important principle in some states that it is provided for in their Constitutions. This money should have never been diverted for other state government purposes and should have been paid back at the first available opportunity. It’s past time we pay it back.”

Haslam affirms he’s open to discussing that issue in the context of larger state general fund budget deliberations with the Legislature. But the amount Tracy and Smith are talking about doesn’t come close to addressing the $6 billion or so backlog in transportation construction and maintenance that the state is facing, said the governor.

“That’s a possibility,” Haslam said of the Tracy-Smith bill to route more than a quarter of a billion back to roads. “But the point I would make is that doesn’t solve our problem. That would take care of one road. Alcoa Highway in Knoxville that they’ve been working on since before I was the mayor of Knoxville — so, for at least the last 15 years people have been saying it is coming — well, it still hasn’t happened. And just that project alone has a $270 million price tag on it. Same thing in Memphis. There is one road in Memphis, Lamar Avenue, that we need to fix. Same thing, $270 million price tag.”

Throughout the statewide tour, Haslam and TDOT staff have been emphasizing a 2015 Tennessee Comptroller’s report that concluded current-level gas-tax revenues are insufficient to maintain existing roads and bridges in the state.

“Cars and trucks are more fuel-efficient, construction and labor costs have risen, and Congress has not passed a long-term transportation funding bill in 10 years,” a press release from the governor’s office this week declared. “Tennessee’s population is expected to grow by 2 million by 2040, which puts a greater demand on the state’s infrastructure.”

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Tracy Maps Out Tour Across TN to Discuss Roads, Possible Gas Tax Hike

Senate Transportation Committee Chairman Jim Tracy is planning an info-gathering, public-opinion-gauging trek of his own to follow-up Gov. Bill Haslam’s roadshow to talk up Tennessee’s transportation needs.

The Shelbyville Republican announced this week he’ll be visiting eight cities across Tennessee over the next several weeks, beginning in Nashville on Sept. 17.

Among the topics that’ll come up is upping the portion of pennies state government will siphon off per gallon of gas motorists purchase.

Tracy’s plan is to facilitate community forums on the conditions, needs and funding picture involving the state’s transportation system.

A press release from his office said the meetings will include presentations from the state comptroller’s office and road-infrastructure planning experts.

Although the prospect of raising gas and diesel taxes in the state is in the discussion mix, Tracy — along with other powerful GOP state lawmakers like Senate Majority Leader Mark Norris and House Speaker Beth Harwell — has indicated he doesn’t expect the General Assembly to pass a hike in the 2016 legislative session.

“We’re a long ways from getting there, because we’ve got a lot of studying to do to figure out how much we’re going to need to fulfill the roads and the bridges across the state,” Tracy told TNReport.

“I want to see what our needs are to the next 10 to 15 years,” he said. “We don’t need a band-aid approach. We’re not running this like Congress is. Congress is patching it three months at a time. Tennessee is one of the best run states in the country — we want to keep it that way and to do that we have to plan for the future.”

TN Fuel Efficiency Chart Haslam administrationGov. Haslam has been meeting over the summer with business leaders, politicians, roadbuilders and freight haulers to impress upon them that there’s a long-range road-building and repair funding deficit looming in Tennessee.

The state has a transportation project backlog in excess of $6 billion, according to Haslam.

The governor told TNReport last month he’s acutely aware that the topic of raising gas taxes — or any tax — is typically an unpopular one in Tennessee. But Haslam hopes people connect good roads with improved long-term prospects for a good economy.

“I think the more you talk about this, the more people understand the need,” said the governor. “In general, when we talk about changing the way we pay for anything, nobody likes that idea. But when you explain, ‘Hey, you are actually paying 30-50 percent less to drive on our roads than you did 20 years ago.’ And those roads cost twice as much to maintain and build. People understand that — that you just can’t keep going that direction and have it work forever.”

Haslam hasn’t yet committed to proposing a gas tax hike when the Legislature convenes in January. But vehicles are getting better and better fuel efficiency, and the administration argues that the current 21.4 cents per gallon levy isn’t covering new construction and maintenance costs — a perspective backed by the state’s comptroller.

“In the last several years, revenues dedicated to transportation have stagnated in Tennessee and across the country,” according to a report issued earlier this year by the state’s Office of Research and Education Accountability.  “Tennessee’s fuel taxes are not expected to be sufficient to maintain existing infrastructure and meet long-term transportation demands.”

The governor has said he’s uninterested in either the state taking on debt to pay for highways in Tennessee, or introducing toll roads as a new revenue stream.

Tennessee’s chapter of Americans for Prosperity, a nation group associated with the billionaire Koch brothers that advocates lower taxes and shrinking government, is leading the charge to defeat any effort to make motorists pay more at Volunteer State fuel pumps.

AFPTN, which successfully lobbied last winter to derail the Haslam administration’s plan to expand Medicaid in Tennessee, is pressing federal and state lawmakers to fight against any gas tax increase proposals in Nashville or Washington.

Haslam’s tour of the state to discuss “transportation and infrastructure needs” winds up next week, with stops in Chattanooga and Cleveland on Wednesday, and Knoxville and Lenoir City on Thursday.

Dates and venues for Sen. Tracy’s transportation forums are listed below:

Thursday, September 17th at 2:00 p.m. CDT
Legislative Plaza, Senate Hearing Room
301 6th Avenue NorthNashville, TN 37243

Tuesday, September 22nd at 10:00 a.m. CDT
Cherry Theater at Columbia State Community College
1665 Hampshire Pike
Columbia, TN 38401

Tuesday, September 29th at 10:00 a.m. CDT
Shelby County Board of Commissioner’s Chambers
160 North Main Street
Memphis, TN

Tuesday, September 29th at 6:00 p.m. CDT
The Carroll Bank and Trust Community Room
19510 West Main St.
Huntingdon, TN 38344

Thursday, October 1st at 10:00 a.m. CDT
Northwest Tennessee Development District Office
124 Weldon Drive
Martin, TN 38237

Thursday, October 1st at 2:00 p.m. CDT
Southwest Tennessee Development District Office
102 E. College Street
Jackson, TN 38301

Thursday, October 15th at 10:00 a.m. EDT
Bridgewater Place
205 Bridgewater Road
Knoxville, TN 37923

Wednesday, October 28th at 2:00 p.m. EDT
Hamilton County Commission Room
624 Georgia Avenue #401
Chattanooga, TN 37402

Thursday, October 29th at 10:00 a.m. EDT
Kingsport Center for Higher Education
300 West Market Street
Kingsport, TN 37660

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Haslam on L’affaire Logo: Consistent State Gov’t Branding Image Needed

After addressing the matter Wednesday for the first time publicly since broke the story last month, Tennessee Gov. Bill Haslam took a couple more questions from reporters Thursday on the controversial decision to pay an outside firm $46,000 to design a new state logo.

The governor said there really ought to be just one logo for state government agency use, and that’s by no means the case now.

“As a state, we have a 172 different logos, alright. One hundred and seventy-two,” said Haslam. He added that “over the last 20 years those have all been redesigned once or twice, but nobody pays attention to that because they are all spread out.”

The governor said it is common knowledge in professional marketing circles that uniformity in branding is important.

“We need to have a consistent source of identification for the state,” Haslam said after a grant-announcement ceremony on the campus of Chattanooga State Community College.

“We want people to look and if they see a truck driving down the road, or a building, and immediately know, that that’s the state of Tennessee,” he said.

Haslam was asked why the logo design assignment wasn’t given to a state employee rather than hiring an outside firm.

“We could have,” the governor replied. “Anybody can look at it and say ‘Well, I don’t like that logo.’ And you do that with new product logos all the time, right? One of the big questions that came up was why didn’t you just use the tristar that everybody likes so much. The issue is that’s not something we can trademark. If we have our own logo for identification, it needs to be something we can trademark.”

The controversy over the logo hit a nerve in the state. Both Republicans and Democrats in the General Assembly have criticized the Haslam administration over on the issue — suggesting that the $46,000 pricetag didn’t seem a wise was to spend taxpayer resources.

“My granddaughter Marley Mac is working on her own version of a new logo for #TN,” tweeted House Minority Leader Craig Fitzhugh, D-Ripley. “Only cost me a piece of gum.”

“We waste way too much time on the branding of ideas, not the ideas,” opined Senate Minority Leader Lee Harris, D-Memphis.

Conservative West Tennessee Republican Andy Holt issued a press release in the days after the story broke slamming the administration for not broaching the matter with lawmakers beforehand.

“Almost $50,000 worth of taxpayer dollars were, in my opinion, wasted, and not a single tax-payer had a voice in the matter,” declared the Dresden state representative. “The bigger issue is how it was wasted. This was done behind closed doors. When questioned, journalists were initially met with resistance. Is this how we govern? If so, this reeks of Washington D.C. — Out of touch, and overpriced.”

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Legislature Sends Budget to Governor

The Tennessee General Assembly has approved a $33.8 billion budget, which includes a state appropriation of $13,778,481,400.

By comparison, the state appropriation for last year’s $32.4 billion budget was $14.9 billion, Finance Committee Chairman Charles Sargent told TNReport following the vote.

“Last year (the breakdown) was 45 percent state, 40 percent federal and about 14 percent other services,” the Franklin Republican said.

Thursday afternoon, the state Legislature completed its main task for the 2015 session in moving a budget forward to fund the state for another year.

Now, just a few more days of floor sessions and committee meetings remain next week to allow the state’s legislative body to wrap-up loose ends and hear final bills.

The House took up the appropriations measure first, and despite amendments offered and objections proffered by several members from both sides of the aisle, the lower chamber passed a budget with no riders and no changes from the measure established by the Finance Committees Wednesday evening.

One area of contention was a one-time, $120 million appropriation to fund a new state museum, which is currently housed in the basement of the Tennessee Performing Arts Center, across the street from Legislative Plaza. The state will also raise $40 million in private donations for the project.

Since its announcement by Gov. Bill Haslam’s administration in March, Republican Reps. David Alexander of Winchester and Rick Womick of Rockvale both voiced opposition to spending so much on a project that’s akin to a monument when some of the state’s employees and services were facing funding shortfalls.

Alexander, a vice-chair of the House Finance Committee, offered an amendment to take $60 million of the museum project funds and instead send half to the state’s reserve fund, and the other half to the state Department of Transportation. However, that amendment was rejected.

House members also voted to reject several amendments offered by Minority Leader Craig Fitzhugh.

One of Fitzhugh’s amendments would have urged Haslam to continue his negotiations with the federal Center for Medicaid and Medicare Services to get a written agreement for a medicaid expansion waiver.

But Sargent argued that an appropriations measure was not the appropriate place for the House to consider Fitzhugh’s amendment.

Additionally, several objections were raised by the Volunteer State’s minority party to a Finance Committee amendment blocking local school boards from using funds granted to them by the state’s Basic Education Program funding formula to sue the state government.

That amendment was added by committee Republicans Wednesday night in response to a recent decision by several of the state’s school boards to sue the state government claiming that the BEP is being inadequately funded.

House Bill 1374 passed the lower chamber 80-12. Womick was the only member of the GOP to join 11 Democrats in voting against the measure.

Sargent congratulated the representatives for passing “one of the finer budgets we’ve had in a long time.”

Fitzhugh told TNReport after session that he took the budget “very seriously,” and while there were “good things in it,” there were “two major factors” that led him to vote against the bill. It doesn’t contain any allowance for the governor to pursue Medicaid expansion and the state’s tax-relief program for disabled veterans and senior citizens will “come up short this year,” he said.

“The way that the budget was put together was a little strange this year, but those were the main two reasons that I just couldn’t pull the trigger on the budget,” Fitzhugh said.

Senate Majority Leader Mark Norris lauded the GOP-run House for sending Republicans in the upper chamber an “intact budget.”

According to Norris, the 2015-16 budget was “basically flat” in growth, representing about a 2 percent increase over last year, and includes $74.5 million for the state’s rainy day fund.

The Collierville Republican added that over the past four years the General Assembly has done a lot to reduce the size of government and “increase its efficiency.”

“Washington, D.C. — that’s not Tennessee,” he said.

The Senate passed the appropriations measure in short order, 32-1, without spending much time on debate. Senate Minority Leader Lee Harris, a freshman from Memphis, supplied the only vote in opposition.

“This may be the first year in a number of years I had any red lights against it, but it was smooth here and generally supported very strongly,” Norris told TNReport after the Senate adjourned for the week.

Lt. Gov. Ron Ramsey, speaking with reporters after the end of session, praised the budget’s passage, especially the inclusion of funds for the State Museum.

“I do think that we’ve been long overdue on building a state museum. It’s a shame that we have our museum in the basement of a building,” the Blountville Republican said. He added that since they “had a little one-time money, that was the thing to do there, too. So I think it’s a great budget.”

Alex Harris can be contacted at