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Business and Economy Tax and Budget

Haslam Worries Lack of Confidence Will Hamper Growth

Gov. Bill Haslam threw the latest sobering splash of cold water on economic expectations Friday, predicting the state’s economic growth in the next two years will be no better than 3 percent as it struggles to get past the recession.

Haslam, who emphasized he is no professional economist, made the estimate at a business breakfast at Lipscomb University’s Allen Arena.

“I’d love to say something different, and I hope I’m wrong,” Haslam said.

Lipscomb President Randy Lowry set the tone early in the program, saying he and Haslam “were talking at the table just a moment ago, that neither of us as a CEO of our respective organizations may ever serve in a good economy.”

“Think about that,” Lowry said. “We may finish our terms and still be working in the context where the economy is very, very challenging.”

Haslam is in the first year of his first four-year term. If he should serve another term, he would leave office in January of 2019.

Haslam said nothing that would dispel Lowry’s worrisome summation, but he did make a persistent pitch about his plans to create job growth as governor.

“I don’t think we’ll see a double-dip recession,” Haslam said. “But I think we’re going to bump along on basically flat growth for the next few months.

“Everything I see says there’s not a whole lot of confidence out there.”

Haslam pointed to two particular factors that have had a negative effect — the new federal health care plan and the recent battle in Washington over the federal debt ceiling.

“I make a point of asking businesses, ‘How’s it going?'” Haslam said. “Up through June, it was pretty good, and our sales tax numbers up through June were good, too. And right about the first of July, it’s like somebody threw the brakes on. I heard that from retailers, distributors, manufacturers, all across the board.”

The governor pointed to the same problem he has brought up for weeks.

“I personally think it’s the fact there is a lack of confidence,” Haslam said. “People invest into confidence, and we don’t have that right now.”

The state’s most recent revenue figures, for July, showed growth of 1.7 percent over July a year ago. Finance Commissioner Mark Emkes has said the state should save a $28 million surplus in the general fund as a reserve against a possible downturn in the economy. July was the 12th consecutive month where total collections exceeded estimates.

Emkes is also concerned about maintaining the state’s position on its credit rating, which will be learned when top state officials visit bond rating agencies in New York in September. He has asked state departments to present budgets that account for potential cuts in federal funding.

The state recently announced its unemployment rate for July was 9.8 percent, the same as from June, while the national employment rate dipped from 9.2 percent to 9.1 percent in the same period.

Five counties — Houston, Obion, Overton, Smith and Weakley — showed increased unemployment in those latest figures. The lowest unemployment rate was in Lincoln County, at 6.2 percent, followed by Williamson County at 6.7 percent.

“These are very challenging economic times,” Haslam told the business crowd Friday. “But as a state we start from a real position of strength.”

The governor spoke optimistically about attracting jobs, citing advantages like a low tax rate and no income tax in the state, but even at that, he warned against larger economic dangers.

“As Washington looks at wrestling through their issues, I don’t know how that’s going to play out. But I do know this. I’m pretty confident that one way or another, the state of Tennessee will be getting fewer dollars going forward,” he said.

Haslam said he didn’t know federal cuts to be a fact, but “if I’m betting lunch, that’s what I would bet.”

The governor referred to the upcoming trip to the rating agencies and expressed satisfaction that the state had produced a responsible budget, which was approved unanimously in May.

“I think that shows that our General Assembly understands we’re going to have to make hard choices going forward,” Haslam said. “The point I will make to the rating agencies is that kind of mature, adult vision of how we deal with issues, I think, is exactly what will sustain Tennessee going forward.”

Haslam said the federal government has been spending too much money on a lot of things, and he pointed to how costly entitlement programs had become. He said he had read recently that 70 percent of Americans get more benefit from the federal government than they pay into it, surmising that that means a large percentage of people would have to vote against their self-interest to rein in spending.

“To fix that is going to involve some really, really hard decisions that I hope we have the stomach to make,” he said.

Haslam said he and others were in Chicago earlier this week for dinner with a group of business executives who are looking to expand. He said they said Tennessee was a great place to do business but that they were concerned about education in the state. But he also noted that instead of competing with states like Alabama or Ohio for those businesses that Tennessee is competing with nations like China or Brazil, which he said was a good sign.

Haslam was asked if, like many governors who have things named for them after their service, usually in the area of their expertise, what he would like to have named after him. He replied that he would be OK with nothing named for him but attempted to answer the question.

“Twenty years from now, I probably should be judged on ‘Did we really move the needle on education in Tennessee?'” he said. “It will take a long time to do that.”

Categories
Press Releases

More Disaster Declaration Requests for Obama from Haslam

Press Release from Bill Haslam, Governor of the State of Tennessee, 7 May 2011:

Requests Assistance for Benton, Carroll, Crockett, Dyer, Gibson, Henderson, Henry, Houston, Lake, Lauderdale, Madison, Montgomery, Obion, Shelby and Stewart counties

NASHVILLE – Tennessee Gov. Bill Haslam has asked President Obama to declare 15 counties as federal disaster areas due to a series of severe storms, straight-line winds, flash flooding and the record flooding of the Mississippi River, beginning on April 19, 2011.

Should this request for assistance be granted, Benton, Carroll, Crockett, Dyer, Gibson, Henderson, Henry, Houston, Lake, Lauderdale, Madison, Montgomery, Obion, Shelby and Stewart counties would have access to varying levels of federal assistance programs.

Haslam may request other counties as damage assessments are completed.

“We have many fine first responders, local leaders and state agencies who have been engaged for many days making sure we can protect and save lives, and protect property, during many severe weather and flooding emergencies,” Haslam said. “Federal assistance would help people restore their lives and help local governments rebuild their infrastructure.”

On April 26, Haslam declared a state of emergency as a precautionary move because of the severe weather and forecast of Mississippi River flooding. Haslam was briefed April 29 by the U.S. Army Corps of Engineers on the storms and their effect on water levels along the Mississippi River system, and he toured the levees in Northwest Tennessee with emergency management officials and local mayors May 3.

In the request, Haslam seeks Individual Assistance for Dyer, Lake, Obion, Shelby and Stewart counties, to include the Individuals and Households Program (IHP), Disaster Unemployment Assistance, Crisis Counseling, Disaster Food Stamp Program, American Bar Association Young Lawyers Legal Aid, and Small Businesses Administration disaster loans. The request also seeks assistance through the Hazard Mitigation Grant Program.

Haslam also seeks Public Assistance for all the counties in the request for debris removal, emergency protective measures, and rebuilding and repairing roads, bridges, water control facilities, buildings, utilities and recreational facilities.

The Department of Military, Tennessee Emergency Management Agency, Department of Agriculture, Department of Environment & Conservation, Department of Health (EMS), Department of Human Services, Department of Transportation, Department of Safety, Tennessee Wildlife Resources Agency, Civil Air Patrol, American Red Cross and Tennessee Volunteer Organizations Active in Disasters are responding to the current flooding emergency and providing protective services to help local efforts.

Heavy snow-pack melting and above average rainfall in the Midwest raised the Mississippi River to record flood levels along Tennessee’s western border at the end of April. The rising Mississippi River added to flooding already occurring in many middle and west Tennessee counties due to severe storms and tornadoes in mid-April.

Additional information about state and federal assistance for affected counties will be released as details become available.

Damage assessments continue in East Tennessee following the storms and tornadoes that impacted that part of the state last week. Additional counties are expected to be added to the initial declaration from May 2 as those assessments continue.

For more updates regarding the state’s response, visit the TEMA website at www.tnema.org.