NewsTracker Tax and Budget

Haslam Won’t Oppose Sidewalk Honoring Former First Lady Conte

Gov. Bill Haslam says he has “no problem” naming a sidewalk at the bottom of Capitol Hill after his predecessor’s wife despite red-lighting the move as costly last month.

“It’ll happen. It’ll happen,” Haslam laughed when asked by reporters about the proposal Tuesday. “We’ll get that paid for, with state money.”

The Republican governor’s staff raised objections to the cost of naming the perimeter track of Bicentennial Capitol Mall — down the hill from the Capitol Building — after former first lady Andrea Conte, wife of Phil Bredesen. Former Democratic Speaker Jimmy Naifeh had brought forward the proposal.

“We cannot support this legislation at this time,” read the letter the governor’s office sent to Naifeh, a Covington Democrat, about HB3727.

“We recognize that your legislation may ultimately be amended to remove its fiscal impact. If this is the case, we will gladly revisit our position on the bill,” read the letter signed by Leslie Hafner, the governor’s director of legislation.

The two signs will cost taxpayers a total of $6,000 to label the walk as “Andrea Conte Pedestrian Pathway.” Conte worked as a vocal advocate for healthy lifestyles along with speaking out for victims of violence.

Naifeh said he would find a private donor to pay to install the signs if the governor refused to allocate state funds, but Haslam said that won’t be necessary.

“Let me just say, that was one of those cases where we put a fiscal flag on anything that costs money,” Haslam told reporters after speaking to the Nashville Area Chamber of Commerce. “Anything that cost us, we just said, ‘Hold it, that wasn’t in the initial budget so that will take some consideration.’ And that’s one of those.”

“Obviously, we have no problem honoring Andrea for the things she’s done, and it’s not a significant amount of money,” he said.

Business and Economy Featured News Tax and Budget Transparency and Elections

House Democrats Conflicted on ECD Transparency Bill

Gov. Bill Haslam wants to strengthen the Economic and Community Development department’s ability to scrutinize government grant applicants. But he’s lately run into opposition from critics who said the process isn’t transparent enough.

On the other hand, two ranking House Democrats are uncertain any kind of departure from the status quo is needed.

“I’m having trouble figuring out what they’re trying to accomplish,” Craig Fitzhugh, the House minority leader, said of the administration’s legislative push.

“We’ve been very successful in what we’re doing, and I want us to continue to be even more successful, so it bears another look over,” added Fitzhugh, a lawyer and banker from Ripley. “This is a very, very competitive market for existing and new businesses, so I want to make sure we don’t have some unintended consequences of what they’re trying to do.”

Former Speaker Jimmy Naifeh, of Covington, says he needs to consult with former Gov. Phil Bredesen and his Democratic administration’s ECD commissioner, Matt Kisber, before making up his mind where he stands on the bill.

“I just want to see what they think about it and why this is needed,” Naifeh told TNReport Tuesday.

The Haslam-backed measure, SB2207, was cruising through Statehouse committees with little resistance until earlier this month when on the Senate floor Roy Herron, a Democrat from Dresden, raised questions about the administration’s plan for ECD to start collecting identifying information about the owners of companies. Herron said he was troubled by the proposed legislation’s assurances that such information wouldn’t be made public.

The Senate’s most powerful lawmaker, GOP Lt. Gov. Ron Ramsey, later himself came out in favor of making companies that receive business incentives reveal who their owners are. Since business owners stand to perhaps personally benefit at the taxpayers’ expense, they should be identified to the taxpayers, Senate Republicans and Democrats skeptical of the governor’s “due diligence” plan asserted.

State ECD officials on Monday tried to sell House Democrats on the latest version of the plan, which doesn’t include business ownership information on the list of company information the state can ask from those applying for FastTrack grants, tax incentives and tax credits.

The state doesn’t collect ownership information now, nor did it under Bredesen’s tenure.

House Democratic Caucus Chairman Mike Turner said most Democrats are concerned with the transparency component of the Haslam-backed measure. But Turner said a handful like Fitzhugh and Naifeh are more concerned with whether the business incentive system needs changing.

“It almost makes you wonder what kind of clients they’re going after, what they’ve got in mind to do this kind of thing,” Turner said of the Haslam administration.

Fitzhugh’s position in fact seems to have shifted somewhat from earlier statements he made on the issue. The House Democratic leader told reporters earlier this month he was leaning towards requiring that company ownership information be publicly divulged after a business is awarded a state grant, but that any sensitive proprietary information ECD collects should be kept confidential.

The full House plans to vote on the bill Thursday, Mar. 1. The Senate sent its version of the bill back to the Commerce, Labor and Agriculture Committee for more work this week.

Education Featured

Haslam Defends Teacher Evaluation System

Gov. Bill Haslam again Monday defended the use of the state’s new teacher evaluation system and reminded everyone that the whole idea didn’t start with his administration.

Haslam made the point during a press availability on Capitol Hill after a ceremony for veterans. He told the Rotary Club of Nashville later Monday that change is “painful,” and he said after the speech he was making a particular reference to the evaluations with that remark.

Haslam also said Monday he will not state a position on school vouchers until later this year, although he told the Rotary audience the voucher issue is “probably going to be one of the most contentious” when the Legislature reconvenes in January.

The issue of teacher evaluations has been on the front burner in the Legislature with lengthy hearings on the process last week. The system has prompted many complaints among teachers and principals. The Haslam administration has basically stayed the course on the system, which is in its first year, even though Commissioner of Education Kevin Huffman gained approval to tweak the system with some changes meant to make evaluations less time-consuming.

Tennessee’s success in the Obama administration’s “Race to the Top” competition included a plan to evaluate teachers every year. Tenured teachers will be evaluated with four observations, and those without tenure will be evaluated six times. Haslam pointed out that the process goes back to the application for the federal funds won by the administration of his predecessor, Phil Bredesen.

“Remember how we got here. This was part of the Race to the Top application,” Haslam said. “Everybody agreed evaluations were really at the heart of that. The evaluation process was a work in progress for a year before this.

“It spanned administrations.”

He said it’s still early.

“This is November. We started it in September. It’s not like we have a really long track record,” Haslam said. “It takes a little bit of adjusting to get used to the evaluation. The first evaluation, because it is the one with lesson plans, does have the most paperwork involved in it. When we get past that, the evaluations after that will look a little different.”

Legislators are hearing from their constituents about the impact the evaluation system is having on schools.

“I understand. Before, if you got evaluated twice every 10 years and now you’re looking at this new process, that’s not something necessarily, ‘Oh boy, I’m really excited about that,'” Haslam said.

“But I do think, again, back to what’s at the heart of the change we need, why we won Race to the Top, was this idea of making certain we’re doing everything we can to encourage great teachers to be in the classroom. And the evaluation piece is a key part of that.”

Disgruntlement over the evaluation system has been so pronounced some observers have suggested that the state should hold off on actually acknowledging the findings in this first year, but Haslam remains steadfast. At the same time he dismissed any notion that changes in the basic concept might jeopardize the $500 million the state won in the Race to the Top competition in 2010.

“I don’t want to cast the political argument, ‘If you all change it we’re going to lose our funds.’ I don’t think that’s a fair argument for us to be making,” Haslam said. “I think it’s more about putting in jeopardy the pace that we need to change.”

The Haslam administration has stayed in the background thus far on the school voucher issue. The Legislature is considering a proposal that would allow children in the state’s largest counties — Davidson, Shelby, Knox and Hamilton — to apply for funds to attend a public school elsewhere in the district, a public charter school or a private school.

The issue has pitted those who favor school choice against those who are protective of the public school system.

Haslam was asked Monday why he has not taken a stand on vouchers yet.

“It’s incumbent upon us to do our homework to see: Do we know enough to make that call?” he said.

Haslam pointed to the need to study the experiences of other states who have tried vouchers in order to make the right decision. A voucher bill passed the Senate in the last legislative session and is expected to be considered in the House next year. The House version, HB388, is sponsored by Rep. Bill Dunn, R-Knoxville.

Education Featured Health Care Tax and Budget Transparency and Elections

Bredesen: Politics Behind Report on Farr, Tax Variances

Former Gov. Phil Bredesen said Tuesday he believes the people who disagreed with former Revenue Commissioner Reagan Farr “got their final shot in” against Farr with a recent comptroller’s report that criticized the department on tax variances.

Bredesen said he has not read the report from Comptroller Justin Wilson but has talked briefly about it with Farr and that he has never had any questions about Farr’s integrity.

Bredesen made the comments after an appearance at the University of the South in Sewanee with former Vermont Gov. Jim Douglas, in which Bredesen said his style in dealing with the Legislature sometimes was to “go right around them.” He noted that former Gov. Don Sundquist did not use the “bully pulpit” of the office for the power of persuasion with the people when Sundquist proposed an income tax.

And Bredesen, a former mayor of Nashville, got his own shot in about term limits at the Metro Council in the capital city, calling the limits of two four-year terms a “disaster.”

Bredesen said his contact with Farr about the comptroller’s report lasted only about 30 seconds.

“He told me about it. I said, ‘That’s fine. You know the crew over there that was trying to do you in got their final shot in. There’s now a report. Fine,'” Bredesen said.

Bredesen said he never had any particular problems with what Farr did.

“He had a department which was very politically divided internally about the way it should operate,” Bredesen said. “This department has always had a group of people who thought, ‘Our job is tax collection, period. What we need to do is audit returns and collect taxes, and that’s the end of it.’

“But you’ve also got people that say, ‘No, no, no, tax policy and the way you do things is part of the process of the department. It’s part of economic development.’ Reagan was in that mode. I think the people that disagreed with him kind of got the final shot in there. I’ve never had any questions about his integrity or decision-making process.”

The report, dated Oct. 17 and addressed to leaders in the Legislature, noted a frequency in recent years where tax variance award letters involved references to economic development. Farr served as Revenue commissioner from 2007-2010. The report also said key department employees were sometimes left out of the decision-making process.

Gov. Bill Haslam said this week he has read the report and wants to concentrate on setting clearly defined procedures in the department.

Bredesen, a Democrat, and Douglas, a Republican, participated in a discussion formally called “American Politics: The View from the Center.” Both are seen as moderates in a time of polarized partisan politics. But that did not prevent Bredesen from being vocal in his views on matters of how to govern.

Bredesen said the direct power of the governor to do something is “demonstrably less” than the CEO of “a good-sized company,” saying the governor is limited in terms of what the Legislature will do and who can be hired and fired.

“What is unparalleled is you have the bully pulpit,” he said. “If you decide as governor to talk about K-12 education for six months of the year, that’s what will get talked about in the state. The chambers of commerce will talk about it. The newspapers will write about it. TV will do stories. You can make that happen. So I’ve always seen the power of the governor as the power to persuade.

“And the way to get things done in the Legislature is to go right around them.”

He noted his former legislative liaison, Anna Windrow, was in the audience and “probably crying” at the comment. His reference to going around the Legislature was to make his point about taking an issue directly to the people.

Bredesen told the audience he went into the governor’s office after Sundquist had attempted to get an income tax approved. Sundquist, a Republican, failed and was largely ostracized by his own party.

“You sort of watch it and say, you know, instead of making a case to the people of the state as to why something needed to change in the tax structure, he didn’t do any of that. He just tried to do it by twisting arms in the Legislature,” Bredesen said.

“What happens is you get your arm twisted, and then you go back home and find out people have got pitchforks about the subject you’re talking about.”

Bredesen won in 2002 on a platform that did not include a proposal for an income tax. He said the state didn’t need one, to the chagrin of some in his party. Bredesen won a second term handily and never proposed an income tax in his eight years in the office.

Bredesen said he had no problems with term limits in the executive branch of government because of the power of incumbency, but he said the term limits enacted by referendum for Nashville’s Metro Council have been disastrous.

“I just think it’s been awful for the city,” he said after the event, pointing to a couple of veteran lawmakers with institutional knowledge as examples of those whose experience can benefit the council.

“I’m not quite sure what problem you’re solving with term limits, and what I think it did is first of all you dramatically enhance the power of the mayor. There’s nobody left on the council with the kind of, you know, the history. There’s no Charlie Fentress on the council. There’s no Willis McAllister on the council.

“You get a bunch of people who are in there and really feel they have to move and shake and make things happen in their early sort of terms. I don’t think it’s worked well for the city.”

Bredesen and Douglas met with students at the university earlier in the day, and Bredesen said the young people asked about how the governors made difficult decisions.

“They wanted to know, ‘How is it done? Tell me about some challenge you had’ — in my case TennCare or something — really a nice set of questions for somebody who is a senior ready to go out in life, not saying, ‘Let me debate,'” Bredesen said.

He said it was different from encounters with people who want to express a view about a specific issue.

“These were young people who weren’t so much concerned about that as they were just, ‘OK, I want to be effective in the years ahead. I’ve got a couple of former governors in front of me. How did you do this?'”

They also wanted to talk about jobs, he said.

“If you’re a senior in college in this economy today, you’re scared,” Bredesen said. “You’re scared about what the workplace holds right now. This is the time in which they want to get out, they want to get a job, they want to build a life, and it’s a pretty scary world out there right now.”

NewsTracker Tax and Budget Transparency and Elections

In Wake of Comptroller’s Report on Farr, Haslam says Consistency Needed in Tax-Variance Decisions

Gov. Bill Haslam said Monday the best reaction to a comptroller’s report widely seen as critical of former Department of Revenue Commissioner Reagan Farr is to establish clearly defined procedures for tax variances granted by the commissioner.

“I just got a copy and read it over the weekend,” Haslam said of the report (pdf).

“For us, I think the important thing is to say: What are we going to do going forward? I think the clear message to us was: We want to have well-documented, clearly organized procedures for how you handle any variances.”

Haslam said he and current Revenue Commissioner Richard Roberts have talked about the issue and that Roberts agrees with him on the proper approach.

Haslam said he does not know if he will advocate any legislation to address procedures for tax variances, however. He said all of his department chiefs are reporting to him with any proposals for legislation they may have for next year and that he will address the Department of Revenue later this week.

A key element of the issue, however, has been the private nature of Revenue decisions, which affect individual taxpayers.

Comptroller Justin Wilson’s report, dated Oct. 17, is accompanied by a letter to Lt. Gov. Ron Ramsey, Speaker of the House Beth Harwell, Sen. Randy McNally of Oak Ridge and Rep. Charles Sargent of Franklin, saying the report is in response to their request. All four of the legislators are Republicans. McNally and Sargent are chairmen of their chambers’ respective finance committees.

Wilson is a Republican. Farr served in the administration of former Gov. Phil Bredesen, a Democrat.

The comptroller’s report looked at tax variances from 2000-2011 and involved a review of 59 variances — 40 requested by the taxpayer, 19 by the commissioner. The report said approvals of taxpayer-requested variances increased during the tenure of Loren Chumley, who served in 2002-2007, and Farr, who served in 2007-2010. It noted a frequency in recent years where variance award letters involved references to economic development.

“Specifically, taxpayers would use job creation and economic impact as part of their argument for why they should be awarded a variance,” the report said, adding that requests used tax treatment as a “negotiation tool.”

The report said key department employees were sometimes excluded from the decision-making process. The report recommends that the Legislature consider legislation requiring additional approvals to variances, that the department should proceed with a new tracking system for variances and that the department develop a process for reviewing awarded variances.

Haslam acknowledged Monday the difficulty of dealing with privacy issues of agreements with taxpayers balanced with transparency in government.

“That is one of the difficulties, because obviously it deals with private taxpayers’ information,” Haslam said. “But I think the important thing for us to do is make certain, again, that there is a process that is clear and predictable and we’re letting people know everything we can — absent private taxpayers’ information.

“We really are trying to do that.”

Business and Economy Featured Liberty and Justice

Tourism to TN Up Following ‘Guns-in-Bars’ Law

Tennessee would turn into the Wild West. Drunken shootouts would be the norm. And tourists would shun the state, opting for safer, calmer locales.

Those were the predictions of opponents of a law to allow any of the state’s 317,000 gun owners with handgun carry permits to take their weapons into bars and restaurants that serve alcohol so long as they abstain from drinking. But two years after the law’s initial passage, administration officials say the courts have not convicted anyone of wielding a gun while intoxicated at a bar, nor has tourism in the Volunteer State plummeted.

In 2010, the year after the law first passed, the state’s tourism numbers were up 6.3 percent, according to state officials. Every county saw a boost in tourism, according to a report by the Department of Tourism Development and the U.S. Travel Association.

“It doesn’t surprise me that tourism didn’t drop,” said Lt. Gov. Ron Ramsey, R-Blountville. “There wasn’t one documented case still to this day of someone going into a bar, a gun permit holder, and using their firearm. There’s still not.”

The issue drew renewed attention this week, after the sponsor of the so-called guns-in-bars law, Rep. Curry Todd, R-Collierville, was arrested in Nashville on charges of drunk driving and carrying a loaded handgun while intoxicated. Critics of the law say the arrest shoots holes in the law, but Ramsey rejected those suggestions.

The idea that the incident should trigger a repeal of the law is the logical equivalent of arguing that people should no longer be allowed to drive because of the chance of drunk driving, he said.

Critics of the law contend the bump-in-tourism statistics don’t reflect the groups that took their conventions elsewhere out of fear they’d encounter hordes of heavily armed hillbillies whooping it up in the local honky-tonks.

“As wonderful as Tennessee is, it sends an image out to the world that we’re a bunch of red-thumbed rednecks with a bunch of guns,” said Adam Dread, a Nashville attorney who led the court challenge against the law in 2009,

While Dread says his sense is to “feel sorry” for Rep. Todd, he thinks the Shelby County Republican’s arrest “exposed the hypocrisy of the whole bill” and does indeed buttresses the case for repeal of the law.

“Every law-abiding gun owner should be ticked about it,” said Dread.

In fact, abiding by the law appears to be just what the vast majority of Tennessee’s licensed gun-carriers are doing when they’re packing heat in establishments that serve alcohol. According to the state Department of Safety and Homeland Security, not one person with a handgun permit has been convicted of brandishing their weapon while drinking in a bar.

“We have not been notified by any courts across the state for any violations of that law,” said department spokeswoman Jennifer Donnals. “To our knowledge, there have been no convictions of that law.”

In 2009, Todd led lawmakers in passing the “guns-in-bars” bill, overriding a veto by then-Gov. Phil Bredesen, who said the legislation was “reckless and lacking basic safeguards to ensure public safety.” A Nashville judge later weighed in, striking down the law and saying its language was unconstitutionally vague in its definition of restaurants and bars.

In 2010, Todd got his bill passed a second time but with more specific language, including a provision allowing individual patrons to bring guns with them into any establishment that serves alcohol unless the bar or restaurant bans guns. Again, the Legislature approved the measure despite Bredesen’s protests.

In an emailed statement Wednesday, Todd said he was “deeply sorry” for the events surrounding his arrest, adding he would talk with House Speaker Beth Harwell next week about whether he should step down from his post as chairman of the State and Local Government Committee.

House Republican Leader Gerald McCormick told reporters he wouldn’t rush to judgment on Todd’s arrest, but said everyone makes mistakes.

“I think it’s a bad idea to drink and carry a gun, obviously. Now I don’t know the details of what happened with Rep. Todd (Tuesday) night, but I think he would agree with me, and I know he would agree with me, that people who are drinking should not have loaded handguns with them,” said McCormick, of Chattanooga.

Asked whether the allegations against Todd call into question whether other handgun carry permit holders should continue to be trusted to follow the law, McCormick said, “Until we find out all the details, I’d be hesitant to answer that.”

Democratic Party Chairman Chip Forrester demanded Todd resign from the Legislature and said any inaction by Harwell will reveal whether “she believes Republican leaders deserve special treatment or she believes these actions demand consequences.”

House Democratic Caucus Chairman Mike Turner was more supportive of his peer across the aisle, saying he hopes Todd keeps his committee chairmanship.

Todd was arrested in Nashville at 10:55 p.m. Tuesday down the street from Vanderbilt University. According to a police affidavit, Todd reeked of alcohol, his eyes were “red, watery and bloodshot,” and his speech was slurred. Police said he was “extremely unsteady on his feet” during the field sobriety tests, and Todd attempted to lean on his vehicle to steady himself. He refused a breath alcohol test, although he admitted to having two drinks.

Police later learned Todd had a loaded Smith & Wesson 38 Special in a holster tucked between the driver’s seat and the center console. He was released from jail Wednesday on a $3,000 bond.

Todd, who is retired from a career in law enforcement, could lose his handgun carry permit for three years if convicted of possessing the handgun while under the influence, a Class A misdemeanor which is punishable with less than one year of jail time and a fine of no more than $2,500.

Business and Economy Featured News Tax and Budget

New Amazon Deal Praised As Improvement On Deal, Not Backtracking

When all was said and done in the announcement Thursday that Amazon will collect sales taxes in Tennessee beginning in 2014, the state was in a different place from its original agreement with the online sales giant.

The original plan had been that Tennessee would get hundreds of jobs from two distribution centers in the Chattanooga area, so in return the state would let Amazon avoid collecting sales taxes on purchases. The deal was subject to debate almost from the time it became known.

Now, with a commitment that will bring the total number of Amazon jobs to 3,500 in the state, Amazon will have to collect sales taxes, although it is not soon enough for some critics of the deal.

So by negotiating a new deal with the company, taxes included, does that mean that in the big picture Tennessee went back on its word?

“No, absolutely not,” said Speaker of the House Beth Harwell, pointing to the efforts of Gov. Bill Haslam and Commissioner of Revenue Richard Roberts. “I’m proud the governor and the commissioner were able to sit down with Amazon and work out an arrangement that is pleasing not only to Amazon but also to the taxpayers of this state.

“I think it is a fair way to bring a large number of jobs to the state of Tennessee.”

Lt. Gov. Ron Ramsey, R-Blountville, called the announcement Thursday a “big win for unified Republican government on the jobs front.”

“The governor has negotiated a deal that promotes economic growth and jobs creation while protecting the interests of brick-and-mortar businesses who are the backbone of our economy,” Ramsey said in a formal statement.

“This is a good solution for the state of Tennessee, and I commend the governor for resolving this.”

Deputy Gov. Claude Ramsey said the deal simply means an improvement on what the state had before.

“It didn’t go back on its word. It just worked out a better deal,” Claude Ramsey said.

The deputy governor was asked if the new deal would in any way be detrimental to future negotiations with other companies.

“No, sir,” he said. “Because I think it shows that there is a solution. We worked to a solution.”

The original deal was struck by a Democratic governor, Phil Bredesen, who told Haslam of his plans and the reasons behind them: Get the jobs and collect no taxes, or lose the jobs and collect no taxes. Haslam, a Republican and newly elected when Bredesen told him of the deal, told Bredesen he would honor the agreement.

But ultimately, the Haslam administration engaged Amazon in an entirely new discussion. The result was an arrangement where Amazon not only would be collecting the sales tax but would be adding jobs to the point its total commitment had grown to 3,500 jobs and $350 million.

The entire scenario involved a Democratic administration sacrificing a substantial amount of revenue and a Republican administration doing everything it could to collect owed taxes — shifts from the stereotypical depictions of Democrats as tax-and-spenders and Republicans as advocates of revenue reduction.

Republicans did so in the name of tax fairness, yet other retailers were not satisfied that Amazon still gets until 2014 to start collecting and remitting.

In the Legislature, it was a Republican duo, Sen. Randy McNally of Oak Ridge and Rep. Charles Sargent of Franklin, who had contemplated legislation to force the tax collections.

Sen. Bo Watson, R-Hixson, speaker pro tem, said the new deal does not go against the original deal.

“I don’t think you can say it’s anything against the original agreement,” Watson said. “I think this is a continuation of dialogue that’s been going on between the administration and Amazon since the original agreement was discussed.

“All along, as this whole debate has been occurring, many of us, me being one, have been saying that conversations have been continuing, and this is just a continuation of that conversation.”

Democrats held a press conference Thursday, calling for $15 million toward a jobs plan. When they were asked about the Amazon deal, House Democratic Leader Craig Fitzhugh did what Haslam did and emphasized the part of the deal that was about jobs, not taxes.

“I think the primary focus is on the jobs, the jobs that the Bredesen administration brought here through Amazon, and through an agreement that has to do with the revenue, that there’s going to be another 2,000 jobs on top of that,” Fitzhugh said.

“So I think that’s the key thing we have to focus on in these times, which as everybody has said, is jobs.”

Mike Turner, the House Democratic Caucus chairman, said, “The law is already on the books. You’re supposed to be paying that tax as it is now.

“There’s no new taxes being added to the books because of what we’re doing.”

Andrea Zelinski contributed to this report.


Kisber Doesn’t Recall if Amazon Deal was in Writing

Former Tennessee Economic and Community Development Commissioner Matt Kisber said Saturday night he does not remember if the controversial tax arrangement with the state was ever put in writing.

The question of whether the Amazon deal was actually put on paper or was the result of a handshake deal has been one of many questions surrounding the agreement, which was made during former Gov. Phil Bredesen’s administration, in which Kisber served.

The Tennessee Department of Revenue commissioner at the time, Charles Trost, has previously refused to comment on specifics of the Amazon arrangement, as has Bredesen.

Amazon struck a deal with Tennessee in the waning weeks of Bredesen’s second term, where the Internet sales giant would build two distribution plants in the state and not have to collect sales taxes on its transactions — as opposed to the collection of the sales tax by the many bricks-and-mortar retailers in the state.

Some lawmakers, including chairs of both the House and Senate finance committees, have criticized the deal with Amazon, saying it gives Amazon an unfair competitive advantage.

Amazon has committed to building two distribution centers in southeast Tennessee, one each in Bradley and Hamilton counties, where the company agreed to provide more than 1,000 jobs. The Bredesen team made the deal under the presumption that if it did not offer the incentive on tax collections, Amazon might take its distribution centers — and the jobs that go with them — to another state, like Georgia. Amazon, it was recently reported, has offered 1,500 people jobs at the Bradley and Hamilton centers.

Amazon recently announced a third Tennessee distribution center, in Lebanon in Wilson County.

The issue of transparency on letter rulings — written statements on tax issues for specific taxpayers — from the Department of Revenue has risen during the Amazon debate. When lawmakers considered the Amazon deal during the legislative session this year, one of their questions was whether Amazon’s agreement was ever formally put on paper.

When asked Saturday night at the Tennessee Democratic Party’s Jackson Day Dinner in Nashville if the Amazon agreement was in writing, Kisber gave a long pause.

“I don’t actually remember,” he said, then taking another pause. “I really don’t. I don’t know if we got an MOU (memorandum of understanding). That’s so far back now, in terms of what I’ve been dealing with, I don’t … I don’t honestly remember. I would have to defer to the current administration.

“I remember the discussions. I remember everything we discussed, but I don’t remember if it got … if there was a written agreement or not.”

Kisber and former Revenue Commissioner Reagan Farr have launched Silicon Ranch Corporation, a solar power development business, since leaving office. Bredesen is chairman of the operation.

Richard Roberts, current revenue commissioner under Gov. Bill Haslam, has refused to comment on Amazon’s deal, citing policies that prevent him from discussing agreements with private taxpayers.

Kisber said the project was in the works for many months and that there were multiple discussions involved in the deal. He recalled people on the site selection team, both on the consultant side and the company side, in the dealings with Amazon.

Haslam has announced his administration is talking to Amazon about a long-term arrangement in which Amazon would, in fact, collect the sales taxes, a development that has extended the debate over the issue and led to renewed discussion about the Bredesen deal. Haslam has said there would be openness on the long-term arrangement if and when one is completed.

Haslam had been elected, but not sworn in, when Bredesen informed him of his plans with Amazon. Haslam said he would agree to honor Bredesen’s commitment.

Kisber said the issue, as it was explained to him, involved third-party handling of the products being sold.

“I was told we were not talking about Amazon books and CDs. We were talking about companies for whom Amazon provides fulfillment services through their Internet platform,” Kisber said. “There are hundreds of companies that you buy from if you use Amazon that is not being sold by Amazon but is being fulfilled (by Amazon).

“And Tennessee has other companies that provide that type of service as well. This was consistent in my thinking with the services of those types of companies.”

Kisber complimented Haslam’s handling of the issue.

“Whenever an economic development project becomes political theater, it impacts the state’s reputation for business,” Kisber said. “And I commend Governor Haslam for working to resolve the issue and tone down the rhetoric so Tennessee can focus on its wonderful business climate and using that to attract projects to the state.”

Kisber attributed his inability to recall specific details on the Amazon deal to the passage of time since he worked for the State of Tennessee.

“I will be honest with you. I loved state government, and January 15 I left it. I have been focused on my business endeavors. Doing a start-up business is challenging enough,” Kisber said. “So I have been available if the current administration has any questions. But I have left that phase of my career.”

Kisber said he remembers Bredesen, Trost and Comptroller (Justin) Wilson being involved in the Amazon matter.

“As was the case on all projects, I was the lead for the state,” Kisber said.

He said there was unanimous concurrence on the rationale for the deal.

“I think most everyone involved was in complete agreement,” Kisber said. “We could get the jobs and not have the collections, or you could not get the jobs and not have the collections. The issue was one that was going to be resolved, in Governor Bredesen’s opinion and mine, that it was going to take a national solution.”

The concept of a national solution involves Congress acting in a way that would make the sales tax policies uniform among the states.

Kisber had been involved in the streamlined sales tax project that would bring all states in line under one agreement, going back to his days as a state legislator.

“I have been intimately involved and familiar with this issue from the very beginning,” he said. “And while we were advocating at that time, as a legislator, a common state solution, we all said the best solution would be a national solution, and I still believe the best solution is a national solution.”

There has been broad skepticism, however, that Congress would involve itself in the issue. A common belief is that forcing online retailers to collect sales taxes would make Congress appear to be advocating a new tax, even though such an act would only guarantee the collection of existing taxes. Others have argued that the issue would become so compelling for states collecting revenue that Congress would be forced to take action on their behalf.

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Haslam Promotes TN to Businesses in NY

A well-traveled Gov. Bill Haslam said he and his economic development team met with companies that already have a presence in Tennessee as well as some the state is trying to attract on his New York trip this week.

“It was good,” Haslam said Wednesday of the trip after speaking to a Nashville Downtown Partnership luncheon. “Whenever we do this we put together a lunch of site selection consultants who play a big role, and so we did that in New York as well. We had 10 different site selection consultants from different firms. We did the same thing in Chicago and San Francisco and Los Angeles.”

Businesses he met with who are already in Tennessee included Loews Hotels, Viacom and Bank of New York.

Haslam has been quite the frequent flier of late, including a short-notice trip to the White House to introduce President Barack Obama for an education announcement last Friday. The governor’s trip to New York included his participation in NBC’s Education Nation summit.

The recent high-profile events (the job recruitment was low-profile) have brought Haslam a sudden burst of national exposure. Haslam said in talking to reporters Wednesday that some of the timing was coincidence, but he noted substance behind the attention.

“I think it’s a recognition of the role Tennessee is playing — some of that started before I came — and the fact that we are trying to keep that momentum going as well,” he said.

Part of the attention simply has to do with the state of education, Haslam said.

“I do think it is kind of the topic of the hour, if you will, not just for Tennessee but for the country. People are looking around and saying we went from being No. 1 in the world (in education) to 14 in 20 years. I think all of us are realizing we’re going to have to have a different approach.”

He addressed several topics, including his thoughts on lottery revenue proposals.

The Tennessee Lottery is beginning to draw focus from the Legislature due to deficits that are running into millions of dollars. Lt. Gov. Ron Ramsey has appointed members of a Senate Lottery Stabilization Task Force, which is expected to make recommendations later this year. The purpose of the task force is to ensure the long-term viability of the lottery’s Hope scholarships.

“I think we should take a very measured approach,” Haslam said. “It is an issue. We are spending more than we’re bringing in, and we can’t keep doing that and kicking the can down the road.

“It’s not fair for us just to keep using more than we bring in and let somebody 10 years from now worry about it.”

One suggestion for bolstering the program has been to allow people to use debit cards to make their lottery purchases. The law requires that all lottery tickets be bought in person at a retailer, and tickets much be purchased with cash.

“I don’t know enough of the arguments, pro and con, on using debit cards,” Haslam said. “We’re looking at all the ways you can shrink that gap right now. By the time the Legislature comes around, we’ll have a voice in all that.

“What I asked my staff to do is let’s compare where we are to other states. The lottery board’s argument has always been the structure we have now allows us to sell more.”

Haslam called for a “market study” to find those comparisons.

Lawmakers are considering changes in the way students qualify for the scholarships as a way to keep the program on sound footing. Sen. Jim Kyle, D-Memphis, wrote a letter to fellow lawmakers this week, criticizing such attempts.

“The Lottery for Education account has more money in reserves than it pays out each year in scholarships, and yet we talk about its looming insolvency,” Kyle said in his letter. “I don’t know a single person with more money in their savings account than they spend in a year who considers themselves broke.”

On other topics, Haslam said he was not involved in the decision Wednesday that granted parole to former death row inmate Gaile Owens, who had been convicted for planning to have her husband killed. Former Gov. Phil Bredesen had commuted her sentence to life last year. Haslam said he had no comment to offer on Wednesday’s decision.

He was asked if there were a possibility that if Sen. Lamar Alexander, who said recently he plans to run for his seat again, were to quit during his term if Haslam would appoint himself to the Senate.

“I have no intention at all to do that,” Haslam said. “I have zero anticipation of doing that.”

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Retailers’ Group: $3 Billion At Stake in Online Sales Tax Issue

A brick-and-mortar retailers’ group has warned that the state could lose out on $3 billion in revenue and more than 10,000 jobs over the next five years if online retailers continue not to collect sales taxes.

The projections are in an study commissioned by the Alliance for Main Street Fairness, a national organization made up of retailers ranging from small businesses to Wal-Mart.

“From the Alliance point of view, this really tells us the Amazon deal is a bad deal for Tennessee. It’s going to cost us more jobs than it’s going to gain,” said Mike Cohen, the organization spokesman, said during a press conference at Cumberland Transit bike shop in Nashville.

The Alliance opposes a deal the Bredesen administration struck with online retailer, which promised to build distribution centers in Hamilton and Bradley counties under an agreement the company would not have to collect sales taxes.

Gov. Bill Haslam has said the state should honor the deal, but that he wants Amazon to collect sales taxes on its transactions in Tennessee in the future, and his administration is currently negotiating with Amazon to find a long-term solution. As of last week, Haslam said he had nothing new to report.

The Legislature is generally split about what the state should do. Sen. Jim Kyle, the top ranking Senate Democrat, is too.

“It will take the local business community to drive that Amazon issue,” Kyle said during a stop outside the University of Memphis during the Democratic Jobs Tour Monday. “There are two sides to it. One is keeping your word and the other is, doing what’s the right thing to do. The unfortunate thing here is when you’re keeping your word, you’re not doing the right thing.”

The Alliance’s study leaned heavily on a report out of the University of Tennessee, which found the state would miss out on collecting as much as $456.1 million in local and state sales taxes next year on online purchases. Taxpayers last year paid more than $8 billion in state and local sales taxes, according to documents from the Department of Revenue.

Younger Associates, which performed the analysis for the Alliance, asserts there is a direct relationship between state and local government spending and the number of jobs supported. If retailers like are not forced to collect sales taxes, about 6,900 jobs would be lost next year, leading to a loss in wages and decreases in consumer spending to purchase other taxed items such as gas, cars, alcohol, tobacco and amusement.

The study says that would translate to additional lost sales tax collections — in total, $480.7 million in 2012, followed by a loss of $3.02 billion in taxes and 10,567 jobs in five years.