Business and Economy News Tax and Budget Transparency and Elections

Candidates Give Guv Credit for Fiscal Stewardship, But Say Spending Curbs Still Needed

Republican gubernatorial candidates are giving Democratic Gov. Phil Bredesen good marks for his management of the state budget in tough times.

But they are braced for extremely difficult decisions, and they expressed their approach to the next budget Tuesday at the Bluegrass Yacht and Country Club where the Hendersonville Chamber of Commerce held a forum.

Bredesen last week said the recently approved $28 billion budget plan will leave the next governor in a “good, solid position” and keeps the state “on strong financial footing.”

That’s in contrast to many of the statements that have come from the Republican side of the gubernatorial campaign, where candidates have expressed concerns about the end of stimulus money. Nevertheless, they’re ready to cut, they say.

The consensus is that Tennessee is in excellent shape when compared to other states.

Knoxville Mayor Bill Haslam, Lt. Gov. Ron Ramsey and U.S. Rep. Zach Wamp addressed the budget and other issues in the forum, and in what may be becoming the norm some sharp exchanges surfaced as the candidates distinguish their positions from each other. The primary election is Aug. 5, and early voting begins July 16.

Haslam told the audience there will be no tax increases, which is something all the candidates agree on, and that the expected economic growth will only be 1 or 2 percent this year, adding that the only alternative is to cut back on the expense side.

“Everybody says we want you to run government like a business, until you do it,” Haslam said. “We’re talking about shrinking the budget in a lot of places. I can tell you the first cuts are the easiest.”

But Wamp, although asked about immigration, didn’t let Haslam’s budget-cutting comments go unchallenged. Wamp pointed out that Haslam raised taxes before he cut the budget in Knoxville.

“I don’t want to let this go by, after what the mayor just said,” Wamp said. “He is my friend, and he is a nice guy, and I know his daughter (Leigh) is in the room, and I don’t want to be mean, but when he became mayor, before he cut a dime of spending, he raised taxes 15 percent.

“That’s not the tough work. If you brag about debt reduction without saying I raised taxes 15 percent, it’s not complete. It’s not honest, and that’s the fact about that. These are differences that need to come out as we go down the stretch, because frankly we don’t need anymore establishment moderates running our state.”

Haslam came back, saying, “I’m the only one that’s been responsible for preparing, passing and implementing a budget. If revenues don’t meet expenses that’s been my job.”

Haslam said his predecesssor — he didn’t name him, but it was Victor Ashe — had said the person who succeeded him had no choice but to have a tax increase.

“Now, we have the lowest property tax rate in over 50 years,” Haslam said. “Our budget is less than three years ago, and I am glad to stand by that record.”

The budget issue is clearly the biggest obstacle facing the next governor. All three candidates at the forum credited Bredesen for his management.

“Compared to other states, Governor Bredesen is leaving the next governor in pretty sound condition,” Wamp said before the forum. “I’m grateful for the work he has done on economic development, bringing in new investments in our state, and I’m grateful he has responsibly managed the budget over his eight years.

“And I do believe the state, compared to other states, is in a strong position going forward, even though we’ve got budget deficits (ahead). We actually have the ability to manage those budget deficits in our state without new taxes, which is rare in America today.”

Ramsey was squarely in the middle of the recent budget process and was critical of Bredesen when the governor introduced a list of potential new taxes to get the budget process home. But in the end, the Legislature pushed back enough to claim it balanced the budget with no tax increases, and Ramsey said he was proud of that.

“We left a blueprint on how the next governor can get back to a recurring-to-nonrecurring basis. In other words we’re not using one-time money to finance expenses,” Ramsey said. “I think the Senate was very protective. I’ll hand it to our chairman of finance, Randy McNally (R-Oak Ridge,) who was an ardent proponent of making sure that happened.

“Also the House wanted to dig deeper into reserves, to dig deeper in our rainy day fund, and the Senate held firm on that. So the next governor will at least have some cushion if the economy doesn’t turn around. We all hope the economy turns around and this takes care of itself, but we have left a blueprint.”

Ramsey added that the state is still not out of the woods.

“It’s still going to be hard. It’s still going to be tough,” Ramsey said. “But the next governor will at least have a way to get out of this.”

Haslam, no doubt thinking of those people who say they want cuts but then react when the cuts actually occur, is clearly concerned about the loss of stimulus funds from the federal government.

“I’ll give the Legislature and the administration credit for passing a good budget this year, but there is a lot of money in this year’s budget that is not available in next year’s,” Haslam said. “There are some rainy day funds I don’t think we will be able to draw from next year, some stimulus plan money. There will be a big challenge.

“Relative to some of our peer states, are we in good shape? Yeah, I think we are, and I think a lot of people deserve credit for that. I don’t think anybody should kid themselves. We saw how hard it was to figure out the last hundred-million-dollar gap of this year’s budget, and there’s a billion and a half in revenue in this year’s budget that’s not going to be in next year’s.”

Haslam pointed again to the reaction when the reality of budget-cutting comes.

“Some blueprints have been laid out for how we’re going to deal with that, but that pain hasn’t been felt yet,” he said. “Showing a plan for how we’re going to make cuts and then making the cuts and feeling those cuts is a whole different thing.”

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Bredesen Pleased With Legislature’s Budget

Gov. Phil Bredesen said Friday the budget agreed to by the General Assembly this week was “99.99 percent what I want” and that he felt he would be leaving the next governor with a good budget circumstance compared to other states.

The House passed the $28 billion compromise budget 94-0 Friday after the Senate voted 30-3 late Thursday night. The agreement followed an admonishment on Wednesday by the governor to get beyond differences among lawmakers and finish the process.

“It’s not exactly what I wanted. There are some things I took out and some things in there I don’t think ought to be there,” Bredesen said. “But on the whole, this budget is 99.99 percent what I want. I certainly leave some discretion on their part to make little changes they need to get from here to there.”

As Bredesen spoke, he was unaware of exactly where the House was on the budget, saying he was assuming the best over the next 24 or 48 hours. But the House moved Friday afternoon, ending any suspense.

“On the whole they did a good job in the end,” Bredesen said of the negotiating process. “It took a little extra time this year to get to that point. I think we will have a good budget that will leave the new governor in a good, solid position.”

Bredesen was speaking to reporters after a speech to the Tennessee Bar Association at the Renaissance Hotel in Nashville, which followed a forum at the same convention among the current candidates for governor. The gubernatorial candidates have expressed serious warnings about the difficulty facing the state on budget issues. Knoxville Mayor Bill Haslam has repeatedly said the job facing the next governor will be the most difficult ever. He warned of the looming budget pressures again Friday.

But Bredesen expressed satisfaction with the outcome of the process in a challenging year. He said the state is left with “good, strong reserves” of around $600 million, which he described as a “healthy number.”

When asked about his role at a Wednesday breakfast that nudged lawmakers to settle their disagreements, Bredesen said he made the point of how close the two sides were and emphasized what is happening elsewhere in the country.

“I did point out, look, if this were a state where you had a $5 billion shortfall, and if we were deciding on whether to increase the sales tax 2 percent or pass an income tax or something, of course it would be very contentious. We don’t. It’s down to arguing about a fish hatchery and minor elements like that. Let’s get over it. Let’s get on with passing the budget.”

The fish hatchery proposal, which would have cost $16 million, was going to be in the district of House Speaker Kent Williams and had been an obstacle to closing the deal. But in the end, the hatchery was pulled from the budget package.

There had been reports Bredesen was willing to go around the state using his bully pulpit about the process if lawmakers didn’t get down to an agreement.

“I did remind them I did have an airplane at my disposal,” Bredesen said.

But as satisfied as Bredesen might have felt, it was a contrast to the message only a short while before in a forum between the Republican gubernatorial candidates — Lt. Governor Ron Ramsey of Blountville, U.S. Rep. Zach Wamp of Chattanooga and Haslam. All three have spoken to the need to make drastic changes in state government, since no one is proposing tax increases.

Haslam opened with the same warning he has been giving about the state’s future budget picture.

“In difficulty, this budget won’t hold a candle to how difficult next year’s budget will be,” Haslam said. “This year’s budget includes about a billion dollars in non-recurring revenue in terms of federal stimulus plan money that won’t be available next time.

“We’re entering a very difficult time in Tennesse.”

Ramsey has vowed to reduce the number of departments in state government if elected. Wamp has consistently spoken of a need to “shrink the footprint” of state government, and both Wamp and Ramsey have said they will have to reduce the state payrolls. Democrat Mike McWherter, who has all but wrapped up his party’s nomination, was the lone candidate with the moderator in a discussion prior to the Republicans’ three-way forum. McWherter has emphasized the need to create jobs to jumpstart the economy.

Bredesen said revenues will come back slowly.

“We think it will be 2014 before we’re back to 2007 levels,” Bredesen said. “There’s a lot of unmet needs and it’s going to take some work to manage through these next few years.”

Bredesen was asked about Haslam’s observation.

“The next governor is going to have tough issues,” Bredesen said. “There is nothing I can do and set up now to prevent those kinds of things. The stimulus money for example runs out Jan. 1 of the January the next governor is sworn in.

“I hope I’ve left the next governor in as strong a position as possible, passing from one governor to the next. I would agree with him in the sense that I think the next few years are going to be tough years to manage the state of Tennesse.”

Haslam elaborated on his position after the forum.

“It’s an overwhelming reality facing the state,” Haslam said. “It’s such a temptation when you’re running to say we’ll do that, we’ll pay for things, but we don’t have the funds to do so many things. It’s going to get worse before it gets better.”

Haslam said he thinks Tennesseans are not really prepared for how difficult it could be.

“I see it from both sides of the political aisle and across the spectrum of employment,” Haslam said. “People don’t really have a sense of what it’s going to look like when the state has a billion dollars less, because it’s going to impact us all across the state.”

Haslam told the forum audience that his wife Crissy says every time they leave a conversation about the state’s finances, she says he’d better be nice to her, and when he asks why she says, “Two years from now I’m going to be the only friend you have if you’re elected governor.”

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Budget Talks Stall Over Hatchery Project

Negotiations came to a sputtering halt Thursday after lawmakers from both parties walked away from the table unable to hash out an agreement on one spending plan sticking point: whether to fund a $16.1 million fish hatchery during the tight fiscal year.

Calling it “the most political budget” he’s ever seen, House Democratic Caucus Chairman Rep. Mike Turner blames much of the strife on Senate Republicans. GOP lawmakers, said Turner, are seeking “political payback” against House Speaker Kent Williams, a former Republican, and readying their election campaigns for higher elected offices.

“They’ve got nine people running for Congress, 150 of them running for governor. This is all about politics,” said Turner, who is from Old Hickory. “They’re using this fish hatchery because they think they can gain political points about that and there’s more to this than the fish hatchery.”

Proposals from the House and Senate were seemingly just beginning to come together on several fronts until members of leadership met Thursday afternoon. When that meeting was over, Lt. Gov. Ramsey, R-Blountville, and his GOP leadership crew had walked away from the bargaining table.

Ramsey, in the thick of a three-way race for his party’s gubernatorial nomination, said there’s no way he could support funding the “pork barrel” fish hatchery project in Speaker Williams’ Northeast Tennessee district. Opposing that project is an example of “running things the Tennessee way and not the Washington way,” said Ramsey, who has taken to using that phrase in commercials and on the campaign trail.

On one point Ramsey and Turner do share agreement: The impasse at the statehouse is about “more than just a fish hatchery.”

“It’s a symbol of out of control spending,” said Ramsey. He said that is the one issue he and his caucus will not budge on — all other issues are negotiable.

Ramsey said blocking the fish hatchery has nothing to do with political retribution against Williams, a former Republican who was voted Speaker of the House by the Democratic Party last year. In a tough budget year when legislators are considering cuts to mental health, children’s services and other social programs, Ramsey said there’s no way to justify spending any money on a fish hatchery.

The hatchery isn’t the only issue Democrats and Republicans are disagreeing on at this point in the budget process that promises to drag into June. But it’s one that both parties aren’t budging on, Ramsey said.

Other issues being debated include whether to give state employees a cash bonus, help with health care payments or something else of value. Also on the table is a plan to offer flood victims a sales tax holiday on items they purchase to fix up their homes.

“Things like that can be worked through, but when it comes to projects that are pork-barrel projects, we just cannot,” said House Republican Caucus Leader Glen Casada of Franklin. “Let’s cut the pork and make government smaller with no tax increase.”

Lawmakers expect to adjourn for the holiday weekend and pick up on budget talks next week.

Ramsey said he and his caucus will stay “as long as it takes” to pass a budget without Williams’ fish hatchery. House Democrats say they expect to spend at least another two weeks at the Capitol hammering out a budget.

Business and Economy News Transparency and Elections

Economic Recovery Elusive; Fears of Double Dip Recession Loom

A read on gubernatorial candidates in recent days, seeking their interpretations of where the economy is headed, was very much like getting a read from economists.

There is no unanimity of opinion.

Candidates are certainly not experts at economic predictions, but they travel the state constantly and are in about as good a position to gauge the economic landscape across the state as anybody. They talk to a lot of people in a lot of sectors, and they listen as they go.

The next governor and General Assembly will have to grapple with economic woes regardless of which way the pendulum is swinging next January when the new administration takes office, but any person running for governor has to be wondering if the trouble ahead is known or about to get worse than advertised.

Knoxville Mayor Bill Haslam, who routinely tells voters the state will have a $1.5 billion hole to deal with, still believes the longterm view is positive.

“The stock market is not always the most accurate reflection of the economy,” Haslam said. “There are so many other things involved than that. I think we’re in the early stages of the recovery, but I think we have a long way to go, and I think employment is going to lag in this recovery.”

Tennessee, like the nation as a whole, is seeing encouraging pockets of economic news. Earlier this month, the state said revenue collections for April were at a net positive growth of 2.23 percent over the same month a year ago. April revenues were $1.243 billion, $43.4 million more than budgeted. It was the state’s first positive sales tax growth month in nearly two years. The state’s unemployment rate for April was 10.5 percent, an improvement by one-tenth of a percentage point over March.

But one of Haslam’s rivals for the Republican nomination believes Tennessee is still in for a remarkably difficult time.

“I’ve been in all 95 counties, and I cannot see an economic recovery,” said U.S. Rep. Zach Wamp of Chattanooga. “The stock market, I’m concerned, is responding to the global economies of Greece and Europe and weak economies frankly because of large government debt.”

With the lingering problems in the global economy, questions are rising as to whether the previously bleak projections have told the full story. The bad news could get worse. Wamp says the United States needs to change its approach.

“We’re headed in (the wrong) direction, unless we reverse some of our decisions as a nation in terms of spending, consumer confidence and confidence by small business people,” said Wamp. “Investor confidence and other governments’ confidence in our ability to repay our own debt is not going to come back, and that slows the economic recovery. I still think we are months, if not years, away from an economic recovery.”

Lt. Gov. Ron Ramsey, R-Blountville, who has taken pains to remind voters at every turn that federal stimulus funds run out next January, said he wasn’t sure if the nation is in a recovery or not.

“I was hoping for a turnaround. For the first time in months we saw an uptick in revenue,” Ramsey said. “But I think it’s going to be a long, slow recovery, not a quick upturn. I know some on Wall Street are calling it a double dip. Who knows? If I knew, I’d be the richest man in the world.”

But Ramsey who has an auction and real estate business, has noticed some improvements that hit close to home.

“I tell you, it’s feeling better in the real world, as far as the real estate market,” Ramsey said. “In the last few weeks, I’ve seen upticks in my business in particular. It could just be spring fever. The real estate market always picks up in the spring. So who knows?”

Democrat Mike McWherter, who has locked up his party’s nomination, points to what has become a common expression — jobless recovery.

“My sense of the situation is that we are at the bottom of this recession,” McWherter, who owns a beer distributorship in Jackson, said. “But the problem we’ve got now is that the recovery seems to be a jobless one. That’s why I’m focusing on creating jobs here in this state.

“That’s what my program is about, recruiting industry and how we give incentives to existing businesses to add employees. If we do that, if we get people back to work, there’s no question we’ll be in a full recovery.”

Another Republican candidate, Joe Kirkpatrick, who has participated in several gubernatorial forums although he’s vastly underfunded by comparison to his opponents, sees no sign the economy is in a recovery.

“It’s clear that we’re not,” Kirkpatrick said. “The very idea that we were ever in one was smoke and mirrors.

“We’re at 10 percent unemployment. With those who have quit looking for a job, those that are underemployed, you’re looking at between 20 percent and 30 percent out of work.”

Haslam said he sees employers being cautious.

“I’ve talked to a lot of employers who said, ‘My business is slowly getting better, but I don’t feel confident enough to go hire people back yet, or when I do I’m hiring temporaries,'” Haslam said.

The Tennessee Department of Labor and Workforce Development said this month that Tennessee’s workforce, at 3,028,500, is the highest since May 2009 and that the number of unemployed, 318,000, is at its lowest since March 2009.

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Candidates Riding New Waves of Advertising

They’ve been noted for red umbrellas, a black boot and a special book that displays special effects.

No more do political junkies have to sit around watching television all day just to catch a glimpse of a gubernatorial candidate’s latest commercial: All you have to do is surf on over to their website or Facebook page and click away to your heart’s content.

Still, the candidates know — for the time being, at least — the people they need to reach are those sitting at home watching television, who will react to whatever happens to show up on the screen, not what they might go looking for on a computer.

The availability of quality, professional advertising on television has become so important that campaigns are now making news when they launch an ad. They announce advertising the way movies and television companies announce their productions. You won’t see a candidate show up on a television talk show to discuss his new ad that’s opening — not yet, anyway — but it has become a measure of a campaign’s viability if the candidate can afford to hit the airwaves with ads. The ads themselves are being analyzed for their effectiveness and for fact-checking purposes. Sometimes candidates make hay off another candidate’s ads.

But given recent strides in the role new media plays, the major contenders were asked about the wave of the future of campaign ads. Could the day come when campaigns can save a lot of money by advertising more directly to audiences rather than buy pricey time on local television stations?

U.S. Rep. Zach Wamp says technology has changed campaigns and that ways to reach voters are constantly evolving. Lt. Gov. Ron Ramsey says it’s possible that shifts may come. Knoxville Mayor Bill Haslam says conventional television advertising is still the way to reach voters needed to win. Democratic candidate Mike McWherter, who has already wrapped up his primary race, has not gone up with ads on television yet, but he is certainly using the other tools of the Internet to connect with voters.

“I’ve been involved in politics 28 years, and it has evolved in every cycle like you wouldn’t believe,” Wamp said. “I was asked, ‘What about print?’ I said print has changed. Print is electronic. If you’re asking me if we’re communicating very effectively off of television, the answer is absolutely.”

Wamp said to go check out more than 14,000 Facebook friends for his campaign, or over 4,000 people who follow Wamp on Twitter.

“We’re communicating literally with hundreds of thousands of people not on television now,” Wamp said. “Yes, it’s changing rapidly. Everything is wireless.”

Wamp notes how new media communications played a key role in the last presidential campaign, which boosted Barack Obama’s bid for the White House. With each election cycle, technologies are playing a fascinating role. But it’s still questionable as to whether statewide campaigns will ever be able to work without conventional television advertising.

“It’s possible,” Ramsey said. “The Internet will be part of that, but cable television will be part of that, too.

“When you have Fox getting the highest rating show on television news right now and the three major networks at the bottom of the heap, suddenly you can start reversing that. So it will be a combination of the networks just falling off a cliff and scratching their heads wondering why — but I can figure it out — and you’ve got the networks like Fox News of the world coming on. So I would like to think that would be the case, probably the next election cycle.”

Haslam is not so sure. The Haslam campaign has used modern techniques like most campaigns. But any move away from conventional televison advertising sounds remote for now to Haslam. He doesn’t think the landscape will change anytime soon.

“I would like to think that, but the reality is the difference in advertising on broadcast and not is phenomenal, in terms of the scope of awareness,” Haslam said. “So could that day be coming? Maybe.

“Nobody 10 years ago would have thought we’d be where we are. I’ll put it this way. Those of us who play the inside game of politics and look at everything on the Internet, we’re still the distinct minority. Most voters aren’t seeing that.”

Haslam’s campaign recently announced two new television advertisements, one of which addresses civility and shows Haslam alone in a studio setting, saying the governor’s race should stick to the issues.

Haslam said that ad was not in response to anything that had been said recently in the campaign.

“We filmed that weeks ago, so it’s not a response,” Haslam said. “It’s only a response to what I hear from people when I’m out there campaigning. That’s what we want to talk about. This is important stuff. Let’s talk about the important stuff.”

Ramsey has chosen the image of a boot, saying Tennessee should give Washington “the boot” on how the nation’s capital is treating the states. When Haslam’s first ad showed the candidate and supporters walking in the rain with red umbrellas, the umbrellas got a lot of the attention. Wamp has said he doesn’t have an umbrella or a boot but a plan, and his first ad showed him standing in front of an industrial site emphasizing the need to attract jobs to the state. He opens a book that shows a video of Wamp talking to people at a work site. Subsequent Wamp ads are aimed at different regions of the state, and he holds up his 20/20 Vision book, although he doesn’t open the book in the latest ads.

Most people can distinguish between a quality production ad and simple video of a campaign event, but then again some people who don’t study such things might not see the difference, which leads again to the question of whether traditional campaign methods are going the way of the black-and-white TV.

“I am the most savvy candidate in this race from either party on using the new medium of communication through the Internet,” Wamp said. “That’s why I have the most Facebook friends, the most Twitter followers. We’ve been at it a long time.

“It’s nice. You can do a lot of things with a little money. That’s one of the ways this past presidential campaign took on a new dimension, and so now you can do it at the state level and at the local level. And we’re doing it. I’m not going to tell you how we’re doing it, because I don’t want them doing it as well as we do it, but we’re doing it.”

Wamp said the majority of a campaign’s spending is on television. Some of the new ways of campaigning don’t cost as much.

“Yes, you can do it a lot less expensively. This is not about ‘Who has the most money wins,'” he said. “It’s about ‘Who has the most votes wins.’ You can get votes without a lot of money, and actually that’s the governor you need — a person who knows how to do more with less.”

Wamp said most of the money is spent on network affiliated television in a statewide campaign, whether it’s for the U.S. Senate or for governor.

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Williams ‘100 Percent Against’ Ramsey-Backed Budget Plan

House Speaker Kent Williams told members of the Shelby County legislative delegation he was “100 percent against” the Senate GOP’s budget proposal Wednesday.

He said the plan would cut programs and departments too deep then build up a pool of money to sit unspent in the state’s rainy day fund.

“I will never, never be comfortable cutting even more than we’re cutting now and keeping $500 million in the bank. I just can’t live with that,” he said.

Williams said the cuts in the Senate are driven by politics, including the race for governor.

“I think in the Senate, it’s more politics,” he said. “I guarantee if we didn’t have members running for governor and Congress, we would have already passed this budget. It’s a political statement and you just don’t play political games at the stake of our citizens.”

Senate Republicans, led by GOP gubernatorial candidate and Lt. Gov. Ron Ramsey, pitched an alternative to Gov. Phil Bredesen’s budget plan Tuesday.

Williams said he was leaning closer to the Democratic governor’s proposal which included using some $340 million in pending federal dollars to help level out the budget, along with several tax increases.

“I just can’t see cutting money from our mental health, and our childrens’ services, from our farmers, from our state employees, our teachers,” he told the delegation. “How can we do that and go home with $500 million in the bank. I just don’t get it.”

He urged the mostly Democratic delegation to toe the line and not give into political pressure to go along with the Senate’s latest budget plan.

Tennessee House Republicans, who so far have taken a backseat to the governor and Senate GOP in the budget gamesmanship, say they’ll pitch their own state-spending proposals come Monday.

But Republican leaders in the House say they only want to tinker with the Senate version — not veer away from it completely.

“I think what the Senate rolled out is a good template. It’s rock solid. And it does those things that we want,” said House Republican Caucus Chair Glen Casada, of Franklin. “It cuts the size of government and no tax increase. One or two things we want to tweak, and then we’ll have a really good plan.”

“I think you’re going to see a House thumbprint on that plan, if you will. And you’re going to see something that cuts spending, there will be less expenditures this year than last year and you’re going to see something that has no taxes,” Casada told TNReport Wednesday morning.

House Speaker Williams has been a “Carter County Republican” since he became persona non-grata in the Tennesse GOP after maneuvering to lead the chamber last year.

Casada said the caucus’ ideas will likely be revealed as an amendment to the budget bill on the House floor. He said the party will be building onto the Senate budget plan — not writing a new one from scratch.

State Capitol lawmakers are presumably nearing the home stretch of the spring legislative session. Within the next few weeks, they plan on ironing out a state spending and revenue plan for the budget year that kicks off July 1.

Williams said he suspects the Senate is hoping to vote soon on a budget plan because it is running out of legislative days. With only three days left, lawmakers will be refused any per diem money for food and lodging for any extra days in session.

Several budget ideas are already floating around Capitol Hill. Democratic Gov. Phil Bredesen is offering up several tax increases to avoid program cuts, suggesting the state close a loop hole that would increase cable costs for some customers, raise the cost of drivers licenses but stretch out how often the licenses need to be renewed, and lift a sales tax cap on single-item purchases over $3,200.

In turn, he offered a 3 percent pay bonus to state employees and teachers, saying those employees have been on a three-years-and-running pay freeze.

Senate Republicans scratched all of those ideas Tuesday, including the state employee bonus.

A House Republican spokesperson said the GOP members will be meeting later in the day to discuss the various budget proposals already on the table. She said all Republicans, including the House Speaker, will be invited to the table.

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Flood Issues Dominate Candidate Forum

Three gubernatorial candidates took on one of the toughest questions possible Monday night when asked at a forum at Lipscomb University how best to respond to a massive flood like the one Nashville and much of the state just endured.

U.S. Rep. Zach Wamp said he brought a national perspective to such a special challenge. Knoxville Mayor Bill Haslam emphasized the need to set the right priorities in organizing a response. Jackson businessman Mike McWherter talked about his personal hardship from the storm and described joining the sandbagging efforts at MetroCenter in Nashville. One other candidate, Lt. Gov. Ron Ramsey, was scheduled to attend but couldn’t because he had to work — in session at the Legislature.

Wamp, Haslam and Ramsey are Republicans. McWherter is the lone Democrat in the field.

The question itself about the flood came in unusual fashion, preceded by a three-minute video of images from the storm accompanied by music. The mood was reflective, not so much somber, at the Collins Auditorium event held by the Nashville Junior Chamber of Commerce. Joel Sullivan, CEO of the Nashville Area Red Cross, addressed the audience after the candidates spoke, and the evening was all the more poignant given that Lipscomb’s Allen Arena had served as a shelter for victims.

Wamp said the circumstance presents the challenge of making key decision-makers understand the magnitude of the problem many of the flood’s victims face, due to its historic nature, and he likened the situation to Hurricane Katrina.

“We’ve got to make a consolidated effort to convince people that those who were affected by Katrina and the Gulf storm surge are no different than Tennesseans who didn’t have flood insurance,” Wamp said.

“The challenge we have here is asking the United States government to do more for us than the normal FEMA rule, because a lot of young families had no idea when this week began that they would effectively end up with a second mortgage, because all they may qualify for is a long-term low-interest loan.

“This is important for us to stand together as a state and ask the federal government to help us even more.”

Wamp said there was no one else in the race with as much experience in this area as he has. He said he had toured the Katrina zone as a member of Congress multiple times and wrote reports for the Appropriations Committee on the challenges regarding Katrina.

McWherter explained that his company in Jackson was flooded.

“There was 21 inches of water in my office,” McWherter said. “I was watching tadpoles swim around my desk that evening.”

He said after Interstate 40 opened up, he drove to Nashville for the volunteer work.

“I wanted to prevent what had happened to me,” he said.

Haslam described talking to people as divergent as Colin Reed, chief of Gaylord Entertainment, home of the flooded Gaylord Opryland Resort hotel and the Grand Ole Opry House, to a man running a funeral home in Millington.

“The governor’s job is to figure out what is happening, what the state can do to help, then immediately talk to the federal government,” Haslam said. “One of the unique things in this was the widespread impact. It will be a lot more work and take a little longer than maybe it has in the past.”

McWherter complimented the work of Nashville Mayor Karl Dean and Gov. Phil Bredesen and said that was the kind of leader he would like to be.

The forum did not deal solely with the flood. One noteworthy item was that the forum presented a clear case of a conflict of interest, with a candidate openly admitting he would have to step aside on an issue.

That was McWherter on the issue of whether wine should be sold in grocery stores. The issue is whether large grocery businesses should be able to sell wine, which is now fundamental to small-business liquor stores. McWherter is a beer distributor and has an interest in how that issue would affect his business. He openly admitted it and said he would leave the decision to the legislature.

McWherter began his answer by saying, “I am a beer wholesaler, and I prefer that everybody drink beer.”

The issue of a conflict of interest has come up before with Haslam and his family’s business, Pilot Corp., which runs Pilot Travel Centers, but Haslam has been hit on that issue mainly as a roads issue. Haslam said on the wine matter it’s important to protect the investment of small businesses, saying, “My tendency now, until I hear something better, is to leave the law as it is.”

Ramsey’s absence didn’t prevent Wamp from pointing out that when Ramsey first went to the Legislature, there were 10,000 fewer people who worked in state government. Ramsey has painted himself as one who would cut government, but the Wamp campaign has linked Ramsey to the growth in state government during his time in state office.

Wamp, who has been criticized for being part of the problem in Washington in his role as a congressman, used the forum to emphasize his knowledge of how the federal government functions, given that over half the state budget is federal money passing through.

News Transparency and Elections

Candidates Eager to Debate

Gubernatorial candidates have been eager recently to get on with debates, rather than forums. But as another major forum is scheduled Monday night at Lipscomb University, the tone may be somewhat subdued in the wake of the recent flooding in Middle and West Tennessee.

The scheduled forum, hosted by the Nashville Junior Chamber of Commerce, is expected to stick to the familiar format of candidates answering questions one at a time, although it’s likely candidates at some point will feel a need to express their feelings about the impact the recent floods have had.

The Junior Chamber has touted the expected participation of the three major Republican candidates — Knoxville Mayor Bill Haslam, U.S. Rep. Zach Wamp and Lt. Gov. Ron Ramsey — as well as Jackson businessman Mike McWherter, the lone Democrat remaining in the campaign. Questions are expected to focus on subjects such as economic expansion and education. Another forum is scheduled earlier in the day Monday in Nashville by the Associated Builders and Contractors.

The race has been going forward where it could in the state. Haslam, for example, held a big event in Memphis with former U.S. Sen. Howard Baker on Thursday. But candidates have also been expressing their concerns about victims of the disaster, including links on campaign Web sites for where to find help. Ramsey established a drop-off site in Bristol for flood relief for the other parts of the state. Much of the state was spared the flooding.

Forums for the candidates thus far have amounted to candidates being given time to make opening and closing statements and answer questions, one at a time, in a structured format. But the desire for more interaction could be sensed among the candidates after a recent forum at Middle Tennessee State University.

Candidates have been appreciative of the opportunity to give their pitches, but thus far in the race to succeed Gov. Phil Bredesen, who is term-limited, there has been little room for real debate.

The basic forum does still serve as a valuable format for voters, many of whom are just now becoming familiar with the candidates. But it’s not surprising that the candidates themselves, who have been doing such events since last year, are ready for more.

“I’m ready for the television cameras to come on statewide and us to have as many open, free-flowing debates, so we can talk issues,” said Wamp after the MTSU forum.

“There’s been so much canned, staged, scripted, coached language. We’ve been together over a hundred times, and we’ve yet to really get into ‘wait-a-second-that’s-not-true.'”

Wamp is not alone.

“As soon as we can get there, I’m ready for it,” Ramsey said. “I am, because I do think I have the knowledge and experience on the issues to be able to debate them.”

Ramsey said he has already found moments when he thought he had the upper hand because he believed he had a better command of the facts.

The recent forum in Murfreesboro was even more constraining than most since much of the program involved asking a specific question of a specific candidate and not of the others.

“In a situation like this where there are a lot of questions you want to answer more of them,” Haslam said. “There’s a lot of those where you think, ‘I want to answer that one, too.'”

When asked that night if he’s ready for a debate format, Haslam was quick to respond.

“You bet,” he said. “I would love that. The problem with this format is somebody can make a comment, and if you’ve gone before them, you don’t get a chance to talk for about six things later, and by then it’s a long way away. I would prefer a debate.”

While political crowds may be familiar with the candidates and their positions, it might be just now dawning on many potential voters that there’s a governor’s race going on. That’s why there’s cause to mention Republican candidate Joe Kirkpatrick, who is often excluded from major events because of fund-raising levels but is working as hard as any of the candidates. Meanwhile, several independent candidates will be on the ballot.

A big reason candidates have been doing forums for so long is the simple fact that they had to launch fund-raising efforts long before an official campaign begins. In fact, frustration over raising money has been a major factor why some candidates have already dropped out on both the Republican and Democratic sides of the campaign.

Then there’s the Democrats’ own special factor. At one time, the Democratic field included McWherter, Kim McMillan, Jim Kyle, Roy Herron and Ward Cammack. All but one, McWherter, have dropped out, for various reasons, which leaves forum organizers with an odd situation. Just at a time many voters are beginning to pay attention, all but one of the Democrats are out.

The real competition at the moment is the three-way battle for the Republican nomination. So it creates a somewhat awkward situation to have McWherter on stage with the three Republicans. Until McMillan quit the race to run instead for mayor of Clarksville, an audience could normally count on at least two candidates from each party to participate.

McWherter has expressed his own frustration with a forum-style program.

“I really would like to have the opportunity to talk about the tax incentive program I want to deliver for small business in this state,” McWherter said. “It’s hard to do that in a 90-second response.

“I want to talk about that and the need to go out and recruit these supplying industries for Volkswagen, Wacker and Hemlock. I’m a little frustrated truthfully with not being able to spend a little more time going a little more in-depth. We’re kind of at the surface level at this time. But I know I’ll get that chance, and I’m excited about being able to do that.”

News Tax and Budget

Flood Delays GOP Budget Plan; Doesn’t Alter Anti-Tax Stance

Indefinite disruptions to commercial activity and staggering losses of personal property to the catastrophic flooding over Middle and West Tennessee further bring home the point that inundating the private sector with new taxes now is bad public policy and worse politics, say legislative Republicans.

The GOP budget plan, put on hold for yet another week, will still include deeper cuts to state spending than what’s been proposed by the governor in order to avoid adding to taxpayers’ burdens, Senate Majority Leader Mark Norris said Thursday.

“I think the recent flooding and the devastation from the storms is additional grounds for us to go easy on Tennesseans and quit taxing them right now,” Norris said.

Senate Republicans say they might be ready to unveil their version of a state budget early next week after ironing out details with their House counterparts.

Lt. Gov. Ron Ramsey said he is sharing the plan with both Republicans and Democrats in the House of Representatives to speed up negotiations. “I just kind of want to pass this around, bounce it around, see where everybody is to make sure and get relatively close to begin with,” said Ramsey.

Ramsey hopes the plan, which he said removes all tax increases posed by Gov. Phil Bredesen earlier this year, could be officially approved by both chambers in “a week or so.”

GOP lawmakers have promised to share an alternative to Bredesen’s budget plan for weeks, but have repeatedly missed their own deadlines, saying they need more time or are waiting for key documents from the governor’s office.

A vote Wednesday night in the House in favor of a hospital tax that will help close part of a $660 million hole and dodge cuts to TennCare and helped clean up next year’s budget picture, said Norris.

Lawmakers are still facing at least a $105 million hole in the next budget year that kicks off July 1. Bredesen suggested filling it with additional tax revenue the state can collect if it lifts the sales tax on purchases higher than $3,200.

Republicans nixed that idea and say they’ll propose an alternative plan “without,” in Norris’ words, “all the taxes and fees the governor seeks.”

Andrea Zelinski can be reached at

Press Releases

Ramsey Criticizes Bredesen for Not Signing Prohibition on Tax-Funded Abortions

Statement from Lt. Gov. Ron Ramsey, R-Blountville, May 5, 2010:

“I am extremely disappointed that Governor Bredesen declined to sign Senate Bill 2686, which prohibits taxpayer funded abortion in the federally mandated health care exchanges created by Congress and President Obama. Tennessee was the first state in the nation to pass this legislation and now other states are following suit because Washington should not be dictating this policy to Tennessee. Tax dollars should never be used for abortion and I am very pleased this law will take effect immediately even though the Governor chose not to sign it.”