Featured News Tax and Budget

$500K Spent on Lodging Allowances for Nashville-Area Lawmakers Last Year

Tennessee taxpayers spent more than a half-million dollars last year on lodging and other incidental expenses for legislators who live less than an hour away from the state Capitol.

For the nine state senators and 21 representatives who live near the Capitol, the state spent $532,490 in per diems, even though those lawmakers typically spend the night at home after a day of legislative work, a TNReport analysis found. TNReport looked at the $185 per diem payments for lawmakers who live within a 50-mile radius of the Capitol, a benchmark also used by the IRS for tax purposes.

Many say they never or rarely stay in a hotel room when downtown for legislative business. But instead of directly defending their practice of accepting the money, they leaned on a simple fact: The law entitles them to it.

“I don’t set the policy. I’m merely following policy,” said Rep. Joe Pitts, a Clarksville Democrat who collected $18,517 in per diem in the last year. “I keep my trips to a minimum and, frankly, only claim half the time that I’m out there.”

The Nashville-area House members collected between $24,000 and $15,700 each from July of last year through June in the allowances, which are meant to compensate for lodging, meal and incidental expenses.

Rep. Sherry Jones lives about a 15-minute drive from the statehouse, but she’s collected $23,473 in legislative per diem in that time period, more than any other legislator.

“State law says that when I go to work, I get paid. So, I do what the state laws says,” the Nashville Democrat said in a telephone interview Wednesday. She added that she tends to several committees addressing children and youth issues which call her to the Capitol often.

“I go in a lot that I don’t even charge per diem for,” she said. “I might be on the phone with people all day… and I don’t charge that.”

Lawmakers have two methods for logging in legislative time in order to receive the allowances. One way is by showing up to committee meetings or legislative session in the House or Senate, which records their attendance automatically. The other way requires members to fill out paperwork detailing what legislative work they did on a given day. The documents require approval from the House or the lieutenant governor in the Senate.

Rep. Debra Maggart, R-Hendersonville, collected $18,943 during the same period, more than any other nearby Republican representative. She attributes the high allowance to her membership on several active committees, including a panel studying infant mortality issues, and said she “rarely” requests per diem outside those meetings.

But critics said the lawmakers are likening their role in the legislature to a full-time job.

“The Tennessee General Assembly is a part-time legislature, and it needs to stay that way,” said Justin Owen, president of the Tennessee Center for Policy Research, a group advocating limited government that is critical of wasteful spending. “It’s not a full-time job, and if they want to treat it like a full-time job and they’re trying to make it the equivalent of a full-time job, they have to find another one.”

The top five House lawmakers who pocketed the most per diem dollars are Democrats, and only three of the top 10 are Republicans. The highest-paid Democrats collected between $19,300 and $23,500 compared to $18,500 to $19,000 taken by Republicans.

The 21 House members on average collected $18,028 in the 12-month period. The nine senators accepted $17,098 on average, although Republican Sen. Bill Ketron took home $21,393, more than any other senator.

The payments have become a campaign issue for Ketron, who has served in the legislature eight years and is facing Columbia councilwoman Debbie Matthews in the November election.

“This is wasteful, and it’s not leadership,” she said. “I don’t care if they’re a Democrat. I don’t care if they’re a Republican.”

If elected, Matthews said she’d push for a tiered system that differentiates how much per diem lawmakers receive based on their home’s distance from the Capitol. She said she’d also be interested in a receipt system.

But lawmakers say they don’t know if there is a better way to compensate members for their expenses.

“If you do it by receipts, then I think people are going to scream,” said Rep. Charles Sargent, R-Franklin, who collected $18,472. “If you do it per day, people are gong to scream. I can’t tell you the best system.”

Per Diem Collected by State Representatives Living within 50 Miles of the Statehouse, July 2009-June 2010

Sherry Jones, D-Nashville, $23,473

Brenda Gilmore, D-Nashville, $21,833

Stratton Bone, D-Lebanon, $20,353

Gary Odom, D-Nashville, $19,655

Gary Moore, D-Joelton, $19,372

Debra Maggart, R-Hendersonville, $18,943

Glen Casada, R-Franklin, $18,573

Joe Pitts, D-Clarksville, $18,517

Charles Sargent, R-Franklin, $18,472

Kent Coleman, D-Murfreesboro, $17,505

Josh Evans, R-Greenbrier, $17,278

Donna (Rowland) Barrett, R-Murfreesboro, $17,079

Mary Pruitt, D-Nashville, $17,051

Curtis Johnson, R-Clarksville, $16,594

Susan Lynn, R-Mt. Juliet, $16,594

Janis Sontany, D-Nashville, $16,552

Phillip Johnson, R-Pegram, $16,437

Ben West, D-Hermitage, $16,395

Michael Turner, D-Nashville, $16,266

Mike Stewart, D-Nashville, $15,882 (Returned all 2010 per diem pay except January)

David Shepard, D-Dickson, $15,784

Featured News

State Prepares Budget Cuts for Future Guv

As candidates for governor bicker over the size of Tennessee’s budget shortfall next year, Gov. Phil Bredesen’s administration has asked state agencies and departments to shave 1 percent and 3 percent from their annual budget requests.

The state would probably still be short on cash with the reductions, Dave Goetz, commissioner of the Finance and Administration Department, told a legislative committee. He expects Tennessee will fall about $45 million short, an amount equal to a reduction of 1 percent. The state would save $160 million by enacting the 3 percent cut.

Bredesen leaves office in January, but the governor’s top budget officer says the cuts will set up the state’s incoming chief executive with at least one pre-arranged option for balancing next year’s budget.

“We’re leaving as square a set of guidelines as possible,” said Goetz. “Nobody needs to be running around with their hair on fire.”

The two major candidates for governor cannot agree on the scope of next year’s budget picture. Republican Bill Haslam says the state will face a $1.5 billion budget hole when federal stimulus dollars run out, but Democrat Mike McWherter says those numbers are way too high.

The candidates elaborated during Tuesday night’s gubernatorial debate at Tennessee Tech University in Cookeville.

“We’re going to have a billion dollars-plus less in revenues next year,” Haslam said.

And while he didn’t offer specifics as to what he’d target in the way of reductions to state spending next year, Haslam said his experience as mayor of the state’s third-largest city has taught him “you don’t go in and make one huge cut anywhere.”

“We actually cut the city of Knoxville’s budget by making thousands of different cuts in a lot of different places,” he said. “The first thing to ask is, ‘Should government even be doing this?’”

Haslam said he would investigate “whether we’re doing things as effectively and efficiently as we can.”

McWherter, on the other hand, suggested that while the state’s financial picture is far from rosy, it isn’t nearly as bad as it could be — and for that matter, as bad as it is in many other states.

“(Halsam) wants to terrify you into thinking that our budget is going to be in a huge hole once the stimulus money runs out,” McWherter said, adding that he thinks the legislature and Bredesen have done a good job “matching recurring expenses with recurring revenues.”

“Yes, our budget might be less than it is this year … but they’ve done a very responsible job, Republican and Democratic alike, of being able to match those revenues with those expenses,” he said.

The key to turning things around, said McWherter, is to put as many people back to work as possible — something he said his proposal for offering tax incentives to businesses that hire new employees would do.

Goetz, the chief financial officer for the term-limited Democratic governor, says next year will indeed be difficult, but the state is prepared.

“I know there’s been a lot of public discussion here about how big’s the hole, and what’s the next person going to have to do,” Goetz told the legislature’s Joint Fiscal Review Committee Wednesday. “I believe, working together, we’ve left the next administration a plan that they can follow.”

This year’s budget is just shy of $30 billion, with $12.1 billion funded from the state. Goetz says the 2010-11 spending plan includes $189 million worth of expenses, programs and projects that are paid for with one-time stimulus money and other federal dollars that are slated to end next year.

Because of those cuts, next year will be tough, said Sen. Randy McNally, who chairs the Senate Finance, Ways and Means committee.

“There’ll be lots of pressure on us to restore things to the budget that have been funded with one-time money,” said McNally, an Oak Ridge Republican who chairs the Senate Finance Ways and Means Committee.

The reductions would target the agencies’ recurring budgets with specific aims at reducing personnel, overhead and operating costs, but exempt several education programs and other spending initiatives. The ultimate decision of whether those cuts will stick will be up to the new governor and General Assembly.

Last year, Bredesen asked the same departments to prepare plans to slash both 6 percent and 9 percent from their budgets. Cuts in many of those departments were upheld.

Tax collections have dropped since mid-2008 but slowly began growing again in April.

Revenues are still shaky, though. Collections of sales, excise and other taxes were up 3.08 percent from this time last year, but still fell $5.4 million below budgeted estimates, Goetz said.

The state’s revenue collections tapped out at $749.3 million in August, making it the fifth month in a row the state collected more than the year before.

Officials believe the shaky but slow growth may indicate that the state’s economy is beginning to recover.

However, Tennessee’s finances are behind.The August collections still fell $35 million below the level two years ago, and Goetz predicted revenues won’t fully recover until 2014.

Mark Todd Engler contributed to this report.

Press Releases

Haslam Wants Review Of State Government

Press Release from Bill Haslam for Governor, April 14, 2010:

Will Eliminate Waste, Set Priorities, Improve Efficiency, Effectiveness

MEMPHIS – Republican gubernatorial candidate and Knoxville Mayor Bill Haslam announced today plans to launch a top-to-bottom review of state government immediately upon taking office if he is elected Tennessee’s next governor.

This comprehensive review will be used to eliminate waste and find savings to help overcome projected budget gaps, improve efficiency and effectiveness throughout state government, and set measurable goals for the purpose of furthering the state’s priorities. Chief among these priorities will be making Tennessee the No. 1 state in the Southeast for high quality jobs.

“Times are tough, and the next governor will face a state budget situation more difficult than any in modern memory,” Haslam said. “However, the last thing we need to do is raise taxes or create new ones. I am 100 percent opposed to a state income tax, and raising a sales tax that is already the highest average combined state and local rate in the nation is also definitely off the table. The next governor must be prepared to restructure state government.”

As governor, Mayor Haslam will appoint and then lead a taskforce made up of state and local government officials, Tennessee business leaders, and other key stakeholders and experts from around the state who will spearhead the effort to review state government and develop a roadmap for its restructuring.

“It’s critical that this be done right. While the budget situation awaiting the next governor will certainly be challenging, we have to view this as an opportunity to fundamentally rethink the role of state government and make things better for the future,” Haslam continued.

“A top-to-bottom review is the first step on the road to a leaner and more efficient, effective, and accountable state government. We must set priorities and be prepared to make tough decisions,” said Haslam. “Given my experience as a successful business leader and Mayor of a large city, I am ready to take on this challenge.”

Bill Haslam is the two-term Mayor of Knoxville, re-elected in 2007 with 87% of the vote. A hardworking, conservative public servant, he led Knoxville to become one of the top ten metropolitan areas for business and expansion, while reducing the city’s debt, tripling the rainy day fund, and bringing property taxes to the lowest rate in 50 years. An executive leader with a proven record of success, he helped grow his family’s small business from 800 employees into one of Tennessee’s largest companies with 14,000 employees. His combination of executive and public service experience makes him uniquely qualified to be Tennessee’s next Governor.

Bill and Crissy Haslam have two daughters, Annie and Leigh, and a son, Will, who resides in Knoxville with his wife, Hannah. For more information on Bill Haslam, please visit

Press Releases

Deadline Extended for Comments on Proposed Local Debt Policy

State of Tennessee Press Release, 16 Dec. 2009 (pdf):

Comptroller Justin P. Wilson has extended the deadline for providing public input on a model debt management policy for local governments until Jan. 8, 2010. Wilson initially set mid-December as a tentative deadline for collecting comments, but decided to extend the timetable a few more weeks to give people more time to respond.

After collecting more input from citizens, Wilson plans to submit a proposed model debt policy to the State Funding Board for consideration. If the Funding Board adopts the model debt policy, local governments throughout Tennessee may be required to develop and adopt debt policies of their own that are consistent with the model.

Wilson expects the model debt policy to make it easier for citizens and members of local governing bodies to get details about debt transactions, including the relationships between the parties involved in the transactions.

Wilson also expects the model debt policy to have provisions prohibiting an individual or company from representing more than one party in a local government bond transaction. For example, a local government’s financial advisor would be banned from also serving as the local government’s bond underwriter or bidding on the debt.

And Wilson expects all fees, relationships and contracts between companies, their employees and independent contractors to be disclosed under the new policy.

“It is so important for citizens – and the local government officials who represent them – to be able to access detailed information about these bond transactions,” Wilson said. “To make sure the public’s interests are being properly represented, these transactions need to be more transparent to outsiders and potential conflicts of interest must be eliminated.”

Wilson said he also expects the model debt policy to include some standards for the use of variable rate debt by local governments. And there will be provisions discouraging the use of excessively high “balloon payments” in later years of loans.

“My concern is that some local governments may be getting into deals that seem good on the front end because the initial debt payments are low,” Wilson said. “However, the debt payments rise over time, which can create a heavy burden for local taxpayers – sometimes years after the people who approved the deals have moved on.”

Tennesseans can review a draft of the model debt policy here: (pdf)

They can also make suggestions, offer comments or ask questions by e-mailing the Comptroller’s office at