Business and Economy NewsTracker

Norris Tweets Dig at Dems on Solyndra Setback

Everything under the sun seems to be open to squabbles over jobs between Republicans and Democrats in the Tennessee Legislature. Now it’s solar panels.

Senate Majority Leader Mark Norris tweeted Tuesday night, “Solyndra’s shadow as Dems plan to tour Bredesen’s solar farm.” Norris linked to a recent Nashville Business Journal article noting that solar businesses either seem to be starting up or fading away.

Solyndra, based in Fremont, Calif., specializes in rooftop solar power systems. The company received a loan of $535 million in 2009 as part of the federal stimulus package and has been lauded by the Obama administration as an example of the nation’s energy future.

But the company has shut down, laid off hundreds of workers and filed for Chapter 11 bankruptcy protection. The company also faces a federal investigation. The House Energy and Commerce oversight committee is scheduled to begin hearings on Solyndra on Wednesday, but Solyndra executives have postponed their appearance, citing the bankruptcy proceedings. A column posted Tuesday night on Politico called the Solyndra venture “corporate favoritism” and “Chicago-style deal-making.”

Norris picked up on the Solyndra news as a further dig at Democrats, who plan to make the West Tennessee Solar Farm with Haywood County Mayor Franklin Smith part of their jobs tour Sept. 19-24.

The Solar Farm is on the first day of the Democrats’ tour, right after a tour of the vacant West Tennessee megasite. The solar farm, near Interstate 40, is part of the Volunteer State Solar Initiative of former Gov. Phil Bredesen.

Norris responded to the Democrats’ jobs tour announcement early this month by calling it the “Obama Apology Tour.”

But in February, Republican Gov. Bill Haslam expressed his pleasure that the U.S. Department of Energy had cleared the path for the solar farm, citing Tennessee’s commitment to a clean energy future.

“It’s a tangible demonstration that jobs and investment in this fast-growing sector of our economy are welcome in Tennessee,” Haslam said in a formal statement at the time.

In the same announcement, Economic and Community Development Commissioner Bill Hagerty said, “We’ve seen billions of dollars in capital investment in the solar industry alone in Tennessee. Coupled with the investments we’re seeing in energy efficiency, sustainable transportation and other forms of clean energy, the clean energy sector has the potential to truly become a bright spot for Tennessee in terms of job growth.”

Haslam and U.S. Sen. Lamar Alexander recently visited another Bredesen-linked project, the ethanol-from-switchgrass process in Vonore, Tenn., after which both the governor and the senator expressed support for the business but limited interest in subsidies for it.

Press Releases

Comptroller: Weatherization Funds Wasted, Misspent

Press Release from Tennessee Comptroller Justin Wilson; Dec. 20, 2010:

Federal stimulus money intended to provide home weatherization improvements for low-income persons is being wasted or misspent, a preliminary review by the Comptroller’s Division of State Audit has revealed.

Comptroller Justin P. Wilson outlined the results from the review of the Weatherization Assistance for Low-Income Persons (WAP) program in a letter sent today to Virginia T. Lodge, commissioner of the state Department of Human Services.

In April 2009, the U.S. Department of Energy awarded the state $99 million in American Recovery and Reinvestment Act of 2009 (ARRA) funds for the program, plus another $7 million in non-ARRA funding during fiscal year ended June 30, 2010.

The WAP program is administered by the Department of Human Services, which contracts with local governments and nonprofit organizations across the state.  The local governments and nonprofits, known as subrecipients, subcontract with general contractors to perform the weatherization work. The subrecipients also employ or contract with individuals to conduct energy audits.

State auditors reviewed files for 444 homes that were weatherized through the WAP program and found deficiencies in more than half of those cases.  Some files lacked adequate documentation, including verification that applicants met income eligibility requirements and properly completed inspection reports that would indicate whether weatherization work was properly performed.

State auditors also conducted site visits at 84 homes that were supposed to receive weatherization work through the program.  In 45 percent of those cases, energy inspectors approved the work although the contractors had not performed some weatherization measures, had not properly completed the required weatherization measures or had performed work that was not allowable under the WAP program.

Other deficiencies included the use of uncertified or unauthorized persons to perform energy audits and the use of one unlicensed contractor.  In some cases, improvements such as stairs and ramps were built using program funds, even though they provide no weatherization benefits.

Moreover, the auditors noted several instances where critical weatherization measures were recommended but the measures were not performed or should have been recommended and authorized, but were not – such as fixing broken window panes.

In his letter to Commissioner Lodge, Comptroller Wilson stated: “It is critical that those individuals charged with the responsibility for approving, performing and reviewing the actual work realize that there are real consequences for failure to meet their obligations.  To that end, all remedies, including administrative, civil and criminal actions, should be taken to hold those individuals accountable for their actions or failures to act.  One of the greatest defenses to fraud is individuals understanding that there will be consequences for their behavior.”

The final findings will be included in the comprehensive audit of federal financial assistance received by state government, called the Single Audit, which is due next March 31.

Based on the preliminary work, it appears that the state is materially out of compliance with WAP requirements.

Auditors and monitors from the Department of Human Services have also been reviewing the actions of the department’s subrecipients, who are primarily responsible for the program.  Human Services’ staff have found similar problems in their review.

At the conclusion of the audit process, the state auditors will report the amount of costs that are questioned.  It will be the responsibility of Department of Human Services to take appropriate actions with regard to the subrecipients.

Approximately 6,800 homes have received weatherization assistance just for the period ended June 30, 2010.  Since it is not possible for state auditors and department staff to exam every home, it is critical that the subrecipients’ energy auditors scrupulously perform their responsibilities in order to reduce the substantial risk of fraud, waste, and abuse in such a large and complex program.

The letter to Commissioner Lodge, including photographs of some of the inspected homes, may be downloaded at:

Copies of the letter have also been forwarded to the Attorney General and chairs of the State and Local Government Committees of the General Assembly.

News Tax and Budget

Lynn Sees Gap Spanning Beavers’ Public Words, Legislative Deeds

One of this primary season’s most watched political brawls is heating up this week as two well-known state sovereignty champions whip negative campaign mailers and press releases at each other.

On top of sparring about the outcome of anti-health care mandates bills that failed this year, Republican State Rep. Susan Lynn is suggesting that when the rubber hits the road, state Sen. Mae Beavers’ doesn’t take either Tennessee highway safety or her professed ideological beliefs very seriously.

And a Democrat in the state Senate Dist. 17 race is capitalizing on the region’s long list of decrepit state bridges, too, promising the issue will live on long past primary election day Aug. 5.

“It’s your family. Could you vote ‘no?’ Mae Beavers did! Mae voted against funding safe bridges,” reads a Lynn campaign mailer sent out to district voters this week. “Elect me as your State Senator and I’ll fight for you to ensure that we have safe, functioning transportation corridors in DeKalb County.”

Sligo Bridge, in DeKalb County, was one of 200 roadway structures deemed by Tennessee Department of Transportation officials in need of upgrade after the high-profile 2007 bridge collapsed in Minnesota that killed 13 people.

Two years later, the federal government sent Tennessee enough stimulus dollars to fund about 70 bridge repairs statewide. Gov. Phil Bredesen then began urging the Legislature to borrow another $350 million to fix 200 other bridges.

According to voting records and archived floor debate, Beavers — who said she voted against this year’s Tennessee budget because it used stimulus funds — actually wanted the federal government to cover the bridge’s repairs when the issue came up last year. But the Tennessee Department of Transportation nixed the project from consideration because it wasn’t “shovel ready,” in keeping with federal strings attached to the stimulus money.

After some political negotiating, the Legislature — with Lynn voting in support — ultimately OK’d the plan to issue bonds to pay for the bridge repairs during the final June days of the spring 2009 legislative session.

However, the two-term incumbent senator from Mt. Juliet — who is often outwardly critical of federal meddling and interference into the affairs of state governments — voted against a borrowing package so the state could fund the bridge repairs on its own.

Before casting her “no” vote on SB2358, Sen. Beavers gave several reasons she opposed the bond measure, including that behind-the-scenes political maneuvering had unnecessarily prevented the Sligo Bridge from getting the go-ahead to be fixed with federal dollars.

“It’s strange to me that one of the most important bridges is the Sligo Bridge, and it was in the stimulus list to begin with until we decided to play politics with this bond bill,” she said on the Senate floor at the time.

“I can’t agree to borrow money in times like these, but I think politics are being played with this bond bill also, and I cannot vote for this,” she continued.

Beavers declined this week to elaborate for TNReport on what “politics” were being “played” on the bridge issues. The Sligo Bridge simply wasn’t applicable for the stimulus funds, she said.

According to TDOT, only state bridges in the most dire need across the state were considered to be fixed with stimulus funds. But to make the cut, the projects needed to be in a state in which work could start immediately, said chief engineer Paul Degges. Sligo Bridge was not, he said, so it was added to the list of bridges to be fixed later with borrowed money.

Beavers was one of three “no” votes in the Senate and eight in the House of Representatives.

Lynn says Beavers is contradicting herself by standing up for state sovereignty but refusing to fund bridge repairs when the federal government decides not to pay for them.

“The hypocrisy is she only voted against the budget because of stimulus funds,” said Lynn. “You can’t have it both ways.”

While Beavers’ mail pieces never mentioned the bridges, one of the postcards highlighted her voting against using the federal stimulus dollars to balance the state budget.

Although Beavers spoke in favor of Sligo Bridge repairs on the Senate floor, she declined to comment to TNReport whether she would have supported federal stimulus dollars paying for repairs to Sligo Bridge, saying it was never an option.

“It wasn’t a matter of it being in the stimulus money, because it wasn’t ready for any construction money,” she said.

Beavers’ says her upstart challenger is “twisting a vote around into something it’s not.”

“We’ve been operating on cash. She’s making an issue out of something that isn’t an issue,” said Beavers, who added that she supports funding construction on her local bridges. “She’s misrepresenting everything that she’s saying about me.”

Beavers and Lynn are bitter rivals seeking the same 17th District state Senate seat in the Republican primary election, representing Cannon, Clay, DeKalb, Macon, Smith and part of Sumner, Trousdale and Wilson Counties.

The two conservatives seemingly share more surface philosophical similarities than differences — in particular, a passion for state sovereignty under the Tenth Amendment to the U.S. Bill of Rights and rhetorical disdain for expansive government.

But they also hold a common animus for one another, the public manifestations of which have often transfixed and amused many statehouse politics watchers.

However, Gordon Borck, a third Republican candidate for Beaver’s Senate seat, doesn’t find the the Beavers-Lynn feud particularly entertaining, and says district constituents are beginning to tire of their ritual hostilities as well.

Furthermore, there’s blame enough for both lawmakers to go around, he said.

Beavers shouldn’t be solely blamed for the district’s poor bridges, which also include Hurricane and Benton McMillian bridges over the Caney Fork River and Cordell Hull Bridge over the Cumberland River.

“It would appear to me that a state representative would bare as much responsibility (for bridge repair) as our current state senator,” he said.

Borck also agrees that the state should avoid using any stimulus dollars. “How can we take the money and tell the federal government to stay out of our business?” he said.

Democrats are also floating campaign messages about bridge repairs, including Sam Hatcher whose campaign ad points out the need to fix ailing bridges while making a swipe at Beavers and Lynn.

“We have bridges to repair across our district and bridges to repair in our state Senate,” he said in his add. “Let’s stop the bickering and focus on those issues that matter most to us.”


Four Bridges in the 17th District Approved in the Bond Bill, Public Act 552, according to TDOT.

Sligo Bridge over the Caney Fork River in Dekalb County is slated to be replaced in Fiscal Year 2011/2012.

Cordell Hull Bridge over the Cumberland River in Smith County is slated to be rehabilitated in Fiscal Year 2011/2012.

Hurricane Bridge over the Caney Fork River in Smith County is scheduled to be replaced in Fiscal Year 2011/2012.

Benson-McMillian Bridge over the Caney Fork River in Dekalb County is slated to be rehabilitated in Fiscal Year 2010/2011.

Press Releases

Bredesen Launches Job Creation Plan for Marshall County

State of Tennessee Press Release, April 7, 2010:

Effort to Combat Unemployment Targets County with High Unemployment Rate

NASHVILLE – Governor Phil Bredesen today announced a plan to reduce unemployment in Marshall County by putting up to 175 people back to work using federal dollars available through the American Recovery and Reinvestment Act. Marshall County has had the state’s highest unemployment rate – 19.1 percent in February – for the past three months and includes 2,330 currently unemployed residents.

“This jobs package will put people back to work and provide some much needed assistance to these residents who are feeling the effects of this economic downturn,” said Bredesen. “One of the primary goals of the Recovery Act is to put people back to work, and I’m glad the state can bring this assistance to Marshall County residents during these tough times.”

The 175 positions include government and private sector employment opportunities that will be funded through September 2010 by Recovery Act dollars allocated to the Tennessee Department of Human Services. These positions include 50 highway maintenance worker positions within the Tennessee Department of Transportation and 125 positions that will be filled primarily by private sector companies seeking to hire additional staff.

Residents of Marshall County must meet certain income and asset requirements to be eligible for these positions. To be eligible, a family’s income cannot be greater than 133 percent of the federal poverty level ($2,030/month for a family of three; $2,444/month for a family of four), and their liquid resources cannot exceed $2,000. In addition, residents must have a child younger than 18-years old living in their household.

A job fair for Marshall County residents will be held Tuesday, April 20 at the Lewisburg Recreation Center located at 1551 Mooresville Highway from 9 a.m. until 2 p.m. Those interested in the job creation program who meet the eligibility requirements are encouraged to attend the job fair where they will have the opportunity view a list of available positions and complete an application for employment.

The Marshall County jobs package is similar to the program announced in May 2009 for Perry County, which, at the time, had the state’s highest rate of unemployment. More than 400 unemployed individuals found jobs as a result of that effort. At the Perry County announcement, Bredesen stated his desire to make this a model that could be implemented in other high unemployment counties and subsequently announced similar programs in Lauderdale and Hancock counties.

“The goal of this effort is to use Recovery Act funds to provide assistance where it’s needed most, Bredesen said. “Our state’s economy continues to suffer and thousands of Tennesseans are struggling. We’ll continue look for creative ways to assist counties with high rates of unemployment.”

Marshall County residents who need unemployment assistance can contact the Tennessee Career Center at Lewisburg, located at 980 South Ellington Parkway, or call (931) 359-9726.

Press Releases

TN Rail Projects Get $55.3 Million in Federal Recovery Grants

State of Tennessee Press Release, Feb 18, 2010

NASHVILLE – Tennessee will receive $55.3 million in federal Transportation Investment Generating Economic Recovery (TIGER) discretionary grants for two rail projects in the state. The US DOT announced $1.5 billion in federal TIGER grant funds for more than 50 projects across the U.S. on Wednesday, the one year anniversary of the American Recovery and Reinvestment Act, which funds the competitive TIGER grants.

“The Recovery Act TIGER grants awarded to Tennessee will fund needed improvements to the freight rail network in our state,” said Governor Phil Bredesen. “These improvements will expand access to freight for businesses across the state, reduce the number of trucks on Tennessee highways by moving more freight by rail, and provide a cleaner, more environmentally friendly transportation option.”

Railroads are up to eight times more fuel efficient than trucks, according to a November 2009 study by the Federal Railroad Administration. In many cases, one train can haul as much freight as nearly 300 trucks, which means a single train can take around 300 trucks off the highway, creating more capacity for motorists.

Tennessee will receive half of a $105 million grant for the Crescent Corridor Rail Initiative. The $52.5 million in federal funds will be used to construct an intermodal transfer facility in Fayette County. The Crescent Corridor is a 2,500-mile rail route operated by Norfolk Southern Corporation that extends from New Jersey to Memphis and New Orleans. Tennessee is partnering with Pennsylvania, Virginia, Alabama, and Mississippi in the Crescent Corridor Freight Initiative. Construction of the new Fayette County facility includes pad and support tracks, trailer and container parking areas, lead tracks and related ancillary buildings and features. Currently, TDOT is conducting an Environmental Assessment (EA) of the proposed intermodal facility location. The department expects to hold a public meeting and review of the EA in summer 2010.

Tennessee will also share in a $17.5 million grant for the Appalachian Regional Short Line Rail Project. The state will receive $2.8 million to rehabilitate rail lines in Stewart and Montgomery Counties and to construct a new switching terminal near Memphis. The rail lines are owned and operated by R.J. Corman Railroad Group. Short lines are smaller freight railroads that provide local businesses with a link to the national network of Class I railroads, such as CSX or Norfolk Southern. These short lines help keep local businesses competitive in the global markets. Improvements include upgrades to rail, crossties, grade crossing, bridge and tunnel work.

“Rail is an important component to Tennessee’s transportation network,” said TDOT Commissioner Gerald Nicely. “It’s important to utilize all of our transportation options when it comes to the movement of freight. These rail improvements will eventually result in more long haul freight moving by train, and will have the additional benefit of relieving congestion on our crowded interstate highway system.”

To learn more about TDOT and the American Recovery and Reinvestment Act visit For more information on the American Recovery and Reinvestment Act for the state of Tennessee, visit

Business and Economy

State Eager for More Federal Transportation Funds

Tennessee transportation officials told lawmakers this week they’re hoping the Volunteer State will get another round of federal stimulus-type money for road and highway construction projects.

“There is talk of a second, what they call a Jobs Bill,” Commissioner Gerald Nicely told a state House committee Tuesday in Nashville. “It passed the (U.S.) House in December and would be about the same size as the stimulus that passed in February of 2009.”

Tennessee’s chunk could be about $27 million for roadway projects and another $9 million for public transit initiatives and efforts, he said.

“I think we’re going to know something in the next three or four weeks whether or not it’s going to fly because the whole idea is to get jobs created just as quickly as possible,” Nicely said.

The state’s unemployment rate, which had seen declines every month from a peak of 10.8 percent in June, jumped back up to 10.9 percent in December, an increase of 0.7 percent from November.

Nicely claimed that the work-making effects of new stimulus funding would be seen almost immediately. Under the draft language of the bill, Nicely said, states would have to obligate the money to construction contracts within 90 days. Governments were given 120 days to obligate the funding after receiving last year’s stimulus money.

“That would be a challenge, but we’re prepared to do it,” Nicely added. “We’re already looking at projects.”

He said 315 projects across the state were paid from the last round of stimulus money.

Nicely added that not all of the money the state received in 2009 has been assigned to projects yet, but assured the House Transportation Committee that plans are in place to spend the remaining funds by the federal government’s March 2 deadline.

A portion of the money went to the 11 Tennessee Metropolitan Planning Organizations in the state, which handle local and regional projects in urban areas of 50,000 or more. The MPO’s have yet to obligate a little over $800,000 in stimulus funds.

If the MPO’s fail to finalize their spending priorities by the federal deadline, TDOT’s state projects will take their place to prevent the state from losing stimulus funds, said Nicely.

The areas in which the stimulus funds were spent were guided by the language in the federal bill, TDOT spokeswoman Julie Oaks said in an email.

“The Recovery Act bill encouraged the use of funds in Economically Distressed areas,” she wrote. “TDOT developed a selection criteria for projects and did look at those in ED areas, however the biggest requirement was that a project be ready to go to contract. We also worked to balance the funds across the state in every way (north/south; east/middle/west; urban/rural).”

Nicely told the committee that 72 percent of funds are going to “economically distressed” areas throughout the state where the unemployment rate is higher than the national average, or average incomes are no more than 80 percent of the national average.

“A lot of states used a great deal of this money for just basic maintenance stuff like paving,” he said. “We had a good variety…road projects, bridge projects, and we distributed it across the state.”

Tennessee Department of Labor and Workforce Development Communications Director Jeff Hentschel said it is impossible to tell exactly how many construction jobs were directly created by the stimulus funding due to the way statistics are gathered by the department.

If Congress passes the latest jobs bill, the spending of the latest round of funding would again be guided by the language in the federal bill, Oaks said.

U.S. Senate leadership announced Thursday that they think they’re close to an agreement on the bill and expect to bring the legislation to the floor next week.

Press Releases

Stimulus Money Coming for Electronic Medical Record-Keeping

Press Releases from the State of Tennessee and the U.S. Department of Health and Human Services, Jan. 4, 2010:

The Centers for Medicare & Medicaid Services have announced that Tennessee will receive federal matching funds for state planning activities necessary to implement the electronic health record incentive program established by the American Recovery and Reinvestment Act of 2009. Tennessee will receive approximately $2.7 million in federal matching funds:


In another key step to further states’ role in developing a robust U.S. health information technology (HIT) infrastructure, the Centers for Medicare & Medicaid Services announced today that Tennessee’s Medicaid program will receive federal matching funds for state planning activities necessary to implement the electronic health record (EHR) incentive program established by the American Recovery and Reinvestment Act of 2009 (Recovery Act). Tennessee will receive approximately $2.7 million in federal matching funds.

EHRs will improve the quality of health care for the citizens of Tennessee and make their care more efficient. The records make it easier for the many providers who may be treating a Medicaid patient to coordinate care. Additionally, EHRs make it easier for patients to access the information they need to make decisions about their health care.

The Recovery Act provides a 90 percent federal match for state planning activities to administer the incentive payments to Medicaid providers, to ensure their proper payments through audits and to participate in statewide efforts to promote interoperability and meaningful use of EHR technology statewide and, eventually, across the nation.

“We congratulate Tennessee for qualifying for these federal matching funds to assist its plan for implementing the Recovery Act’s EHR incentive program,” said Cindy Mann, director of the Center for Medicaid and State Operations at CMS. “Meaningful and interoperable use of EHRs in Medicaid will increase health care efficiency, reduce medical errors and improve quality-outcomes and patient satisfaction within and across the states.”

Tennessee will use its federal matching funds for planning activities that include conducting a comprehensive analysis to determine the current status of HIT activities in the state. As part of that process, Tennessee will gather information on issues such as existing barriers to its use of EHRs, provider eligibility for EHR incentive payments and the creation of a State Medicaid HIT Plan, which will define the state’s vision for its long-term HIT use.

Additional information on implementation of the Medicaid-related provisions of the Recovery Act’s EHR incentive payment program may be found (HERE).


Rural Tennessee Unemployment Continues to Soar

While it’s no secret economic times are tough this year all across the Volunteer State, job seekers living in West Tennessee are having an especially difficult time finding and keeping work, according to the latest government unemployment statistics.

As of the end of October, unemployment rates in counties from the Mississippi River to just west of Nashville hovered in the high teens, in some cases pushing 19 percent, according to recent numbers from the state Department of Labor and Workforce Development.

With the exception of Shelby, Montgomery and Dickson Counties, the unemployment rate in every county west of Nashville meets or surpasses the statewide rate of 10.5 percent. Tennessee-wide unemployment was 6.9 percent for the same period last year.

“I think that a lot of the hit that we take has been the erosion of the manufacturing base,” said state Sen. Lowe Finney, a Jackson Democrat.

Several plants have closed or announced layoffs in the past year, including Cub Cadet in Brownsville, a lawn mower plant where 480 full time and seasonal workers lost their jobs when the facility closed in July. Haywood County’s unemployment rate now checks in at 17.9 percent.

Tennessee’s unemployment rate is just above the nation’s 10.2 percent rate for October. Since then, the national numbers dropped to 10 percent in November, though state numbers are not yet available.

Lauderdale County’s unemployment rate was 18.9 percent, the highest in the state and a 4.2 percent increase from October 2008.

Henderson County ranks at 17.6 percent and Carroll County at 17.3 percent.

While each western county struggles with unemployment, those home to larger population centers are faring better, although still significantly worse than the state rates from last year. The rate in Shelby County is 10.2 percent and Madison County is 10.5 percent.

That isn’t to say times are flush for job-hunters in regions east of Nashville. Hancock County unemployment hit 18 percent and Scott County landed at 17.8 percent, and most other counties have unemployment rates in low teens or below.

While Finney said he’s encouraged by the recent drop in the national unemployment rate, he says Tennesseans ought not to expect the picture to brighten anytime soon; the state’s employment numbers tend to lag six months behind.

“If other parts of the country experience good news, hopefully that means a few months from now, Tennessee will experience the same thing,” he said.

Senate Republican Leader Mark Norris, R-Collierville, predicts it’ll take even longer than that before unemployment turns around.

A former chairman for the Council of State Governments’ Economic Development Committee for the Southern Legislative Conference, Norris says the stimulus hasn’t yet kicked in the way state officials expected, which he says means it’ll take still more time to see positive changes.

“I would say it’s probably not likely we’ll be able to see any appreciable improvement until the third quarter of 2010 at the earliest,” he said.