By Pat Nolan, Senior Vice President, DVL Public Relations & Advertising
November 14, 2008
FINANCIAL WOES CONTINUE TO IMPACT THE STATE AND METRO; INTRIQUE SHROUDS COMING CHANGES ON TENNESSEE'S CAPITOL HILL; INSIDE POLITICS LOOKS AT THE CHALLENGES OF NATIONAL TRANSITION AND CONGRESSMAN COOPER'S FUTURE
That wailing and gnashing of teeth you hear coming from Tennessee's Capitol Hill are cabinet members and other officials of the Bredesen administration trying to figure out how they are going to handle the state's financial crisis and budget meltdown which continues to worsen (as it does all across the country).
Continuing an practice that began when he became governor six years ago, Phil Bredesen is holding open-to- the-public budget hearings that you can attend or watch on live streaming video at your computer (www.tn.gov/governor). Sometimes in years past, these sessions could be pretty dull, and any complaining about cutbacks was usually more crocodile tears that anything else.
But not this year: The Governor and Finance Commissioner Dave Goetz are warning that cuts up to and exceeding 10% (except possibly for K-12 education) will likely be in order. That has to mean service cutbacks and significant employee layoffs, even if some of the state's record "rainy day" fund is used to soften the blow.
We've said it before: When the nation catches a financial cold, we in Tennessee, largely because of our consumer-based tax system, get double pneumonia. Now it appears the nation has got double pneumonia, and our state and its budget are moving into the intensive care unit.
For the first time since the Reconstruction era following the Civil War, Republicans appear poised to organize both houses of the Tennessee General Assembly come January, 2009.
Legislative members of the GOP have long complained that the state spends too much money and that our budget is growing faster than overall growth in Tennessee. Now, as full partners with Democratic Governor Bredesen, they get to put their money (or lack of it) where their mouths have been. The devil is always in the details, so expect some sparks to fly over exactly who and what gets cut come late next spring when final budget decisions are made. There could be fights even earlier if lawmakers find themselves unhappy about how the administration is handling the projected $800 million shortfall in the current year's budget.
But don't expect anyone, in either party, to talk about increasing taxes, especially an income tax, as a solution. That's just not on anyone's agenda....the memories of the last big tax and budget battles from six and seven years ago are still too fresh and raw. And besides, raising taxes in tough economic times is never a popular idea.
But here's one thing you may hear some lawmakers bring up as a somewhat "symbolic" way they can contribute to easing the state's budget crunch. The Associated Press recently reported that state lawmakers are about to get a 5% pay raise (up to $19,009) as well as an increase in their per-diem expense accounts from $161 to $171 a day. They will also see their mileage reimbursements go up from 42 cents to 54 cents a mile.
The AP article says the per diem and mileage rates are adjusted every two years to conform with standard state and federal rates (also used by many businesses). The pay increases are automatic under a 2004 law that tie any changes in lawmakers' pay to what state workers get over a two-year period. Legislators cannot receive a pay raise during their terms, so that's why the two year period is used.
So would lawmakers seek to change the law and forgo any pay or other increases as their small way of "doing their part" to help out with the state budget deficit? A few lawmakers already decline their per diem, but only a few. My guess is no, unless the media, the public and legislative leaders really get behind the idea. I asked Lt. Governor Ron Ramsey about all this recently when he was on my INSIDE POLITICS show. He said he hadn't really thought about it and he wasn't sure what could be done since the increases are pretty much automatic. But I could sense he might be also thinking about how this pending pay raise for lawmakers might look to the voters.
So we will see what, if anything happens.
For someone many had questions about as a future Speaker of the House, Republican Minority Leader Jason Munpower is showing some real political skills since Election Night.
First, he managed to maneuver Nashville Representative and former State Party Chair Beth Harwell out of the race. Then he got all 50 GOP members of the House to sign a letter saying they are committed to vote for a Republican for Speaker and Speaker Pro-Tem when the legislative organizational session is held in January.
It's true that commitment might not stop a renegade Republican from still opposing Mumpower and that effort could even help long-time Democratic House Speaker Jimmy Naifeh to find a way to somehow hold on to his position.
But the anger in the Republican Party statewide if that happened would be overwhelming, and pity the poor house members who vote outside the party line (against the GOP caucus nominee who is likely to be Mumpower) for Speaker.
If you don't believe it, ask former Democratic State Senator Rosalind Kurita, who broke party ranks two years ago to elect Ron Ramsey, Lt. Governor. Many Democrats never forgave her, and you better believe that that played a major role in her losing her Senate seat earlier this month. Or ask former Republican Senator Mike Williams, whose relationship with Lt. Governor Ramsey and others in the GOP got so bad he bolted the party last year, and became an Independent. Williams also had been a key vote to keep former Democratic Lt. Governor John Wilder in place for years. All those factors together played a major role in Williams too losing his seat in the recent election.
Do any GOP House members really want to face a similar fate if they don't support the GOP nominee for Speaker of the House, or Speaker Pro Tem for that matter? But that's also the continuing challenge Mumpower and the Republicans will face, on both leadership choices and in trying to pass legislation, when they hold only a narrow one-seat majority in the lower Chamber (50-49).
The State GOP is still trying to figure exactly how to handle electing the state's constitutional officers for the first time in modern history.
Some reports in the media (NASHVILLEPOST.com) say applicants for the jobs can sign up on a web site. While clearly that will give the appearance of an open, non-partisan selection progress, don't hold your breath that anyone other than a well-connected, long-standing Republican will get these jobs. And candidates expressing interest or being rumored to have interest continue to come out of the woodwork.
That would include, again according to NASHVILLEPOST's Ken Whitehouse, outgoing FCC Commissioner Deb Tate, current Tennessee Regulatory Chair and former Republican House Leader Tre Hargett, along with former State Revenue Commissioner Ruth Johnson and former Deputy Governor Justin Wilson.
One person you can scratch from consideration is Rosalind Kurita. Her name was mentioned for Secretary of State (perhaps as a consolation prize after GOP leaders have apparently decided not to challenge seating her successor, Tim Barnes). But now, after strong opposition from GOP House members and others about giving any plum jobs to current or former Democrats (see I told you), that idea is being dropped, leaving Kurita apparently without a way to get back to the Hill next year.
Whoever gets these posts is likely to face a dilemma of their own. The hundreds of employees they have all serve in non-civil service posts. There will be lots of Republicans job seekers looking to take their places. On the one hand the state's budget problems will give these new office holders a great chance to "clean house" if they want to in these "patronage-type" jobs. But how many new folks can be hired if budget problems continue? And since Democrats have controlled these jobs and divisions of state government since almost forever, how will it look to have long-serving, competent state employee put on the street, when people feel especially sorry for anyone losing their jobs during these tough economic times?
Nashville's government is also struggling with how to deal with the national and worldwide economic meltdown that's been underway the past couple of months. In fact, it is considering, for the first time ever, borrowing money from another city (The Clarksville Public Building Authority) to finance part of the remaining debt on LP Field (about $59 million).
It is having to do this because the previous financing included a variable interest rate which, when the economic crunch hit worldwide, caused a German bank to have its rating downgraded and that is forcing Metro into terms on the existing loan that aren't very good.
Chances are that Metro Finance Director Rich Riebeling can convince Metro Council members that this is an acceptable way to handle this matter (other cities in Tennessee make loans among themselves all the time with the help of the Tennessee Municipal League). But the move is causing some raised eyebrows in the Council and the Council staff analysis warns about the new financing: it is "very unusual for Metro to have a variable interest rate on its bonds determined by agents, or trustees, that have no...relationship with Metro." (i.e. in the past Metro has always done that itself).
It may be this debate will also, finally, make the Council more curious about the city's overall health in terms of its capital budget. Mayor Dean's capital budget plan has been delayed for months now, in part because of the credit crunch and the uncertainty of the capital markets. But that's not all of it. Frankly, the Dean administration found when it came into office last year, that the city was somewhat overextended on capital projects, that it had approved more projects than it has debt service monies to pay.
That's why quietly (and without much questioning from the Council or the media) the Dean administration has mothballed some approved projects which had yet to get started and some already either in the planning or early construction phases.
Now the Mayor is likely to have some of his own projects he wants to fund (the new forensics lab for police comes to mind), so how to do that and what to do about the other pending projects still on hold, has complicated matters, as has the administration's extreme reluctance to blame any of this on the previous Purcell administration and the last Metro Council.
But the problems are real and need to be disclosed and fully discussed. And now may just be the time that begins to happen.
Meantime, like the state, some of the perks for Metro Council members are back under the microscope during these tough economic times. About half the Council (20 members), and a few staff members have gone to Orlando, FL to attend this year's League of Cities national convention according to THE TENNESSEAN (11/14). At least one councilman is taking exception to the cost of the trip ($20,000), while others believe those attending can learn quite about ideas and practices that other cities have that can be helpful when they return to Nashville.
While the paper played the story big on the front page, it is an old chestnut of a controversy when it comes to Metro government. The paper has written this story many times over years, in good economic times and bad ones.
That doesn't make the questions raised about attending the convention any less valid, but it does put it in some perspective. Full disclosure: In the two years, I worked for Mayor Fulton I attended two NLC conventions in Seattle and San Antonio. I have found them very helpful and a lot of fun too. THE TENNESSEAN used to staff the trip as well, including, once upon a long time ago, a young reporter named Al Gore. He not only attended, he took part in a long standing Council tradition in those days at the NLC Convention, playing in a fairly serious poker game. Nobody in the Council thought much of it, until Gore went back to Nashville and wrote a Sunday column about it. Yikes!
With transition the theme throughout our politics today, especially on a national and state level, we devote this weekend's INSIDE POLITICS show to that topic.
Nashville Congressman Jim Cooper is our guest and, of course, we will discuss with him whether he is facing his own transition in the next few months, from the halls of Congress to a cabinet position in the new Obama administration? Cooper keeps showing up on all the short lists for positions like Director of the Office of Management and Budget, which would seem to be a perfect position for this budget-hawk (who was an early and strong supporter of Obama) to serve if he is interested. So is he? Watch and see.
Our other guest is former CBS News correspondent David Andelman. From his time overseas and his other journalistic experience as editor of Forbes.com, and with THE NEW YORK TIMES, CNBC and now as Editor of the World Policy Journal, he has some keen insights to share on the difficulties and challenges on both the domestic and foreign fronts we face during this time of transitional politics.
INSIDE POLITICS can been seen several times each weekend on the NEWSCHANNEL Network.
Friday, November 14...........7:00 PM, NEWSCHANNEL5 PLUS, Comcast Channel 50
Saturday, November 15.......5:00 AM, NEWSCHANNEL5 PLUS
Saturday, November 15........5:30 PM, NEWSCHANNEL5 PLUS
Sunday, November 16............5:00 AM, WTVF-TV, NewsChannel5
Sunday, November 16.............5:00 AM, NEWSCHANNEL5 PLUS
Sunday, November 16..............12:30 PM, NEWSCHANNEL5 PLUS
Please join us. And remember, if you live outside the Nashville media market or don't have COMCAST service, you can find excerpts from previous INSIDE POLITICS shows here at Newschannel5.com.