Budget discussions heated up this week as lawmakers rolled up their sleeves and continued to work on reaching a consensus on a proposal, with some in House leadership standing firm against any tax increases. The leadership previously denounced the Governor's plan to implement an additional $85 million tax on single article sales as a way to balance the budget. This tax proposal was in addition to $50 million the administration called for by increasing taxes on cable television, cable boxes, business telephone services, and free hotel breakfasts. In total, Bredesen has proposed over $130 million in new taxes this year alone.

Opponents of the taxes have maintained, throughout budget discussions, that raising taxes on economic- weary Tennesseans would be irresponsible. Their plan calls for significant reductions to discretionary spending, no tax increases, and leaving the Rainy Day Fund at roughly $500 million. Tax proponents, on the other hand, have proposed further depleting the Rainy Day Fund and a myriad of increased spending on various projects, funding them with proposed tax increases.

Some of the additional projects being discussed include $16 million for a fish hatchery, $4 million for demolition work at the UT Health Sciences Center, and $5 million for the National Civil Rights Museum.

Lawmakers will continue to hammer out details next week, as the General Assembly is constitutionally required to pass a balanced budget each year. Each General Assembly is allowed to meet for 90 session- or legislative-days over the course of two years. After session last Monday, the House has only four legislative days left to finish business. The Senate has only two legislative days remaining.

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The House was successful Monday evening in passing landmark ignition interlock legislation through the State House of Representatives. House Bill 2768, co-sponsored by Representative Evans, will require certain DUI offenders to use an ignition interlock system, in which users must 'blow' below a certain blood alcohol content (BAC) level to turn on their vehicle. Lawmakers have carried some form of the legislation for several years, and worked particularly hard this year in securing passage.

Members contended that the legislation was needed to curb the number of repeat drunk drivers on Tennessee roads. Forty-eight other states have some form of ignition interlock, but Tennessee is only the fourteenth to impose mandatory use of the device on first time offenders.

Specifically, the bill requires anyone convicted of a DUI with a blood alcohol content (BAC) level of .15 or higher to use the ignition interlock device (IID). The sponsor also stated that the bill addresses a DUI from arrest to treatment to release.

Having already passed unanimously in the Senate, the bill is now headed to the Governor for his signature.

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The House Calendar and Rules Committee, which is responsible for setting the House floor agendas, considered House Bill 2622 this week. House Bill 2622 prohibits the legislature from requiring any person to participate in any health care system or plan. Opponents attempted to refer the bill back to the House Health and Human Resources Committee essentially killing for it the year, but the proponents of the bill prevailed and it remained in Calendar and Rules.

After a lengthy discussion, the legislation was deferred until the next Calendar and Rules Committee meeting. House members have fought all year to enact legislation to counter the federal health care takeover, believing that expanding government programs is rarely an effective solution to complex issues. Further, proponents have argued the federal government's takeover of healthcare will only prove to balloon the cost of healthcare services to the states.

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The House successfully passed an ethics measure Monday that would require any member of the legislature to forfeit state health insurance benefits if convicted of a felony offense related to their elected office. The law would not apply retroactively or to family members who might be covered.

Legislative leaders filed and supported this legislation despite hitting roadblocks in subcommittees. House Bill 2349 was approved by the full House this week with only 4 no votes. Having passed the Senate earlier this month unanimously, the bill is now awaiting the Governor's signature.

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Tennessee revenue collections improved in April with a net positive growth of 2.23% over April collections one year ago. Finance and Administration Commissioner Dave Goetz reported today that overall April revenues were $1,243.0 million, which is $43.4 million more than the state budgeted.

"April is the first positive sales tax growth month in almost two years - since May of 2008," Goetz said. "Sales tax collections started their downward spiral starting in January of that year and, beginning with the month of June, recorded an unprecedented 22 consecutive months of negative collections."

On an accrual basis, April is the ninth month in the 2009-2010 fiscal year.

The general fund was over collected by $51.4 million, and the four other funds were under collected by $8.0 million.

Sales tax collections were $9.7 million more than the budgeted estimate for April. The April growth rate was positive 5.62%. For nine months revenues are under collected by $201.8 million. The year-to-date growth rate for nine months was negative 4.11%.

Franchise and excise taxes combined were $47.6 million above the budgeted estimate of $312.9 million. For nine months revenues are over collected by $63.4 million.

Hall Income tax collections for April were $13.8 million less than the budgeted estimate. For nine months collections are $14.2 million less than the budgeted estimate. The growth rate for the nine month period was negative 22.42%.

Inheritance and estate tax collections were $1.4 million below the April estimate. For nine months collections are $9.4 million under the budgeted estimate.

Gasoline and motor fuel collections for April decreased by 2.80%. For nine months revenues are negative 0.15%, and $16.5 million below the budgeted estimate of $620.0 million.

Tobacco tax collections were $2.6 million under the budgeted estimate of $24.4 million. For nine months revenues are under collected in the amount of $1.0 million.

All other taxes for April, including the tobacco tax, were over collected by a net of $3.9 million.

Year-to-date collections for nine months were $200.7 million less than the budgeted estimate. The general fund was under collected by $153.6 million and the four other funds were under collected by $47.1 million.

The budgeted revenue estimates for 2009-2010 are based on the State Funding Board's consensus recommendation adopted by the first session of the 106th General Assembly in May of 2009, and are available on the state's Web site at http:/ /www.tn.gov/finance/bud/budget.html.

The State Funding board met on December 18, 2009 and adopted mid-year revised revenue ranges for 2009-2010. The revised ranges reflect growth rates ranging from negative 1.50% to negative 0.25% in total taxes, and negative 2.35% to negative 0.85% in general fund taxes. Based on the consensus recommendation, the official budgeted estimates for 2009-2010 were revised in late December.

The revised estimates are reflected on pages A-70 and A-72 in the 2010-2011 Budget Document and assume an under collection in total taxes in the amount of $161.3 million, and an under collection of $153.2 million in the general fund.

The funding board met again in March of this year and adopted final revenue ranges for 2009-2010. The board's consensus recommendation was to recognize lower growth rates than those adopted on December 18, 2009. The revised ranges reflect growth rates ranging from negative 1.77% to negative 1.29% for total taxes, and negative 2.31% to negative 1.78% in general fund taxes.

Based upon the funding board's March recommendation the revised estimates for 2009-2010 now assume an under collection in total taxes in the amount of $258.9 million, and an under collection of $231.0 million in general fund taxes.

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In light of the historic flooding throughout the state, the Tennessee Motor Vehicle Commission is encouraging consumers to exercise caution when buying used cars. The warning is the second issued by the state in recent weeks, with the Department of Commerce and Insurance encouraging flood victims to be cautious when hiring contractors. Unfortunately, scam artists may use this time to fleece unsuspecting consumers.

Flooding can cause damage to a vehicle's computer and electrical systems, as well as potentially causing brakes and airbag systems to malfunction. The Tennessee Motor Vehicle Commission advises consumers to only buy from dealers that hold a Motor Vehicle Dealers License issued by the Commission. To search for a license, visit http://verify.tn.gov.

If you are thinking about buying a used car, follow these tips to avoid buying a car with flood damage:

• Examine the car yourself. Check throughout the car, including under the seats for signs of mud or rust. Examine the carpeting to see if it is discolored or faded. If the carpeting is mismatched, it may be a sign that components have been replaced. Check for a mildew smell.
• Test-drive the car on hills, highways and in stop- and-go traffic. Make sure all warning lights and gauges work properly. Test lights, wipers, turn signals, radio, heat and air conditioning several times to make sure they work properly.
• Ask for the car's maintenance record.
• Have the car inspected by a reputable mechanic.
• Buy only from a reputable dealer. Ask the dealer if the vehicle is flood damaged and get the answer in writing at the time of the sale.

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• Residents in Robertson County may apply for FEMA assistance by registering online at www.fema.gov or by calling 1-800-621-FEMA. Individual assistance can include grants to help pay for temporary housing, home repairs and other serious disaster-related expenses. Public assistance is also available to state and eligible local governments and certain non-profit organizations on cost-sharing basis for debris removal and emergency protective measures.
• House Bill 2665 was passed unanimously by the House last Monday and will create a veterans' honor medal program to recognize and honor all Tennessee veterans. Having already passed the Senate, the proposal is now on its way to the Governor for his signature.
• Lawmakers discussed at length on Thursday an amendment that would restrict the use of traffic cameras. A study committee formed last year regarding the issue and met over the summer of 2009. The proposal put forward by the study committee was ultimately rejected by the General Assembly. The amendment adopted Thursday prohibits local governments from installing traffic cameras after January 1, 2011 unless adopted by ordinance or resolution. The bill lawmakers to which lawmakers attached the amendment was then deferred until Monday.
• Senate Bill 440, passed by the House Monday night, would require felons who have had their voting rights revoked pay all court costs and any restitution owed in full in order to have their voting rights restored.
• Legislation that could potentially save local governments across the state money passed on the House floor Monday night. House Bill 2552 clarifies the law on the purchase of used or secondhand items purchased by local government. As the law is currently written, local governments could not purchase equipment that is more than 10 percent above market value, or 10 percent below. The bill clarifies that there is no floor on how much a local government may pay (meaning no threshold on the amount of savings) and changes the ceiling to 5 percent above market value.
• A bill that would ban law enforcement from enacting ticket quotas is headed to the Governor for his signature. House Bill 2952 "may not establish or maintain, formally or informally, a plan to evaluate, promote, compensate, or discipline a law enforcement officer solely by the issuance of a predetermined or specified number of any type or combination of types of traffic citations."
• For the first time in 22 months, state revenues for the month of April came in $43.4 million above projections. Year-to-date collections are still down, to the tune of approximately $201.8 million for the first 9 months of the fiscal year which is 4.11 percent below projections.

In light of the historic flooding that has devastated parts of Tennessee, the Department of Commerce and Insurance (TDCI) this week encouraged homeowners to verify the licensure of contractors they hire to repair their homes by using http://verify.tn.gov.

The department stressed the importance of residents not falling prey to fraud artists posing as a legitimate, licensed home contractors. Taking the time to make sure someone is licensed with the state is a fundamental first step when selecting a contractor to work on a home.

The TDCI also said that when selecting a contractor, it is also important to:

• Get several bids. It's best to get at least three bids and check references.
• Get a written contract that includes the company's name, address and telephone number. The contract should also include an anticipated start and completion date.
• Get a written contract that includes the company's name, address and telephone number. The contract should also include an anticipated start and completion date.
• Never pay more than 1/3 down and do not let the payments get ahead of the work.
• Ask for proof of general liability insurance.
• Make sure the contractor obtains the local permits for inspections.

Tennesseans can also check the Department's monthly Disciplinary Action Reports to see if contractors have engaged in unlicensed activity or have incurred administrative action taken against them by the Department. Licensing for contractors also carries parameters that govern the types of jobs different licensees are permitted to perform.

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Thursday, May 27, 2010
House Session - 9:00 a.m. - House Chambers

207 War Memorial Building
Nashville, TN 37243

rep.joshua.evans@capitol.tn.gov

Phone: 615.741.2860

513 Memorial Blvd, #312
Springfield, TN 37172

joshua@repjoshuaevans.com

Phone: 615.948.1376