22

Feb 2017

Nashville Tax Abatements

The Metro Nashville Council Meeting last night was one for the history books, and while I have a great deal to say about the Council’s response to the mourners and protestors of Jocques Clemmons’ death, first I want to address some other Council proceedings which spoke to what may seem like an unrelated but what is actually a tangential issue in Nashville.

Passed on second reading was Ordinance No. BL2017-589, an ordinance designed to grant Gaylord Opryland Resort & Convention Center a tax abatement package for developing a new water park complex for the use of guests of the Opryland Hotel. The package has several elements:

  • property taxes would remain at a flat rate through 2025, representing a projected $1.63 annual loss in Metro revenue valued at a total of at least $13.8 million for the tax abatement (this value is likely to fluctuate based on future land appraisals).
  • 6 year extension of $1M in annual hotel-tax rebates that Ryman received from Metro after the 2010 flood, to 2031.
  • Ryman would donate two parcels of land to Metro for the purpose of developing public boat access to the Cumberland River

In addition to the boat access, and what some Council members hope to develop into an Opryland Greenway connector to the Cumberland River Pedestrian Bridge, supporters of the tax abatement claim the following benefits to Metro:

  • an increase of $185M annual economic impact in addition to Gaylord’s current annual economic impact of $866.5M
  • an additional $4.6M annual revenue in state and local taxes

Those familiar with Nashville development are well aware that tax abatements are common in the city. Councilman Jim Shulman questioned whether Metro had ever studied whether the benefits of these tax abatements had ever come to fruition. It was stated that Metro Finance was in the process of performing such a public study, and that so far the results were positive that tax abatements work in producing job growth. It is reasonable to suppose that the water park will provide a number of low wage jobs for Nashvillians in addition to the aforementioned benefits.

Ultimately Shulman, along with Councilors John Cooper and Colby Sledge, chose not to vote for the ordinance for a number of stated reasons, not the least of which being the city’s residents are about to see a property tax increase due to reappraisal, and therefore a tax abatement to one of Nashville’s wealthiest landowners is going to be a hard sell to their constituents.

The Councilmen pointed out that this tax abatement is for a water park that the citizens of Nashville won’t be able to use, since unlike Nashville Shores it is part of a private hotel. Gaylord already responded to a request for one or two public days at their Soundwaves water park as “very impractical and very difficult.”

Councilwoman Nancy VanReese, who is a proponent of the tax abatement, scoffed at the claim that the water park wouldn’t be open to Nashvillians. She pointed out that Nashville is a great place to “staycation,” and that of course Nashvillians are free to stay at the hotel and use the water park. This was an extraordinary claim coming from the representative of District 8. Here are some facts about District 8:

  • per capita income of between $20,000.00 to $24,999.99 annually as of 2014
  • adults in one half of the area are experiencing a higher than TN average poverty rate, with one tract experiencing an over 25% poverty rate
  • the poverty rate for children in District 8 ranges between 25-34.9%
  • the median home value is between $124,999.01 to $149,999.00, on the low end for Nashville, with a mortgage cost burden of over 30 to 35% of the homeowner’s income, on the highest end for Nashville. Renters are even worse off, with residents in the majority of the District paying 55% and up of their income on rent, the highest rate in the county.
  • in the most well-off tracts in the District, which occupy a smaller area, 10 to 14.9% do not possess a high school education. That percentage ranges as high as 44.1% in the rest of the District.
  • around 11% unemployment

Councilwoman VanReese’s insistence that a water park, accessible at a hotel rate of upwards $200 per night, is even remotely accessible for her constituents is ridiculous. This would be a “staycation” option for only the wealthiest of Nashvillians, whom she does not represent. VanReese could legitimately make the argument that the water park might provide her constituents with much-needed employment, or that “a rising tide raises all boats.” However, it’s disheartening that a representative who should – judging by the composition of her District – be near the forefront of combating poverty issues in Nashville, still thinks it’s appropriate to claim Nashvillians are able to pay $200 per night for recreation.

One of the more important statements made during the twenty minute public comments period at the end of the meeting by the family of Jocques Clemmons and their supporters was a gentleman who pointed out that many in our community have been “torn up by old Nashville.” Their communities have problems, and they need help, and members of the Council are in a position of power to provide some of that help. Poverty breeds crime, and crime feeds a perception (by the police in particular), that citizens are a hazard who must be controlled instead of valued neighbors who should be served and protected. The idea that Metro government isn’t significantly responsible for the development of this poverty and crime blatantly ignores the facts of our local government’s history of ignoring, when they weren’t outright destroying, these areas for the gain of others. Nashville created this problem, and now Nashville, together, must solve it.

Poverty and crime and the racism that often go with them may seem like entrenched, insurmountable issues which can never get better, but they are not. Other local governments, for example Utah and Chattanooga, have faced issues like chronic or veteran homelessness and effectively solved them. Significant progress can be made, and plans already exist for most of the challenges we face, but we must have the political will to enact those plans and allocate the necessary resources. When the Metro government is more concerned with handing out tax abatements to profitable corporations than extending a hand up to its most vulnerable citizens, it’s no wonder that our poverty rate keeps growing, our income disparity keeps widening, and people who have lived here for generations keep getting priced out of the county.

Personally, I am not against the water park or even necessarily the tax abatement for it, because I think that Nashvillians will receive a net gain in exchange for the property tax revenue loss. I grew up riding the Grizzly River Rampage, and there are few Nashvillians who don’t remember the old theme park with some nostalgia, so a new water park sounds nice even if I might not be able to afford it. However, I would like to see our Council representatives demonstrate a better appreciation for the actual economic circumstances of their citizens, and what our priorities in public spending actually mean in terms of the priorization of their interests.

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22

Feb 2017

Protestors and Representatives

At the very end of the 1970 film “Tora! Tora! Tora!” which dramatized the Japanese bombing of Pearl Harbor (the event which brought the United States into WWII), the Japanese Admiral Isoroku Yamamoto played by actor So Yamamura utters the famous line, “I fear all we have done is to awaken a sleeping giant and fill him with a terrible resolve.” The same words might be said of the 2016 election and the American public, who instead of marching off to a world war against fascism, are now marching, demonstrating, and protesting against its rise at home in unprecedented numbers.

Tennesseans, being America’s Volunteers, have not stayed home, but have joined this movement taking place all across the country by marching, protesting, engaging at Congressional town hall meetings, gathering and protesting at the legislature, and even demanding to be heard in local Council meetings. These protests have received a wide range of reactions from public officials. Elected representatives such as Senator Jeff Yarbro have often been encouraging of these citizens becoming more active in their local government, whereas representatives such as Senator Mae Beavers have been notably hostile.

Senator Beavers has gone so far as to cite Article II, Section 14 of the Tennessee Constitution which states, “Each House may punish, by imprisonment, during its session, any person not a member, who shall be guilty of disrespect to the House, by any disorderly or any contemptuous behavior in its presence.” Of course when this Section was penned by my ancestor in the winter of 1796, the 1st General Assembly planned to meet in the relatively untamed frontier town at Knoxville where the only form of security was a man to keep the door. As much as Senator Beavers may like to throw protestors at the legislature into solitary confinement and lose the key, this Section of our State Constitution does not, in fact, give her – or any of our other elected representatives – the right to do so. The legal basis for this conclusion is delivered quite well in Kovach v. Maddux, 238 F. Supp. 835 (M.D.Tenn. 1965), a landmark case on press freedom that has some applicability to how much the Tennessee Senate can reasonably limit its business before the public. Not least among the arguments the Court cites are the 1st Amendment to the US Constitution, which is supreme, and which is also reiterated in Article I, Section 19 of our state constitution, as well as Section 23, which states, “That the citizens have a right, in a peaceable manner, to assemble together for their common good, to instruct their representatives, and to apply to those invested with the powers of government for redress of grievances, or other proper purposes, by address of remonstrance.”

Beyond her clear ignorance of Tennessee constitutional law as it relates to her role in the Senate, Senator Beavers’ refusal to meet with protestors because “they are not her constituents” is as wrong-headed as it is troubling. If Senator Beavers limited herself to merely voting on legislation in her proper role as the Senate representative of her constituents, or only filed legislation which affected the lives of people within her own District, she would be correct in assuming that she is not duty-bound to receive instructions from any other Tennessee citizens. Unfortunately, Senator Beavers does not limit her legislative activities in either of these two ways, and she must therefore keep her door open (as would be implied by Article II, Section 22) to receive instruction from whomsoever her proposed legislation may affect.

Contrasted with these threats of imprisonment, is the response by the Nashville Metropolitan Council last night to a noisy protest at the start of its proceedings over the shooting death of Jocques Clemmons by Metro Nashville Police Department officer Joshua Lippert during a traffic stop near his home. A TBI investigation of the shooting is ongoing, in addition to related hearings on a report of the dangers of “Driving While Black” in Nashville. Vice Mayor David Briley typically enforces strict adherence to proper parliamentary procedure in Council meetings, and does not tolerate interruptions that are out of order. However, the protestors stood their ground, and ultimately their cause was one with which the Council sympathized, so a compromise was made that the protestors would allow the Council business to proceed uninterrupted in exchange for a twenty minute comment period at the end of the meeting. Personally, I was surprised that such a hearing was not scheduled by the Council in advance given the obvious public interest, but better late than never.

It should be noted that a photo surfaced of a considerable number of Metro police officers waiting in the hallway outside the Council chamber with zip ties ready to “clear the chamber.” The protestors were informed they would not be arrested, but they would be removed, before the Council and the protestors reached an agreement to extend the meeting for comments instead. Many of those watching these proceedings were extraordinarily relieved to not see that happen. David Plazas at the Tennessean recently claimed that Nashville has a history of resolving its racial issues peacefully, which became the object of appropriate scorn for its lack of understanding of Nashville history and in particular its Civil Rights protests. Perhaps we have a little less reason to scoff at this mythos of a peaceful, diverse Nashville after last night, when the Council came very close to writing another ugly chapter in our story but instead chose to turn it into a step toward healing.

One of the demands of the protestors which was reiterated time and time again during the comments was for the creation of a MNPD civilian review board. This is an entity which exists in a variety of forms in many jurisdictions across the country, and is designed to give citizens a place to submit complaints about police conduct and feel reasonably certain that those complaints will be properly handled. Considering how often police interact with the public, and how it is often under heightened circumstances which could result in bad situations and very hard feelings, it seems reasonable that local governments would create a means for citizens to give feedback and receive satisfaction when those interactions go extraordinarily sour. Creating a peaceful dialogue between the community and the police often helps serve to improve the police relationship with that community, which not only makes them safer in their police work but also more effective.

When I have a dispute about my taxes, or my water or garbage service, or really any other service provided by Metro, there is usually a place where I may complain and resolve my issue. This isn’t true of my interactions with the police, who also happen to have an above-average ability to cause trouble for people who complain about their actions directly to the police department. It makes sense that Metro would want to create a forum wherein aggrieved citizens may voice their concerns about police conduct, since at the very least it would eliminate some of the necessity of noisily interrupting Council meetings with a protest just to feel heard by the city’s elected representatives. The Tennessean may claim that Nashville prefers to resolve these issues peacefully, and the Council may wish to observe proper procedure during its meetings, but until we create a forum for citizens to bring their legitimate grievances against the police, we are not really listening to them nor serving the people from whom all just power is derived.

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18

Jan 2017

Unnecessarily Broad Bills

Representative Dan Howell filed HB0074, a Bill which purports to remove an “obsolete” reporting requirement for the Commissioner of the Department of Environment and Conservation. Before analyzing the merits of the Bill, it’s worth examining a procedural problem that plagues our General Assembly. This Bill is filed very broadly, opening up all of Title 4 (State Government), all of Title 11 (Natural Areas), and all of Title 64 (Regional Authorities). Particularly when a Bill changes a very specific part of a statute, it is better to cite the Title, Chapter, and Part the Bill is amending, not only to help citizens identify the change the lawmaker is proposing, but also in order to prevent ill-conceived or even dishonest legislation. Sometimes, most especially when legislation proposes a broad, sweeping change, it is necessary to open up an entire Title and Chapter, or several Titles when the subject matter is spread out across the Tennessee Code.

Sometimes legislators will file unnecessarily broad Bills merely out of laziness or ignorance. It’s easier to open up an entire Title than to be specific, and it allows them wiggle room in case they get it wrong and must amend some other Chapter or Part. It is, more often than not, an indication that the legislator in question has not done their homework on the legal implications of the Bill and is filing legislation sloppily and without adequate consideration of the consequences.

However, there are other, more shady reasons for filing unnecessarily broad Bills, ones which citizens need to be saavy to in order to prevent their legislators from sneaking in laws they would not approve of. For example, legislators will sometimes file “placeholder” Bills which opens up the Title(s) they are planning to change. These Bills as originally introduced often purport to do one thing, from ridiculously controversial to barely notable at all, but then the Bill is amended during the business of the legislature to do something entirely different. In the case of highly controversial Bills, they are often filed in order to force a “compromise” that is actually what the legislator wanted in the first place. That is a tried and true negotiation tactic, though, and usually citizens can see it coming.

Another tactic is to file one’s Bills broadly so as the Session goes forward, the legislator can offer amendments on their own legislation to other representatives who decide they want to change some law, but without all the fuss and bother of filing another Bill on the matter. It’s relatively easy for citizens to go to the General Assembly’s website and look at all the Bills filed under subjects they’re interested in such as Education, but it’s more difficult to track what changes are being made by amendments to other Bills which may start out with a particular intent but morph into something else entirely. Some Titles contain laws which affect subjects one would expect to be under a different heading. When the legislature cut Tax Relief for disabled veterans in half, for example, the Bill was filed under Taxation not Veterans. If you are someone keeping an eye on laws the legislature is writing pertaining to veterans, you could have easily missed it, and a lot of taxpayers did.

This is why it’s important for those watching the legislature to, 1) note broadly-filed Bills when they are filed, 2) note which Titles they open up, and 3) keep an eye on the amendments attached to them as the Session moves forward. Often controversial amendments are pushed through the legislature very quickly, and citizens don’t have much time to notice the Bill and contact their representatives to either protest or express support of its passage. This is, of course, intended. Despite what politicians will tell you during an election year or when they’re fundraising, they prefer to be left alone to do what they want instead of being held accountable by the citizens who put them in their office.

So let’s look at a list of Bills so far which have been filed broadly, and in many cases, unnecessarily broadly:

  • HB0001/SB0039 by Rep. Goins and Sen. Southerland, opens up Title 39 (Criminal Offenses)
  • SB0006 by Sen. Green, opens up Title 39 (Criminal Offenses) and Title 40 (Criminal Procedure)
  • HB0044/SB0113 by Rep. Windle and Sen. Bailey, opens up Title 38 (Prevention and Detection of Crime)
  • HB0048 by Rep. Clemmons, opens up Title 39 (Criminal Offenses)
  • SB0011 by Sen. Green, opens up Title 22 (Juries and Jurors)
  • HB0062 by Rep. Curtis Johnson, opens up Title 22 (Juries and Jurors)
  • SB0014 by Sen. Green, opens up Title 49 (Education)
  • HB0068/SB0046 by Rep. Smith and Sen. Massey, opens up Title 49 (Education)
  • SB0052 by Sen. Dickerson, opens up Title 49 (Education)
  • HB0022, HB0063 and HB0064 by Rep. Harry Brooks, all of which open up Title 49 (Education)
  • HB0051/SB0133 by Rep. Matheny and Sen. Bowling, opens up Title 56 (Insurance)
  • HB0018/SB0051 by Rep. Williams and Sen. Dickerson, opens up Title 56 (Insurance)
  • HB0030 by Rep. Lollar, opens up Title 62 (Professions, Businesses, and Trades)
  • SB0026 by Sen. John Stevens, opens up Title 45 (Banks and Financial Institutions)
  • HB0043 by Rep. Butt, opens up Title 71 (Welfare)

It probably goes without saying that our state laws pertaining to criminal justice, education, insurance, professions, banking, and welfare have a great deal of consequence in the day to day lives of Tennesseans. When I see Bills whose purpose could have been filed much more specifically, opening up entire Titles in these areas, it worries me that our legislators are trying to sneak through unpopular laws later in the Session by using amendments they hope no one will notice in time. At best, it worries me that the legislator filing the Bill hasn’t given the issue proper due diligence befitting a serious issue before our General Assembly. This does not inspire confidence that his or her idea has any real merit. Our legislators are as capable of having knee-jerk reactions and bad ideas as the rest of us; the difference is that they have the power to make them into laws which affect our daily lives. I would hope they would take that responsibility very seriously.

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18

Jan 2017

Reports to Property Owners on Scenic Rivers

Representative Dan Howell filed HB0074, a Bill which purports to remove an “obsolete” reporting requirement for the Commissioner of the Department of Environment and Conservation to cooperate, educate, and inform owners of property located near a scenic river. Howell represents District 22, whose border consists of a significant portion of the headwaters of the Tennessee River. However, the specific law he is changing pertains to the Duck River, which flows through seven Middle Tennessee counties, far away from Rep. Howell’s District in East Tennessee. The Duck is the longest river located entirely within Tennessee and is the most biologically diverse river in North America. Those familiar with its course can attest to the natural beauty found along its banks and falls.

In 1998 Tennessee became the second state to establish a river conservation program with the Tennessee Scenic Rivers Act. Although Wisconsin was first, Tennessee’s program was far more comprehensive, being based on the National Wild and Scenic Rivers Act and funded by the federal Land and Water Conservation Fund. The law garnered local support from Liane and William Russell of Oak Ridge, Bob Miller and other founders of the Tennessee Scenic Rivers Association, the Tennessee Citizens for Wilderness Planning, Representative Bill Pope and Governors Buford Ellington and Winfield Dunn. Unfortunately, opposition soon formed among many of the landowners whose property was adjacent to these designated scenic rivers, in the time-honored tradition of Americans being opposed to the government meddling with their property. The state and federal planners soon learned that they needed to build more local support through better communication with the immediate neighbors of our rivers, in order for their conservation to truly be successful. Eventually this effort led to a great deal of success, as the numerous local river protection projects that now exist can attest. The State and federal programs now provide funding, support, and management for the conservation of our scenic rivers, a resource valued and enjoyed by all Tennesseans and tourists lucky enough to experience it.

Despite opening up three different Titles of the State Code, Howell’s Bill as filed deletes the current law at Tenn. Code Ann. 11-13-108(b)(2). Paragraphs (a) establishes the rules for determining the boundaries of a river or segment of river that is included in the state scenic rivers program, whereas paragraph (b)(1) creates a program of cooperative effort between the Commissioner of Environment and Conservation and local landowners, at the time the Duck River was designated a scenic river, notably requiring the Commissioner to obtain notarized consent from private landowners before establishing the boundaries. (b)(2) required the Commissioner to issue a report to the Senate Energy & Environment Committee and House Conservation & Environment Committee (which no longer exists) on the details of its cooperative efforts with landowners, and required the Department to only establish boundaries on the river based upon the consent of the owner of any affected private lands. Howell’s Bill deletes the reporting requirement entirely, and retains only the requirement of consent from the owners of any affected private lands.

Unfortunately due to the limited amount of archived information online from the 104th General Assembly, I was unable to locate this report from 2005, although a trip to the State Archives might be fruitful for those of you who are curious about its details. It is unclear whether Howell considers this part “obsolete” because the report has already been made and the Duck River has already received its designation, or because the applicable House Committee no longer exists, or because the General Assembly is uninterested in receiving such reports from the Commissioner on its efforts in working with local communities to establish scenic rivers. Frankly it’s unlikely that the program will be expanded any further, due to a combination of disinterest from lawmakers in identifying more conservation sites and an expected diminishing of federal funds as a new federal Administration dismantles environmental protections.

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13

Jan 2017

Obesity in Children on Welfare

Representative Sheila Butt filed HB0043 which would prohibit recipients of SNAP (“food stamps”) from using their EBT cards to purchase food that is high in calories, sugar, and fat, as recommended by the US Department of Agriculture, prohibits people or businesses from accepting EBT cards as payment for such foods, and authorizes the Tennessee Department of Human Services to seek a waiver from the US Department of Health and Human Services to establish a list of such prohibited foods. The Bill currently does not have a Senate sponsor. Cari Wade Gervin responded to the Bill at the Nashville Scene, to which I wish to add some additional information.

Rep. Butt’s primary argument in presenting this Bill is that there exists an obesity epidemic in Tennessee, and this Bill is designed to police that obesity by prohibiting welfare funds from being used to purchase unhealthy food. First let’s examine the rates of hunger and obesity in Tennessee, before addressing whether this Bill might actually help solve the problem it is aimed at addressing.

As of 2015, the population of Tennessee was approximately 6,386,663, with 1,171,307 Tennesseans living in poverty. 16.7% of our population had incomes below the poverty line ($24,250 for a family of four), ranking us in the bottom 10 states for ending poverty (Mississippi is the worst, with a 22% poverty rate). 17.5% of Tennessean women live in poverty, compared with 13.8% of Tennessean men. 23.8% of Tennessean children live in poverty. Racially, poverty is distributed among Latino (30.7%), African American (25.4%), Native American (18.6%), White (14.5%), and Asian American (10.3%). 15.1% of our households were food insecure on average from 2013 to 2015, with every 1 in 6 Tennesseans suffering from hunger. This rate is up from 13% in 2010. 6% of the 15.1% suffered “very low” food security, a metric that is closer to actual starvation. As of December 2015, there were 1,149,789 Tennesseans receiving SNAP benefits, representing 17.8% of our population. Tennessee is one of eight states that has a statistically higher rate of food insecurity than the US national average, and we consistently rank in the bottom 10 states for child welfare. As if a quarter of Tennessean children going hungry wasn’t bad enough, Tennessee government suffers from corruption and graft in its child welfare and hunger programs, in addition to consistent cuts and tighter regulations for welfare recipients at the legislative level in recent years. This includes Bills like SB0007 from Senator Mark Green, which would cap the total amount of public assistance benefits including unemployment benefits, food assistance, and child care subsidies allowed for a household at the median household income for the state (currently $47,275, $8,500 lower than the US median household income).

Tennessee’s record of poverty and hunger is well-established, but what of our obesity rate? It’s incredibly unsurprising given the prevalence of poverty and hunger. We are currently the 9th most obese state, a ranking that tracks well with our poverty and hunger rates. The Centers for Disease Control (CDC) published a profile in September 2016 on Tennessee State Nutrition, Physical Activity, and Obesity which provided the following statistics:

  • Adults: 30.8% obese
  • Adolescents: 15.8% obese
  • Children: 14.5% obese

The CDC report along with the Tennessee obesity data chart here attempts to analyze some of the behavioral reasons for these obesity rates, such as the consumption of fruit, vegetables, and sugary drinks, as well as physical activity. Only 22.9% of adolescents in the survey participated in daily physical education at school, although 41.3% drank soda daily. Perhaps our students would feel more energized by a little daily exercise than they would by a quick jolt of sugar and caffeine. Interestingly, Representative Bill Dunn filed HB0045 today, which would delete the requirement for LEA’s to provide students with periods of physical activity, allowing schools to eliminate any exercise time for their students (presumably giving them more time to study for their standardized tests). More constructively, Senator Becky Duncan Massey filed SB0049, the “Tennessee Lactation Consultant Practice Act,” which would provide for the licensing of breastfeeding consultants, an important step given the CDC data on how breastfeeding affects child obesity.

Although Tennessee is doing worse at eliminating poverty and food insecurity than it’s in danger of exceeding the national average on obesity, it’s still worth examining the correlation between obesity and SNAP benefits. The USDA noted in 2005 that more research was needed to even begin to examine this correlation, if any correlation even exists. More recent studies have shown that the childhood obesity epidemic of the 80s and 90s has plateaued, with children from wealthier families showing less obesity and children from poorer families showing more obesity. The CDC has completed several studies on the prevalence of obesity among children on welfare. The growing consensus is that childhood obesity is growing among poor children due to a lack of healthy food and safe exercise options, which are provided to their wealthier peers. Poorer kids are getting fatter because they don’t have access to good food and safe exercise, not because they choose bad food and low physical activity.

The many public policy initiatives recommended by the CDC for alleviating poor nutrition, particularly among SNAP recipients, includes:

  • improving breastfeeding education and maternal care and support programs
  • expanding access to farmers markets that accept food benefits
  • state child care regulations that meet national standards
  • nutritious meals and snacks provided in state schools
  • access to parks, recreational centers, and sidewalks
  • state guidance on physical education classes and school recesses.

The emphasis was clearly on the State acting within its authority to improve the lack of healthy options, not on prohibiting hungry children and other SNAP recipients from eating unhealthy foods, which in many cases of food insecurity are the only options readily available in “food desert” neighborhoods. As anyone who has ever tried to feed themselves on the paltry sum provided by SNAP benefits can attest, it is quite a feat to eat well on those benefits even with well-stocked groceries in your neighborhood and plenty of extra time for food preparation. This says nothing of the exercise opportunities available to children in poor areas, often not within walking distance of parks and other facilities, and in some cases too poorly policed to provide a safe environment for children to play. These are all issues which are well within the General Assembly’s power to address if they are serious about improving the obesity rate in Tennessee. Such measures would be far more effective than Butt’s Bill as presented.

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12

Jan 2017

Restoring Veteran Tax Relief

Starting in the early 70s, Tennessee provided property tax relief to low-income elderly or disabled persons, as well as disabled veterans and their surviving spouses. The state would pay the first $175,000 of appraised value on the disabled veteran’s home, or the first $25,000 value on the home of a low-income person who was elderly or disabled.

The Comptroller of the Treasury administers the Tax Relief Program. Funds are allocated by the Governor to cover Tax Relief in the state budget every year. As the data and chart here shows, Tennessee maintains a consistently low base amount of funding for Tax Relief, despite the fact the actual cost of the program is consistently rising. Typically the Governor compensates for this “shortfall” by allocating supplementary funds for the program. For example, $2.5M in supplementary funds was allocated for 2013, $2.75M for 2014, and $3M for 2015.

Unfortunately, Governor Bill Haslam failed to allocate any supplementary funds for the Tax Relief program in the 2016 budget when faced with a roughly $7M shortfall between the base and estimated costs of the program, despite the fact that the State was running a $150M budget surplus and found room in the budget to abolish the Hall income tax as well as allocating hundreds of millions to the failed TNInvestco program. Interestingly, the previous year Senator Mark Norris, who now plans to run for Governor, and Representative Charles Sergeant, filed SB2599/HB2503, which sought to adjust tax relief payments on an annual basis in order to keep all payments within the limits of the base appropriation. The Tennessee veteran community became aware of the Bill, and it was quashed before becoming law.

After the Governor failed to allocate the proper funds for Tax Relief in the 2016 Budget, Senator Randy McNally, who this year became Lt. Governor, along with Representative John Ragan, filed legislation that drastically diminished the tax relief program, particularly for disabled veterans. The veteran community was understandably upset by the change, despite promises by lawmakers to try to correct the budget issue in the future. This year three different sets of Bills have been filed to restore the disabled veterans’ tax relief back to previous levels:

  • HB0005/SB0025 by Senator Mark Green and Representative John Ragan which will restore the available tax relief for disabled veterans from the $100,000 value cut in 2015 to the previous value of $175,000

  • HB0023/SB0021 by Senator Mark Green and Representative Timothy Hill which is virtually identical to HB0005/SB0025

  • HB0020/SB0023 by Senator Mark Green and Representative Joe Pitts, which will restore the $175,000 assessed value relief for disabled veterans, as well as restore the $25,000 assessed value relief from the $23,500 assessed value amount for low-income homeowners who are elderly or disabled.

Although these Bills do nothing to address the budgetary issue which precipitated the 2015 Tax Relief cuts, they are a necessary and welcome improvement for the disabled veterans of Tennessee. Those disabled veterans who benefit from the Tax Relief program are so profoundly disabled that they are unlikely to seek or find gainful employment, and a doubling of their annual taxes that could typically range from $500 to $1,000 in additional tax obligation is a heavy burden to bear for men and women who have already given their country everything short of their last breath.

Tennessee legislators will need to think seriously about their spending and taxing priorities in order to insure the program’s continuance well into the future. Tennessee voters should remember what an important role the Governor plays in insuring the future of Tax Relief when vetting candidates during the 2018 Gubernatorial race.

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11

Jan 2017

Repealing the Professional Privilege Tax

In the wake of the 1990-1991 recession, Tennessee was faced with a similar economic situation to most other states in the country. Their revenues fell. Sensibly, the Tennessee legislature responded with a combination of spending cuts and a proposed tax increase in order to balance its budget. The proposed income tax failed spectacularly, however, as did the subsequent proposal to broaden the sales tax to include a greater number of services, including many of the services provided by professionals now subject to the privilege tax. A compromise was reached which involved both an increase to the sales tax rate, and the institution of a professional privilege tax of $200 per year per professional. The latter was doubled to $400 per year per profession in 2002, following yet another recession.

Since the institution of the professional privilege tax, there have been objections and attempts to repeal it. Several Bills have been filed in recent years attempting to abolish the tax, phase out the tax over a number of years, or change the professions subject to the tax. An Amendment to SB556/HB678 filed in 2015 directed the Tennessee Advisory Commission on Intergovernmental Relations (TACIR) to study and publish a report on the history of the professional privilege tax in Tennessee, its intent, other states’ laws imposing a similar tax, and alternatives to the previous legislative proposals to eliminate or phase out the tax. TACIR published its report “Professional Privilege Tax in Tennessee: Taxing Professionals Fairly” in December 2016.

The professional privilege tax currently applies to 22 licensed professions in Tennessee, excluding 57 other licensed professions. The following criteria was considered by the legislature in determining who would pay this tax:

  • the amount of revenue each profession would raise
  • whether the profession had large average salaries
  • requirement to be licensed in Tennessee (excluding 57 licensed professions)
  • a large percentage (2/3rds) of the tax would be paid by non-residents
  • the State’s need to generate approximately $20 million to fund the Basic Education Program (BEP)

Unfortunately, the tax is still not equitable in its distribution among professionals. For example, the lowest 10% of stockbroker agents earn less than $29,110 per year while the highest 10% earn more than $179,810, even though they both pay the same $400 annual tax. This is particularly onerous given that failure to pay this tax results in administrative suspension of one’s broker license.

The report also notes that nurse anesthetists earn an average annual salary that is greater than 20 of the 22 taxed professions, even though they are one of the professions that is not taxed. As Senator Riley Darnell noted in 1992, “the original intent was to deal with free standing professions, basically a person who could make a living with that license or that certificate, and not someone who generally works for someone else.” Representative Shelby Rhinehart said at the time that they wanted to tax the “big boys” and not the “workers.” For example, physicians and dentists were included in the tax, but not physician assistants or dental hygienists.

A third complaint is that professionals who operate as an LLC, LP, or LLP are required to pay franchise and excise taxes along with the professional privilege tax resulting in double taxation, although this concern could easily be addressed by the passage of legislation allowing for the credit of one tax against the other.

Tennessee is one of only six states that levies a professional privilege tax, including Alabama, Connecticut, Delaware, Montana, and North Carolina, all of which also levy a personal income tax. The details of their professional privilege taxation schemes vary a great deal, both between each other and in comparison to Tennessee. Texas recently abolished their professional privilege tax which was similar to our own. Tennessee and Texas have also consistently ranked among the Top 10 most regressive states in terms of tax policy. That has less to do with their professional privilege taxes, however, and more to do with the fact that poor and middle class citizens must pay a larger percentage of their incomes than the wealthy, who are subject to little to no state income taxes in Tennessee and Texas.

This year, Senator Mark Green has filed SB0015/HB0013 with Representative Jay Reedy which would phase out the professional privilege tax over a four-year period, by reducing the amount of the tax by $100 each year for tax years that begin on and after June 1, 2017. Senator Green is himself a medical doctor subject to paying the professional privilege tax. As the TACIR report notes, phasing out the tax all at once would cost the state an estimated $88 million per year in revenue. If instead the tax were phased out over five years (as originally proposed by SB556), state revenue would decrease by $17.6 million in the first year and by $264 million over five years. Extending the phase-out period over a longer period of time reduces the cumulative loss in revenue, therefore Green’s proposed four year phase out would cost more in revenue than these figures. Nonetheless, only about a third of this tax relief would benefit Tennessee professionals. The rest is paid by professionals who live outside of Tennessee.

So what does $88 million annually buy the people of the State of Tennessee? To put that figure into perspective, we can take a quick look at the State budget. Here are a few items that would be covered by the amount of the annual revenue from the professional privilege tax:

  • The Adoption Services program provides financial support payments to adoptive parents and treatment and counseling services for families to meet the needs of adopted children. Post-adoption records services are provided to adults who were adopted as youth in Tennessee. Actual budget FY 2014-2015: $88,739,400.00, only $44,195,000 of which is from State funds

  • The Family Support Services program, which provides a variety of services that support families with children that are at risk of coming into state custody, ensures that children who enter state custody are provided with appropriate treatment and care and assists with adoptions of special needs children; as well as the John S. Wilder Youth Development Center, the Woodland Hills Youth Development Center, and the Mountain View Youth Development Center. Actual combined budgets FY 2014-2015: $82,293,200.00, only $60,796,500 of which is from State funds

  • The Communicable and Environmental Disease and Emergency Preparedness program works with staff in regional and local health departments to provide epidemiological services. In addition to disease prevention, staff maintains surveillance systems for early detection of bioterrorism and provides emergency support to local health departments and emergency responders. Actual budget FY 2014-2015: $64,228,500.00, only $10,706,000 of which is from State funds

  • The Family Health and Wellness program provides health services to women of child-bearing age and to children in low-income populations in an effort to reduce maternal and infant mortality and morbidity. This program also provides care and case management services to physically disabled children up to age 21, and funding for the Diabetes Prevention and Health Improvement program. Actual budget FY 2014-2015: $43,148,800.00, only $12,410,900 of which is from State funds

  • The Driver License Issuance division tests, issues, cancels, and restores drivers licenses, issues handgun carry permits, photo IDs, collects organ donor information, processes voter and selective service registration. Actual budget FY 2014-2015: $48,659,400.00, only $10,916,500.00 of which is from State funds

  • The FastTrack Infrastructure and Job Training Assistance program provides infrastructure, training, and economic development grants to local governments and businesses for job creation. Actual budget FY 2014-2015: $85,266,800.00, only $64,524,700.00 of which is from State funds

  • TNInvestco Tax Credits was authorized by TCA 4-28-101 to increase the flow of capital to innovative new companies headquartered in Tennessee in the early stages of development. Actual budget FY 2014-2015: $29,312,400 all of which is from State funds.

These are just a few examples of important Tennessee government programs and their annual costs to taxpayers. As you can see, $88 million in revenue goes a long way toward funding programs which provide real, tangible benefits to Tennesseans. As much as anyone can understand not wanting to pay a tax, professionals in Tennessee already enjoy the very rare benefit of not paying state income taxes, and unfortunately the poor in our State already bear an unjust burden in our taxation. Before we rush to repeal the privilege tax, we might want to consider what we will do when the next recession comes along and we’ve eliminated yet another source of Tennessee tax revenue.

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10

Jan 2017

110th General Assembly Convenes

January 10th, 2017 marks the start of the 110th General Assembly of the State of Tennessee. Chas Sisk of Nashville Public Radio gives a brief overview of the changes to expect in this year’s Session, which includes the retirement of Ron Ramsey and his replacement as Lt. Governor with Randy McNally. The Tennessee legislature has spent a great deal of focus in recent years on opposing the federal agenda of President Obama, and with his recent retirement from office and replacement with Donald Trump, the General Assembly is expected to focus less on a reactionary agenda. Many voters are wondering what our State and federal governments will look like with the Republican party holding almost total control over their legislative and administrative agendas.

The Tennessee General Assembly is already announcing their intent to support the incoming Trump administration with Senator Jim Tracy’s filing of SJR0003, a memorializing resolution urging enactment of legislation to implement President-Elect Trump’s first 100-day agenda. Trump released his 100 day plan before the election, which includes the following legislative items:

HEALTHCARE

  • Repealing the Affordable Care Act (ACA) “Obamacare” and replacing it with Health Savings Accounts and the ability to purchase health insurance across state lines.
  • States will manage Medicaid funds
  • The FDA will speed drug approvals
  • Tax deductions for childcare and elder care
  • Incentivize employers to provide on-site childcare services
  • Tax-free Dependent Care Savings Accounts for both young and elderly dependents, with matching contributions for low-income families

IMMIGRATION

  • fully fund the construction of a wall on our southern border with expectation that Mexico will be reimburse the United States for the full cost of such wall
  • establishes a 2-year mandatory minimum federal prison sentence for illegally re-entering the U.S. after a previous deportation, and a 5-year mandatory minimum for illegally re-entering for those with felony convictions, multiple misdemeanor convictions or two or more prior deportations
  • reform visa rules to enhance penalties for overstaying and to ensure open jobs are offered to American workers first
  • create a Task Force On Violent Crime and increase funding for programs that train and assist local police
  • increase resources for federal law enforcement agencies and federal prosecutors to dismantle criminal gangs and put violent offenders behind bars

INFRASTRUCTURE

  • leverage public-private partnerships, and private investments through tax incentives, to spur $1 trillion in infrastructure investment over 10 years.

EDUCATION

  • Redirect education dollars to give parents the right to send their kid to the public, private, charter, magnet, religious or home school of their choice. * End common core
  • Bring education supervision to local communities.
  • Expand vocational and technical education, and make 2 and 4-year college more affordable.

TAXATION

  • an economic plan designed to grow the economy 4% per year and create at least 25 million new jobs through massive tax reduction and simplification, in combination with trade reform, regulatory relief, and lifting the restrictions on American energy.
  • Cut taxes on a middle-class family with 2 children by 35%
  • Reduce the current number of tax brackets from 7 to 3
  • simplify tax forms
  • business tax rate will be lowered from 35 to 15 percent
  • trillions of dollars of American corporate money overseas can now be brought back at a 10 percent rate
  • establish tariffs to discourage companies from laying off their workers in order to relocate in other countries and ship their products back to the U.S. tax-free.

NATIONAL SECURITY

  • Rebuild our military by eliminating the defense sequester and expanding military investment
  • provide veterans with the ability to receive public VA treatment or attend the private doctor of their choice
  • protect our vital infrastructure from cyber-attack
  • establish new screening procedures for immigration to ensure those who are admitted to our country support our people and our values

CORRUPTION

  • Enact new ethics reforms to Drain the Swamp and reduce the corrupting influence of special interests on our politics.

Unfortunately a great deal of the details of this 100 day plan have been left vague, and we still don’t entirely know what to expect. Are we about to return to leaving tens of millions of Americans uninsured? Will we really build a 2,000 mile-long wall across our southern border? How is Trump planning to achieve his infrastructure goals? Is a complete privatization of schools really in the best interests of our children? How will Trump cut taxes for businesses and the middle class while increasing defense spending? These are just some of the issues we will undoubtedly be concerned with during the next four years, as federal legislation affects the people of our State and our State legislators follow the lead of the federal government in writing our State laws.

Our role as citizens in our government does not end at the ballot box. Elections matter because they decide who gets to write our laws, and what form those laws will take. Your vote matters because it helps to decide elections, even moreso at the State and local level. However, even after the election is over, your representatives still answer to you. Government for the people, by the people, isn’t just a feel-good phrase, but a call to action. Our government is designed to work for us, but it only works when we participate in it to the best of our ability. The work of holding our representatives responsible can be an even more important act of citizenship than voting for (or against) them in the first place. Here are just a few of the actions you can take in response to State and federal legislation going forward:

  • Call your representatives and voice your support or criticism
  • write letters to the editor and op-eds in your local publications
  • contribute to effective opposition groups
  • contribute to social media and up-to-date bulletins
  • march and demonstrate
  • boycott

Simply calling your representatives and voicing your concerns about specific legislation, confirming appointees, ethics investigations, etc., truly is effective and can make a difference in effecting outcomes. Even when they are on the other side of an issue, getting enough phone calls from constituents can sway them in the opposite direction. If you are unsure who you representatives are, you can do a quick search for them here, which also provides their contact information. You can also check on your voter registration status or register to vote here.

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13

Jan 2015

The 109th General Assembly Convenes

Today marks the start of the 109th Tennessee General Assembly, wherein our lawmakers will embark on another six months of legislating. This Session promises to be an interesting one. The Republicans strengthened their supermajority in both the House and Senate after the recent election, although among the only five Democratic Senators remaining are Freshmen Jeff Yarbro and Sara Kyle (spouse of former Senator Jim Kyle). The Tennessee GOP is set to run their own agenda again, with very little but vocal opposition from the Tennessee Democrats. However, with Mary Mancini as their new Chairwoman, Democrats are positioned for the first time in several years to make their message known to the people of Tennessee.

Governor Bill Haslam has proposed a special session starting in February to institute Insure Tennessee, a belated proposition to accept the billions of dollars in federal funding to extend Medicaid to Tennesseans under the Affordable Care Act. However, he is expected to encounter resistance from the Republican super-majority in the legislature due to their imprudent and punishing opposition to “Obamacare.”

The Senate opening prayer was delivered by wealthy local Paster Maury Davis, who was convicted of stabbing a woman to death in her own home. He related a story just before he delivered the prayer that another pastor had recently commented in his presence that, “‘grace is not a get-out-of-jail-free card,’ but it was for me,” he said. He’s an interesting choice for delivering the opening prayer considering that women’s health and right to life is a prominent concern on this Assembly’s agenda.

After gaveling in the Session and his re-election as Speaker and Lt. Governor, Ron Ramsey thanked his wife, mother, daughters, and acknowledged his three grandsons (with another on the way), commenting that they are a family full of boys and stating that, “Our actions will shape the future of all the children of Tennessee.” Although the Speaker has expressed a great deal of support against Tennessee women’s right to make their own medical decisions, he has not proposed any legislation to address rampant child poverty in our State or any other issues of child welfare.

The convening of the Session was marked by a protest of several hundred Tennessean women who first gathered at the Tennessee Tower for a series of speeches from leaders across the State, then marched to the Capitol steps where members of the crowd chanted, sang, and were asked to address their fellow citizens. Part of the protest then moved inside, where one group was held in the lobby by State Troopers while another group made it upstairs outside the chambers for more chanting. Other protestors held formal organizational meetings at locations around the Capitol to discuss women’s activism going forward into 2015.

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