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End of May Newsletter from Glen Casada

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End of May Newsletter from Glen Casada

Greetings,

It is now May; we are still weeks away from adjournment.  Next month’s newsletter will discuss final analysis for this legislative year.  I will spend this space discussing some very important issues that have taken place during the month of May. 

With session winding down, the budget has become the most pressing
issue.  The Governor’s budget as proposed spends 1.5 billion dollars
along with a tax increase and NO tax cut on food.  It also breaks the
Copeland cap.  This cap defines the growth of the economy.  With a
budget breaking this cap, it clearly shows that spending is growing
faster than the economy.  This type of spending only leads to a tax
increase.  I am proud to say that I was part of a team that offered an
alternative budget.  My budget that was offered does not break the
Copeland cap, offers a tax cut of 100 million dollars on food and has
no new taxes.  For more detail of this proposal see below…

Illegal Immigration legislation—Passes!

I am proud to say that finally the General Assembly passed legislation
that will address two issues that attract illegal immigrants to
Tennessee.  First, House Bill 1827 was passed earlier this month.  The
vote was 86 to 8. The bill eliminates the issuance of certificates of
driving and provides temporary driver’s licenses for those people
whose presence in the United States has been authorized by the federal
government. Although in the past the bill has experienced a somewhat
cold reception, Thursday morning’s vote was met with enthusiastic
approval by most of the members in the House.

House Bill 491, the Republican initiative to create a memorandum of
understanding between the Tennessee Highway Patrol and the Bureau of
Immigration and Customs Enforcement, passed on the House floor
Thursday morning with a 95 to 1 vote. The bill will assist Tennessee
Highway Patrol officers by enabling them with the tools to enforce
immigration and customs laws in Tennessee. Additionally, the THP will
be able to detain illegal immigrants, and their partnership with ICE
will expedite the process of deportation.

BEP funding formula to receive overhaul

In a joint session, the Governor announced his plan to completely
overhaul the Basic Education Program funding formula, an action that
both sides of the aisle have indicated is long overdue.

The original BEP was passed in 1992 to settle 16 years of litigation
over education funding. The plan was only partially funded in its
first year, after raising the sales tax increase a half-cent, with the
remainder funded over the next six years. The program calculates each
year how much we should spend per student in Tennessee, taking into
account salaries of teachers, the cost of constructing schools, and
the cost of books and diesel fuel. It also determines for each
district how much of the cost of education is the state’s obligation
and how much of the cost goes to local governments.

The overhaul has four basic components:
1.  Paying the full cost of at-risk students
2.  Funding student growth in the year in which it occurs
3.  Funding the costs to a district of English Language Learner
     students
4.  Putting a realistic cost for teachers in the formula and paying 75
     percent of that cost (currently, the state pays 65 percent with local
     governments paying 35 percent.)

Many House Republicans, including me, responded with a call for
accountability.  For too long, I feel the legislature has just thrown
money at education, without expecting any improvements in return.   A
second concern that I have with the new BEP formula is the added cost.
 The Governor is proposing increasing teacher base pay to $40,000,
increased money to at risk children and students who use English as a
second language.  This with in itself not a bad thing, but I think
Tennessee is increasing spending at a rate that economic growth will
not sustain, can a tax increase be far behind.  My conclusion is that
we must spend what is needed to make education work, BUT we must
expect results as well.

State Funding Board reports possible $1.3 billion surplus

Economists told the State Funding Board this week that the state will
have approximately a $1.3 billion surplus this year, a record high.
The figure is about $600 million more than was originally projected
when the Governor first presented his budget proposal.

This means that nearly $700 million of the surplus will be recurring,
with $600 million being non-recurring, or one-time, funds. There are
several proposals for using the new revenue, from special projects to
reductions in the sales tax on food, advocated by many House
Republicans.

Despite the new numbers, the Governor still communicated his intent to
go for a 40 cent tax hike, devoted to education. In addition to his
original education proposals he has now proposed a plan to overhaul
the Basic Education Program, at a cost of $280 million, half of which
would come from the 40 cents-per-pack increase.

Republicans, with the new numbers reported, remained vigilant in their
attempt at cutting the sales tax on food. They maintained that there
is enough money to both fund the education proposals and give
Tennesseans a reduction in the sales tax on food. Still faced with
opposition, they renewed their call this week and vowed to continue
the fight for tax relief.

An Alternative Budget Offered
I am proud to be part of the Republican leadership which has offered
an option to the Governor’s budget.  The Governor’s budget has a tax
increase, no tax cuts and spends nearly all of the 1.5 billion dollars
available for "07-08" budget year.  The budget myself and Leader
Mumpower unveiled last week has no new taxes, no $100,000 per
legislator to spend (the pork bill), does not break the Copeland cap
and cuts $100 million dollars off of the sales tax on food. This
alternative budget to the Governors,  also fully funds the priorities
outlined in the Administration’s budget and addresses legislators’
concerns.

The revised budget has several prongs: providing tax relief, funding
the Basic Education Plan 2.0 at 50 percent (the same level the
Administration is now proposing), and allowing state government to
live within its means. Other highlights include:

– No tax increase
– No pork-that is disallowing the $100,000 per legislator to spend in
   their districts
– 3% state employee raise
– Funds the last 1/3 of compression pay for state employees
– Funds a crime package to increase penalties on sexual predators
– Includes a $21 million farm grant program
– Adds 136.6 million to the Rainy Day Fund
– Allows $100 million for K-12 capital outlay improvements from lottery
   reserves
– Restores $32.8 million in recurring road funding

I and most of the Republicans in the House contends that, contrary to
a now-common misconception, these priorities can be fully funded
without any kind of tax increase. We are damant that the calls of by
most Tennesseans is for no new taxes, tax relief, and no pork. Even
after all these initiatives are funded, the budget has a remaining
balance of $26 million in non-recurring and $5.4 million in recurring
funds left over.

Tax Relief

With lawmakers divided on how a food tax reduction should occur, the
new budget combines two opposing ideas in order to maximize the
benefits to hardworking Tennesseans.

The budget provides a ½ cent recurring reduction in the food tax, and
a non-recurring holiday for a one month "no food tax" holiday in
December. Reducing the food tax permanently to 5.5 percent will save
consumers just under $39 million, with the one-time holiday saving
them $76 million.

Education

The budget funds BEP 2.0 at 50 percent, increasing education spending
by $335.5 million for K-12 over last years spending levels. The plan
provides K-12 teachers with the 3 percent pay raise as well.

In addition to the $335.5 million improvement, the alternative budget
provides $100 million in grants for K-12 capital outlay projects from
the lottery reserve account, as opposed to the Administration’s plan,
which provides for the projects through loans. Republican lawmakers
believe that the grant program is more fiscally responsible, saving
the state and local governments from eventual debt.

For months Republicans have called on the legislature to wait for the
new budget estimates before supporting a tax increase. House
Republican leadership echoed their call from over three weeks ago,
when they held a press conference to call for tax relief to be
included in the budget. With new budget estimates released at the
beginning of the month by the funding board, leadership said it is
obvious now more than ever that some of the money should be returned,
and there should be no talk of raising taxes.

Your Opinion Wanted-Again

The poll on the "pork" spending showed that 91% of those responding
were against the $100,000 per legislator pork spending.  I also am
against this spending and will lead the floor fight to try to defeat
this budget appropriation bill. 

My question to you is this, if this pork bill passes, should I accept
my $100,000 or let it be spent by other legislators in their district?
 This money has NO CHANCE of going to the rainy day fund or used for a
tax cut.  I either accept this money to be spent in Williamson County,
or I give it to other legislators.  I appreciate your sharing your
thoughts with me on this issue.   Please visit my web page and take
the survey question.  Your opinions will help me make my decision.

If I can be of service please contact me at 943-7396, or my
legislative office at 741-4389.

Sincerely,
Glen Casada