Tennessee Departmental Budget Hearings Underway in East Tennessee

Today, Governor Haslam's departmental budget hearings continue in Knoxville with the Department of Education budget hearing.

Also, today will feature budget hearings for the departments of Agriculture, Tourism, Children's Services, and Veterans Affairs. The TennCare budget will be heard on November 28th. These hearings will wrap up this round of the Governor's budget hearings. Video of these hearings is available at http://www.tn.gov/. at the link for budget hearings. If you miss the live presentations, the video is archived for later viewing.

One highlight from the Department of Education budget hearing is that the proposed funding increase for the BEP for FY 2011-2012 is $53.8 million. Of that figure, approximately $20 million is for expected growth in student enrollment. The remaining increase is due to inflationary factors in the BEP formula itself.

Feds Restore Funding for Meth Clean-Up

This past February, federal funds to offset clean-up costs for meth labs dried up. This past week, a federal appropriations act restored $12.5 million in funding for this program. In 2010, the funding was over $19 million. While this new funding is not likely to be enough to meet all demands, it should assist. There was concern nationally as the loss of revenue to deal with the costs associated with the labs seemed to discourage enforcement. Seizures in Tennessee were down 32% over the prior year.

For more on this issue, see this article in the Tennessean here.

New Round of Energy Efficiency and Conservation Block Grants Announced

The Tennessee Department of Economic and Community Development yesterday announced that applications for a third round of Energy Efficiency and Conservation Block Grants (EECBG) will be accepted beginning on Oct. 17. The department has previously awarded $12.1 million in grants to 135 communities throughout the state to implement energy efficient projects.

“The EECBG grants have allowed us to work with communities across the state in their efforts to become more energy efficient,” said Molly Cripps, director, Energy Division, ECD. “These efforts will not only benefit our state environmentally but also provide jobs for Tennesseans.”

The grants will be used to fund a variety of energy efficiency and conservation programs in the local communities, including retrofits to lighting and HVAC systems, as well as the installation of renewable energy systems.

The application for the EECBG grants can be found at http://www.tn.gov/ecd/recovery/eecbg.html.

Applications will be accepted by the department starting on Oct. 17 and will be scored on the local government’s overall conservation strategy, project feasibility, readiness to proceed, community impact, partnerships and the ability to extend funding impact beyond a one-time use. Applications will be accepted and scored on a first-come, first-served basis until the funds are depleted. Previous recipients of the EECBG grants are not eligible.

The EECBG program is projected to cumulatively produce more than 92 million kilowatt-hours (kWh) of energy savings annually, resulting in an estimated cost-savings of $8 million per year for Tennessee communities. In addition, approximately 149 jobs will be created by the more than 140 grants awarded. The EECBG program is funded by the American Recovery and Reinvestment Act, through the Department of Energy, Award Number DE-EE0000958.

For more information on the EECBG program in Tennessee, visit
http://www.tn.gov/ecd/recovery/eecbg.html.

Haslam Administration Plans for Responding to Potential Federal Funding Cuts

This summer, the Governor directed state departments to identify and prepare plans for the impact of potential cuts in Federal funding to state governments. A summary of those response plans are available on the Department of Finance and Administration Website here: http://www.tn.gov/finance/newsrel/Documents/2103FedRevLossPlanSummary.pdf


This document highlights the amount of potential cuts from departments and programs then provides a summary of where cuts are likely to be made. For additional detail, the Department has also posted detailed department plans with specific cuts indicated. Those detailed plans can be found here: http://www.tn.gov/finance/newsrel/Documents/2103FedRevLossPlanDetail.pdf

Impact of Recession on Local Tax Base

The Tennessee Advisory Commission on Intergovernmental Relations has completed a report on the continuing impact of the recession on the local government tax base. The report can be found on their website at this address: http://www.tn.gov/tacir/Special%20html%20Reports/slowdown.html

One sobering statistic from the report: Fifty counties in Tennessee collected less sales tax revenue in Fiscal Year 2011 than in Fiscal Year 2007. So although there has been modest growth in revenue in many counties this past year, revenues still have not rebounded to pre-recession levels in over half the counties.

The report also discusses the impact of the recession on the local property tax base, a phenomenon that has been slower to appear due to appraisal cycles.

Regional Meetings Going Well

I've got to see many county commissioners and mayors so far this month at the first 4 of our regional meetings across the state. The second half of these meetings kicks off tonight (September 13) with our meeting in Cleveland, Tennessee. Later in the week, we'll be at Paris Landing State Park. Next week is our meeting in Jackson with the final meeting in Springfield the following week. We've had some great discussions of issues of importance to counties. Thanks also to those state legislators and congressional staffers who have come to the meetings.

Debt Management Policies

From a press release from the State Comptroller:

Governments Have Four Months to Develop Debt Management Policies

Governments across Tennessee have four more months to develop or revise their debt management policies to conform with standards issued by the State Funding Board.

Last year, the Funding Board agreed to require governments that wish to borrow money to adopt policies no later than Dec. 31, 2011. The requirement applies not only to city and county governments, but other public entities that issue debt, including industrial development boards, utility districts and quasi-governmental agencies.

Comptroller Justin P. Wilson sent letters to local government leaders dated September 1, reminding them of the deadline.

The standards designed by the Funding Board are intended to give local governments discretion in crafting their debt management policies, provided they follow four guiding principles. Those principles are:

1. Debt transactions should be clearly understood by those involved in making the decisions about them


2. Citizens should be able to get clear explanations about the transactions


3. Steps should be taken to avoid conflicts of interest among the parties involved in the transactions


4. Costs and risks association with the transactions should be clearly disclosed
   

More information about the standards can be found online at: http://www.comptroller1.state.tn.us/sl/DebtManagement.asp

Many organizations, including the University of Tennessee’s County Technical Assistance Service (CTAS), are providing assistance to local governments in developing or refining their debt management policies. Local governments may also seek the help of professionals such as financial advisors or bond lawyers.

Additionally, those with questions about the standards may e-mail IGpublic.Finance@tn.gov or call Ann Butterworth, Assistant to the Comptroller for Public Finance, at (615) 401-7910.