 FAN 4-3-2007 |
In this issue: A Brief Review
In our last issue, we spoke of how a Republican majority in the state Senate had literally given the Republicans a seat at the Governor's dinner table and offered some insight into how the rise of a two party system in Tennessee was changing the way legislative business gets done. Specifically, we noted how, in the past, House leadership would routinely kill measures that proved popular if the House and Senate sponsors were both Republicans. More specifically, a Republican Senator with a good bill knew that a Democratic House sponsor was the best hope for the bill getting through the House. Well, it's time for round two on the subject of how it works. In the last two weeks three bills have died in House Subcommittees that demonstrate a different facet of how the process in the House works and it has evoked a response from Republicans. Recently, the House Public Safety and Rural Roads Subcommittee killed a bill that would have required driver's license tests to be administered in English only and another that would have allowed state troopers to begin enforcing immigration laws. Both bills had already passed the Senate. Then, last week, a bill that would have reserved to the legislature the power to decide whether the HPV vaccination would be mandated died a rather quite death as well. This later bill was an effort to prevent from happening in Tennessee what happened in Texas where the Governor, by executive order, mandated that young girls receive the vaccination. Bills die all the time in both Chambers, so that's no big deal. But perhaps what the public does not realize and needs to appreciate is the process by which they died. Making it up as you go along. Playground "rules" for politics Unlike the Senate, the House establishes standing Subcommittees to which the Speaker appoints members. Those are the people you have to get a majority of votes from in order for your bill to get to round two - the full committee. But, there is a caveat. In the House, the officers of the full committee have the right to come into a subcommittee meeting at any time and vote on a bill, even if they are not "named" members of the subcommittee. So, on any particular bill, a sponsor may not know who all is going to vote on the bill. But that's not all. In the House, the Speaker and the Speaker Pro Tem serve as "roving" members of any committee or subcommittee; they can come into any subcommittee or committee and vote on any bill. So, again, a bill sponsor may think he or she has the votes to move the bill out of the subcommittee only to find an "extra person" getting to vote. Red Rover, Red Rover, Send "An Extra Voter" Right Over "All I want is an honest advantage." (attribution unknown) Anyway, these rules were used to good effect to kill two of the aforementioned bills. And now you know more of "the rest of the story" as to how the "sausage" gets made in the Tennessee legislature. In the past, that would simply have been the end of it, but Republican Senate Speaker, Ron Ramsey, said, in so many words, "not so fast." "[The Speaker casting a deciding vote in subcommittee is] not good," said Speaker Ramsey. "It doesn't bode well. He has that prerogative, but I hope that that's not the atmosphere we're going to set." In other words, the rule the House has established does permit what was done, but Speaker Ramsey and Senate Republicans don't like having the composition of the committees change on their House sponsors during a meeting. It's sort of like changing the rules of the game as you go along - like shooting at a moving target. It would at least be nice if the "roving" committee members had to declare in advance that they intended to vote on a particular bill. The outcome might be the same, but at least the proponents of the bill would know prior to the meeting that they needed to call on a couple of additional people to explain the bill and get their support. Anyway, in the past, nothing would come of the action in the House. I saw the Senate "give in" to Speaker Naifeh and House leadership many times in my 12 years in the Senate. I've seen former Speaker Wilder pound the conference table and say the Senate shouldn't give in...right before it gave in. But, now it is a different day. It will be interesting to see if the Senate leadership finds some bills important to the House leadership and drag them out a bit. One key limitation on the Senate, however, is a rule - a good rule actually - that provides that a Senator has a right to have his or her bill heard in Committee. The Chair can decide when to schedule it and it might be the last bill on the last day, but the bill must be scheduled for hearing. So, we'll keep our eyes open to let you know how the Senate Republicans respond. "To tax and spend, or not to tax and spend?" That is the question. Already the Senate Republicans are exerting some influence on the budget, holding off on taking action on the Governor's proposed tobacco tax until they see how much surplus income reaches the state's coffers in April when certain corporate taxes are due. Republican Senators also want to look at using surplus revenue to reduce the sales tax on groceries. They also want to make sure that everything the Governor has proposed in spending is necessary in their opinion. While he doesn't like it and has tried to round up support from outside groups for his tax, the Governor seems to have realized that some "negotiation" with Senate Republicans may be necessary. In recent days he's apparently indicated a willingness to consider "negotiating" with Republicans on some means of "tax relief" or returning some of the surplus in the way of tax reductions. But the Governor seems very leery of a Republican plan to reduce the sales tax on groceries. His concern is that the sales tax on grocery items is perhaps the most stable part of our tax base and, in a time of recession, will aggravate the loss of tax revenue that normally coincides with a recession. Personally, on the effect of reducing the sales tax on groceries, I agree with the Governor's concern. I don't think anyone could really disagree that the revenue from the tax on groceries is the most stable part of our sales tax base. In an economic downturn, people put off buying cars and appliances, but they will put some kind of food on the table. And, of course, when something stable in the tax base is removed from that base, it puts the pressure on the rest of the tax base. So, the next time there is a revenue shortfall, the spending cuts will have to be deeper or the tax rate on the remaining items in the base will have to go up higher than it otherwise would have to cover the loss. A "picture" is worth my 1000 words For example, assume you spend $2,000 a year on groceries, buy an $8,000 used car, and pay a 6% state sales tax. The state will collect $600. But, if the state only taxes the car, it has to impose a 7.5% sales tax in order to collect $600. The Republican response has been that the revenue "given up" this year by reducing the sales tax on groceries will be covered by this year's surplus and in the coming years the "lost" revenue will be "plugged" with the future year's revenue growth. What is bad for the Senatorial goose is bad for the Gubernatorial gander The Governor has conceded that the tobacco tax increase he has proposed to cover his new educational initiatives is a declining source of revenue (or most folks hope it is as fewer people smoke). But, it is also apparent that the educational programs he has proposed will only increase in cost over time. The Administration has said that it intends to cover this divergence between income stream and program costs with the increases in revenue in future years. Gambling on the future discipline of elected officials - a not so sure bet The amount of revenue that will have to be covered in the future by revenue growth may be larger or smaller with the Republican proposal or the Governor's proposal, but the "solution" is the same in principle. And the issues created by the solution are the same. In other words, the "solution" does work, but only if the future legislators and Governor's are disciplined enough to allocate enough revenue growth in future years to cover the growing discrepancy between "cost" and "revenue stream." When there is not enough income in those future years to cover the "lost grocery revenue" or the "added educational program costs" and the new, other "good" stuff that folks say they really need to have that have been "put off," that is when a tax increase comes. Promising to cover growing costs or lost revenue with future revenue growth sounds simple enough. But the demand for "government" money is insatiable and honest politicians will tell you that. We need to appreciate that every year the Governor's proposed budget, whether Republican or Democrat, reflects less spending than the various Departments actually asked for. And, of course, once the budget comes out and the various interest groups see it, they clamor for money for "good things" that got "left out" of the Governor's budget. Demonstrative of this demand for more money is that it was only during the McWherter administration that the state went from a cash basis for spending to an accrual basis. We now spend "projected revenue" growth on recurring expenditures. It is my understanding that the switch was made in order to have more revenue to spend. Using the accrual method is, perhaps, not so unusual for businesses, but businesses can adjust to shortfalls in projected income without the same bureaucratic hassles and political tensions as government. And, of course, the problem with this funding method in government comes when projections fall short, as they did in the Sundquist years. Then, the irresistible force (a tax increase), meets the immovable object, (spending levels in government program expenditures). People don't want a tax increase, especially in hard times, but they also don't want to give up their services. In fact, arguably, the demand for government services goes up at the very time the "government" loses some of its ability to pay for them. If we really want to protect the taxpayer, then what about using the surplus to begin to transition back to a cash basis system where we spend only the revenue we have and not "bet" on our revenue projections? Maybe the cost of that transition is too much. I don't know. Maybe it's too "old fashioned." Maybe we wouldn't stand for it anyway; maybe we, the people, are not disciplined enough to "allow" then to cut or delay too many of the proposed objects for new spending in the current budget proposal. But, on the other hand, if the Governor and legislature would slow down on new spending and move toward a cash basis again it would show the kind of fiscal budgeting discipline it will take to do what both "sides" are now proposing to do in the future - not start new programs and delay future programs until they fund what they propose to do today ... and without resorting to a tax increase in a year or two to start them. If the legislature and the Governor won't delay new programs now and we will not support them if they do, then let us not forget and expect them to delay new programs tomorrow when a tax increase is needed to pay for them. |
