Tennessee poised to maintain strong bond ratings
by Kevin Brooks State Representative
Nov 10, 2013 | 721 views | 0 0 comments | 40 40 recommendations | email to a friend | print
Kevin Brooks
State Representative
Kevin Brooks State Representative
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The federal government’s serious financial challenges haven’t put a damper on Tennessee’s economic success over the last several years, a fact that was showcased during official meetings with the nation’s three major bond rating agencies last month.

The meetings, which took place in New York in mid-October, were led by Gov. Bill Haslam, state constitutional officers Justin P. Wilson, Tre Hargett, and David H. Lillard, Jr., along with House Speaker Beth Harwell, R-Nashville, and House Majority Leader Gerald McCormick, R-Chattanooga.

Last year, Tennessee was rated AAA by Fitch Ratings and AAA by Moody’s Investor Services — the highest rankings given. In addition, the state was rated AA+ by Standard and Poor’s, which is the second highest rating available.

“We have the lowest debt ratio of any state, which is one major indicator of our financial health,” Comptroller Wilson said. “We have a history in Tennessee of borrowing comparatively little money and repaying it quickly. That kind of financial discipline is one of the hallmarks of our state.”

Tennessee’s credit rating helps determine how much interest state and local governments must pay when they borrow money to fund projects such as new schools and roads.

“Tennesseans can take great pride in how our real gross domestic product has grown at a faster rate than the United States’ GDP for three consecutive years,” Secretary of State Hargett said. “This can be attributed to the productivity of our hard-working citizens and the investments we continue to make in education, modern technology and infrastructure. In fact, when government is excluded, the private share of our GDP compares favorably to other triple AAA-rated states, demonstrating how our economy is better equipped to weather cuts in government spending.”

“Long-term liabilities such as pensions and other entitlements are among the biggest financial challenges facing governments today,” Treasurer Lillard said. “In Tennessee, we recently reformed our pension system to reduce the state’s liability over time while producing a sufficient and sustainable benefit for retirees.”

The rating agencies are expected to announce Tennessee’s updated ratings in the next several weeks.

Tree lighting ceremony

to commemorate SA’s

‘Angel Tree Day’

Lawmakers announced this week that a Nashville Daily’s will be sponsoring a tree-lighting ceremony in December to commemorate the longstanding Angel Tree program administered by the Salvation Army. A resolution passed earlier this year designated Dec. 1 as “The Salvation Army Angel Tree Day” to further raise awareness for the Angel Tree and the Forgotten Angels programs.

Country artist Jimmy Wayne, who as a child benefited from the Angel Tree program and originally presented the idea of Dec. 1 as Angel Tree Day in Tennessee, will be performing at the event. State Rep. Mark White, R-Memphis, who was the primary House sponsor of the legislation, will present resolutions to the program’s founders, Lt. Col. Charles and Shirley White.

The Salvation Army Angel Tree Program, created in 1979, gives individuals and partnering corporations an opportunity to adopt less fortunate children and seniors and provide them with personalized gifts and necessities they otherwise would not receive during the holiday season.

“The Salvation Army’s Angel Tree program has such a positive impact on children and seniors in need during the holiday season,” White said. “Designating Dec. 1 in honor of this program will raise awareness and encourage those in the community to participate.”

The ceremony will be held on Dec. 1 at 1 p.m. CDT at the West End Daily’s location in Nashville.

This event is free and open to the public. All interested parties are invited and encouraged to attend.

Second half of 108th

General Assembly

to convene in January

Having completed the first half of the 108th General Assembly in late April, House lawmakers are now busy preparing for the second half of the legislative session set to begin on Tuesday, Jan. 14, 2014, at noon.

While many topics to be debated are still up in the air, House lawmakers hope to build on the successes of the 2013 balanced budget that was passed earlier this year.

Highlights of this year’s budget include:

Tax cuts

n A drop in the state sales tax on groceries from 5.25 percent to a flat 5 percent rate which will save taxpayers approximately $25 million statewide. This tax reduction builds on efforts during the 2012 legislative session which reduced the sales tax on food from 5.5 percent to 5.25 percent. Lawmakers hope to continue this trend in years to come.

n Implementation of the second phase to eliminate Tennessee’s so-called “death tax,” which is set to be completely phased out by 2016. House Republicans agree the death tax breaks up family farms and small businesses, forcing families to make tough decisions during what is often the most difficult times in their lives: the passing of a loved one. In many cases, families are faced with selling off parts of farms and land or closing a small, family-owned business in order to pay the tax bill. The full repeal of the death tax will represent a $94.6 million tax cut.

n A cut in the Hall tax for seniors 65 and older. The Hall tax is imposed on income derived from interest on bonds, notes and stock dividends. Since enactment of the Hall tax in 1929, the use of investment savings has grown as a primary source of retirement income. Because of this fact, Republican lawmakers argue the Hall tax is actually an income tax, especially for seniors living on a fixed income. The Hall tax cut approved in the budget raises the income exemption level from $26,200 to $33,000 for single filers, and from $37,000 to $59,000 for joint filers. Lawmakers have promised to build on this tax cut in the future;

n And, a continuation of property tax relief efforts passed in previous years to help veterans, seniors and the disabled population of Tennessee.

Education improvements

The state’s Basic Education Program — the mechanism for funding public schools — is fully funded in this year’s budget at $4 billion. In addition, the budget provides:

n Increased funding for information technology upgrades at K–12 schools statewide;

n Increased funding for need-based financial aid;

n Funding for a new building at the Tennessee School for the Deaf;

n Continued funding for the state’s Science Alliance Museums, the Governor’s School and Family Resource Centers, the Arts Academy and the Tennessee Holocaust Commission;

n Increased funding for statewide equipment upgrades at community and technical colleges; and

n More than $300 million for capital outlay and maintenance projects at public colleges across the state.

Law and safety

Earlier in the year, the governor announced his plan to address violent crime in Tennessee. Among the measures fully funded in this year’s budget are laws addressing gang violence, prescription drug abuse, repeat domestic violence offenders and synthetic drugs. These measures include:

n Funding for increased sentencing for gang-related crimes;

n Funding for the expansion of the Southeastern Tennessee Regional Correctional Facility;

n Funding to address an increase in the number of felons in local jails; and

n An array of measures designed to battle the rise of human trafficking across the state.

Workforce development

The budget passed this year reflects a commitment by GOP lawmakers to foster an environment for job growth across Tennessee. Republican legislators understand that in order for our economy to continue improving, government must stay out of the way of job creators and ensure it is not placing unnecessary burdens on business. The budget passed this session includes multiple programs to help business owners grow and thrive, including:

n A continuation in funding of the state’s FastTrack Infrastructure and Job Training program which aids businesses across the state in securing funding for expansion projects and ensuring employees are trained to their fullest potential;

n An increase in funding to Tennessee’s nine regional development districts to help local governments implement important infrastructure projects and recruit new business; and

n Continued funding to recruit and develop the state’s film and television industry which has steadily grown in recent years and helped bring in millions of film and tourism dollars.

Since January 2011, nearly 80,000 new jobs have been created in Tennessee, and the unemployment rate is the lowest it’s been since December 2008.

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(Editor’s Note: State Rep. Kevin Brooks serves the 24th Legislative District in Cleveland and Bradley County. He and his wife, Kim, are actively involved in their community and local schools. Their two children, Zach and Elizabeth, attend Lee University.)