February 4, 2022 Legislative Update

This week's headlines include the State of the State, economic recovery, a Tennessee Supreme Court nominee, and more.

Gov. Bill Lee delivers 2022 State of the State, unveils budget proposal

Tennessee Governor Bill Lee on Monday delivered his fourth State of the State address and presented budget and legislative priorities to a joint session of the General Assembly.

“Tennessee stands as a beacon to the rest of the country for how we can change lives when we control the size of government, prioritize efficiency, and make smart and responsible investments,” Lee said. “I am proud to propose a budget and America at Its Best policies that reinforce freedom, innovation, exceptionalism, and optimism.”

The proposed $52.6 billion budget includes strategic investments in education, transportation infrastructure, law enforcement, rural communities, and more.

A detailed breakdown of the budget proposal can be found here. The State of the State address can be found here.

The proposed budget was the focus of a Senate Finance, Ways and Means Committee meeting Tuesday.

“What we’re proposing is a very fiscally conservative budget. It is also one that ensures that we do not get ahead of ourselves as we look forward into the future,” Department of Finance and Administration Commissioner Butch Eley said during the meeting. “This is a balanced budget, it’s a budget with no debt, it’s a budget that prioritizes one-time expenses to mitigate uncertainties. It targets programs that work and are evidence-based, and most of all it invests in Tennessee.”

Eley said Tennessee is among the states with the lowest debt in the country and noted that the Volunteer State is ranked number one in the nation for long-term fiscal responsibility by U.S. News and World Report.

Filed at Feb. 3 deadline

Senate members worked hard this week to finalize their legislative proposals before the Feb. 3 bill deadline. In all, 1,241 Senate bills were filed and received by the Senate Clerk’s Office since the conclusion of the legislative session last year. Senate committees continue to meet as bills were being introduced and referred to their respective committees.

Tennessee’s economic output is back to pre-pandemic levels, while the state leads the nation in economic recovery

Tennessee’s economic output is back to pre-pandemic levels in terms of goods and services and is among the top states leading the nation in economic recovery, according to Marianne Wanamaker, executive director of the Howard Baker Center for Public Policy. Wanamaker, who spoke to the Senate Commerce and Labor Committee this week, is also an associate professor of economics at the University of Tennessee and served as chief domestic economist and senior labor economist at the White House Council of Economic Advisors during the Trump administration.

“From an output perspective, the economy is operating as though COVID never happened,” said Wanamaker. “This is true in the State of Tennessee where GDP in the third quarter of 2021 was 3% larger than in the fourth quarter of 2019. The U.S. economy was 1.4% larger in the third quarter of 2021 than at the end of 2019.”

“What I am not sure is appreciated is just how uncommon the U.S. experience is an international perspective,” she continued. “There is no major developed country that has come out of the pandemic with the strength of output we are experiencing in the United States — not Korea, not Japan, not any country in Europe and probably not China, although it is difficult to know for sure.”

She attributes the strength of the recovery in part to efforts made by U.S. states in facilitating the unemployment insurance programs, a critical piece of the Trump administration’s national COVID relief strategy. “Given what we know today, it is hard to conclude anything other than that the U.S. policy apparatus succeeded in stabilizing income, output and employment to an extent not any other country was able to accomplish.”

On labor shortages, however, the pandemic worsened workforce participation, which was already struggling due to aging workers and a slowed rate of population growth. “The labor shortage and lack of population growth are going to be a challenge with 100% certainty,” she said.
Tennessee is 1.4% short of February 2020 and 3% short of where the state would have been had the pandemic never happened, for a shortage of 95,000 jobs. This means the level of output was generated beyond what was produced pre-pandemic with a labor force that is substantially smaller. Wanamaker attributes this to full time workers who spent more hours on the job.

“So, hours worked are up which may explain why working Americans expressed feeling burned out and exhausted,” she said. “American labor supply took a beating during COVID and is still struggling to recover.”
The shift to retirement began immediately upon the outbreak of the pandemic, accounting for about half of the country’s labor force shortage in 2020. Wanamaker feels it is unlikely that the 2.1 million workers who left their jobs will return to the workplace and that the participation rate will return to pre-pandemic levels.

In Tennessee, there is one-half of an unemployed person for every job opening in Tennessee, one of the lowest rates in the country. This can be compared to California where there is one unemployed person for every job opening.

“It is not that labor supply is greater in California than it is here,” she said. “It’s that labor demand in the South is really much higher than it is in other parts of the country, in part due to a full COVID recovery here in the South.”

In looking towards Tennessee’s economic future, Wanamaker said prospects for future economic growth are dependent on population growth. Tennessee already has a significant jump on this challenge. The state leads the nation in attracting working-age persons to locate in Tennessee due to many amenities offered here that other states cannot currently pursue.

The General Assembly will continue to focus on providing an environment that will boost Tennessee’s economy in the 2022 legislative session. These efforts are aided by the state’s low tax and light regulatory status. Tennessee consistently ranks in the top three states in the U.S. for best business climate. The Volunteer State has also ranked first for site readiness programs and energy availability and has seen its biggest surge ever in new business launchings. In addition, Tennessee has recently ranked the second fastest-growing state in the nation for foreign direct investment.

Tennessee Supreme Court nominee advances

Tennessee Supreme Court nominee Sarah Campbell received a unanimous recommendation from the Senate Judiciary Committee this week.

The full Senate will cast a vote next Thursday. A graduate of Duke Law School, Campbell was a law clerk for Supreme Court Justice Samuel Alito and Judge William Pryor Jr. of the Eleventh Circuit in Birmingham before joining the Tennessee Attorney General’s office in 2015. She currently serves in that office as Associate Solicitor General and Special Assistant to the Attorney General.

“The role of a judge in my view is to decide cases based on neutral objective principles that don’t lend themselves to any one particular outcome or another,” Campbell said during this week’s confirmation hearing. “My personal views on whether a law is good or bad will not matter if I’m confirmed to this position.”

Campbell said as a judge she would adhere to the text of the law, but also consider the context.

“My job as the judge will be to interpret the laws that were enacted by the legislature. That will be where my inquiry begins and ends,” she said. “To determine the meaning of those words I will consider things like the context of the statutes so it’s not so restricted that you only look at the specific word or words that you’re being tasked with interpreting. You also look to the surrounding words in the statute and use that context to help determine what the meaning is.”

Campbell was also asked if she believes the U.S. and Tennessee constitutions are fixed principles or if they should be modified to fit modern issues.

“I believe that both The U.S. Constitution and Tennessee constitution should be interpreted and applied based on the plain meaning of those documents when they were enacted — how the public would have understood those documents at that time,” she said.

Sen. Kelsey, Rep. Gillespie announce bill allowing police to chase criminals

Senator Brian Kelsey (R-Germantown) and Rep. John Gillespie (R-Memphis) this week filed Senate Bill 2451 protecting police officers from liability for injuries to a third party caused during a police pursuit so long as the police officers’ conduct is not grossly negligent.

“This legislation will make our state a safer place to live. It will allow our police officers to do their jobs by protecting them from unjust lawsuits,” said Sen. Kelsey. “The current law discourages police officers from pursuing dangerous criminals. As we continue to experience record-breaking crime rates in Memphis, our officers should be able to protect our citizens as long as they are acting reasonably.”

Corrections Commissioner updates lawmakers about efforts to improve public safety

Tennessee Department of Correction (TDOC) Interim Commissioner Lisa Helton spoke to the Senate State and Local Government Committee this week, providing a wide range of important information regarding their efforts to improve outcomes for prisoners and enhance public safety for Tennesseans. Tennessee has 10 state-operated and four privately-operated prisons which house 19,287 inmates. Another 4,875 state inmates are serving sentences in local jails.
In addition, there are 75,030 supervised offenders who are on probation or parole in the state’s 44 Community Supervision offices in Tennessee.

In 2021, the General Assembly passed major criminal justice reform legislation to reduce Tennessee’s high recidivism rate. TDOC has been working diligently to put those reforms into action. The department is “reentry focused” with a variety of education and workforce development programs to help offenders get on the right path after prison.

After doing an initial diagnostic assessment, TDOC officials develop a case management plan that includes treatment programs, education, vocational training, and employment. The vocational program includes a partnership with the Tennessee Colleges of Applied Technology (TCAT) and other workforce development partners to give inmates the skills they need to become productive citizens upon release to their communities.

Day Reporting Centers — About 283 of offenders on probation are in the state’s Day Reporting Centers (DRC), a supervised program that provides nonviolent offenders with substance use needs an alternative to incarceration. The successful DRC program provides an intensive nine to 12-month outpatient treatment program coupled with supervision. There are currently six centers in Tennessee located in Memphis, Jackson, Nashville, Murfreesboro, Knoxville, and Johnson City. Plans are in the works for additional centers in Columbia and Chattanooga.

The average daily cost of housing a prisoner is $74.51, while the same upkeep in a DRC is $47.74. The fiscally responsible DRC program is based on best correctional practices and have been proven to enhance public safety. Since summer 2017, 250 participants have graduated across the state with another 283 currently enrolled in the program.

Correction Officers — Commissioner Helton also talked to committee members about efforts to recruit and retain correction officers at state prisons amid significant staffing challenges. November 2021 hit a high mark of 47.5 percent in the number of officer vacancies in the state’s correction facilities. In December, Governor Lee announced a competitive 37% salary increase for new TDOC officers and a minimum of 15% pay increase for current employees. Since that time, the department fully hired more than 10 officers, with 110 others currently in the hiring process. Commissioner Helton said she is optimistic about the impact of the salary increases on turnover and recruitment.

“We have seen a 12% reduction in the statewide number of vacancies with five facilities exceeding a 16% reduction,” she said.

TDOC continues to work with the Governor’s office and other state agencies on recruitment and retention strategies for correctional officers. The budget proposal presented by Governor Lee on Monday continues the commitment to those salary increases. Committee members will continue to monitor the success of these efforts and work with state correction officials to help ensure Tennessee prisons are well-staffed and safe.

Right On Crime — Finally, State and Local Government Committee members heard a presentation from Julie Warren from Right on Crime, a national campaign of the Texas Public Policy Foundation. Warren applauded the passage of Tennessee’s 2021 criminal justice legislation to improve inmate outcomes through evidenced-based sentencing alternative programs. She also talked about the tremendous success of Texas’ criminal justice efforts, which originated with former Governor Rick Perry. The Texas reform efforts have resulted in a significant decrease in inmate recidivism.

“I have looked several times at the Texas plan,” said State and Local Government Committee Chairman Richard Briggs (R-Knoxville). “It has been pretty incredible. Tennessee has as much potential to reduce recidivism, improve public safety, and reduce budgets in the Department of Corrections if we can implement something similar to the Texas plan. It really worked in a conservative state.”

In Brief

Standardized tests — The Senate Education Committee this week voted in favor of a bill that requires public universities to receive standardized test scores from incoming freshmen before they can enroll starting with the 2023-2024 academic year. In Tennessee, standardized testing requirements are currently the purview of the universities.

Sponsored by Sen. Brian Kelsey (R-Germantown), SB 1815 would require incoming freshmen to submit a “nationally-recognized college admissions test” score, but would not require universities to use that score as part of its admissions process.

Veterans organizations — The Senate this week passed SB 1660, which extends protections that currently apply to various types of nonprofit organizations to nonprofit veterans organizations, technically classified as a 501(c)(19). Under this bill, the directors, trustees, or members of the governing body of 501(c)(19) nonprofit organizations will become immune from suit arising from the conduct of the affairs of the organization as long as that conduct does not constitute gross negligence.

Divorce — A bill authorizing a court to allow mediation between parties in a divorce proceeding to occur by video conference when appropriate was approved by the Senate on Monday.

Ear wax — Passed by the Senate this week, SB 665 requires certain coursework in order to administer ear-wax removal services to ensure the process is done safely.