Recently I had the privilege of delivering the annual State of the State address to members of the 108th General Assembly and fellow Tennesseans.
In addition to introducing a balanced budget and laying out our administration’s legislative priorities for this year, I talked about something we all know – that Tennessee is different. We’re known as the Volunteer State. We have a history of independence and service. Over the years, we’ve been intentional about avoiding the traps that Washington, D.C. and other states have fallen into that have gotten them in trouble time and time again.
So what makes Tennessee different? Why are we coming out of one of the worst recessions this country has ever seen in a place of strength? I believe it’s because we think differently. We have a long history of fiscal restraint that crosses party lines. We have been deliberate about not spending money that we don’t have and in making a concerted effort to save for the future. A good example was last year when there was temptation for some to quickly commit and spend funds that were coming in above estimates, but in the tradition of our state’s discretion, we held the line. And now we are well-positioned to continue to invest in a thoughtful, strategic manner.
Our budget proposal highlights our priorities: education, both K-12 and higher education; attracting and growing Tennessee jobs; and being the best managed state in the country. When we talk about the budget, it is important to talk about what we haven’t done to balance it. We haven’t raised taxes. In fact we’ve lowered taxes. We’ve cut the state portion of the sales tax on food from 5.5 to 5.25 percent and are proposing to lower it to 5 percent this year. We’ve eliminated the gift tax, and are in the process of phasing out the inheritance tax. We reduced the burden of the Hall Income Tax on senior citizens and are proposing to reduce it further for them this year.
Another thing we did not do to balance the budget was to cut funding for education. Not only did we not cut funding, we had the second largest increase in state K-12 expenditures of all 50 states in fiscal year 2012. I’m not sure that Tennessee has ever been able to say that before. The average increase was nearly 3 percent. Ours grew almost 12 percent in state education funding.
Dollars alone, however, don’t lead to improvement. There has to be a plan. Along with strategic investments, we’re pursuing real reform in education that is producing results.
We’ve addressed tenure so that a principal doesn’t have to decide after three years to either fire a teacher or grant tenure. There is now a five year time period for the principal to use data more effectively to assess a teacher’s performance and then allow time to give that teacher the additional support that he or she needs to improve to earn tenure.
We’ve expanded charter schools to eliminate the cap on the number that we can have in Tennessee and to offer more students the opportunity to attend a charter school.
This year we’re proposing to offer another option for school choice through a program to allow low-income students in our lowest performing schools a chance to receive a better education. I expect this proposal will be hotly debated, but after taking a careful look at the issue and how a program might work in Tennessee, I believe a limited approach that gives more choice to parents and students stuck in difficult situations makes a lot of sense. If we can help our lowest income students in our lowest performing schools, why wouldn’t we?
In higher education, we’ve kicked off our “Drive to 55,” a strategic initiative for Tennessee to have the best-trained workforce in America. Today 32 percent of Tennesseans have an associates’ degree or higher, and we’re focused on raising that number to 55 percent by 2025. To do that, we must address affordability, accessibility and the quality of our higher ed programs.
We’re partnering with Western Governors University to establish “WGU Tennessee,” an online, competency-based university that is geared to the 800,000 adult Tennesseans that have some college credit but didn’t graduate with an associate or four-year degree. The program is unique because of its competency-based curriculum but also because of an emphasis on mentors who guide those adults through the academic process.
We’re also proposing to establish an endowment of $35 million using operational reserve funds from the Tennessee Student Assistance Corporation (TSAC). It is designed to provide nearly $2 million each year to support scholarships for “last dollar” scholarship programs such as tnAchieves. These scholarships fill the gaps between students’ financial aid and the real costs of college including books, supplies, room and board.
We will continue to put a strong emphasis on education. The reason is simple; to be the number one state in the Southeast for high quality jobs, we have to have a well-educated workforce to attract and fill those jobs. We want our state to be the place where our best and brightest want to earn their degrees and ultimately work, live and raise a family.
Since January 2011, nearly 80,000 new jobs have been created in Tennessee, and the unemployment rate is the lowest it’s been since October 2008. Tennessee ranks first in the Southeast in new manufacturing jobs created and first in the growth of manufacturing jobs in 2012. That’s good news, but it doesn’t mean we can take our foot off of the gas.
To provide certainty to businesses, we overhauled our tort laws. To build on those efforts, this year we’re proposing legislation to reform our worker’s compensation laws. During my first year in office, I held business roundtables across the state where we heard from businesses over and over that worker’s comp is an issue in Tennessee. We spent last year working with stakeholders to find ways to improve our system with a focus on fairness to both the employee and employer, and we believe the worker’s comp bill we’re proposing does just that.
I look forward to working with the Legislature as we continue to focus on the issues that matter to Tennesseans: jobs, education and a customer-focused state government that is committed to serving Tennessee taxpayers efficiently and effectively.