Adams and Reese Update – 3-1-2024

State of the State Recap: Governor Lee Emphasizes Education Freedom, Maintaining Foundation of Past Accomplishments

Governor Bill Lee delivered his sixth State of the State address to a packed House Chamber on February 5th. As is customary, the Governor used the speech as a vehicle to set out his legislative priorities and spending proposals for the year, signaling what will be the front-burner issues for the 2024 session. Unlike recent years where the state’s revenues greatly exceeded budgeted projections, this year the state’s revenue is lagging substantially behind projections; thus, with the exception of an educational freedom bill to expand the use of educational vouchers across the state and a handful of other proposals, several new initiatives were either comparatively low cost, or utilized savings realized in prior years. 

The Governor reiterated that he has three years remaining in office and emphasized that there is much still to be done. He also stated his belief that Tennessee’s job is to “fortify that which has been built over the years, and to remember the work it took to get here.” Along those lines, the Governor said the state’s firm foundation is possible due to its legacy of fiscal responsibility. And while he described the state’s revenue growth as returning to normal, Governor Lee stated that the “new normal” is still 40% higher than three years ago.

The speech was also memorable for its distractions, as a number of protestors and hecklers in the gallery often made it difficult to deliver the speech in a normal rhythm. The hecklers seemed to argue with every point that the Governor made, but despite the distraction, no one was removed from the gallery. At one point the Governor indirectly addressed the protestors, stating that “civility is not a weakness.” That line drew a lengthy standing ovation from most of the General Assembly.

Governor Touts Tennessee’s Economic Production, Rural Recovery, and Justice Reforms

Governor Lee provided some noteworthy statistics that underscored Tennessee’s recent accomplishments. Among other things, he noted that Tennessee is one of six states in the Southeast that are contributing more to America’s GDP than the entire northeast, including New York, New Jersey, Massachusetts and Pennsylvania. He also argued that the emphasis on rural Tennessee is paying off, noting that Tennessee has gone from 15 distressed counties down to eight in just five years, and Haywood County now leads the state in capital investment – most of which is directly attributable to Blue Oval City, a massive new Ford plant that is being built in Stanton. Taken together, Tennessee’s poverty rate is now below the national rate. Lee also proudly noted that Tennessee now has the lowest recidivism rate in state history, crediting criminal justice reforms in the process.

Specific Highlights and Proposals

Perhaps the biggest highlight of any State of the State is the Governor’s specific legislative and budget proposals. Those included the following:  

1. Education Freedom: A plan to expand school choice by allowing more parents to determine what is best for their child’s education – thus allowing parents to decide where their children go to school and what they learn – by expanding the Educational Savings Account program that was instituted during Lee’s first term. While the specifics of the plan have yet to be unveiled, the concept has already proven controversial among many public-school advocates. Governor Lee reiterated that public schools are invaluable – noting the historic investments in public education to the tune of more than $1.8 billion during his term as Governor – and promised another significant investment in the school funding formula this year, as well as a plan to help public schools retain the best and brightest teachers in their districts. Over the shouts of protestors, Governor Lee stated that “our responsibility is to the student and to the family, not to the status quo.” That line drew a standing ovation from most in the chamber.
2. Franchise Tax Overhaul: A necessary simplification to Tennessee’s franchise tax, which has been in place for 90 years. The administration recently became aware of a need to change the law – and a strong risk of engaging in litigation where the state would likely be unsuccessful – and opted to resolve the issue now to allow the state to move forward. The total price tag of the overhaul is expected to be approximately $1.2 billion in immediate one-time costs and an additional $410 million in recurring funds over the next few years. 
3. Fiscal Responsibility/Rainy Day Fund: As an indication of his administration’s continued commitment to fiscal responsibility, Governor Lee announced a $20 million investment in Tennessee’s Rainy Day fund. While the investment reflects a significant reduction from investments made in recent years, the deposit will increase the state’s reserves to over $2 billion.
4. Protecting Tennessee’s Music and Artists from AI Impersonation: Legislation to combat AI technology that allows users to impersonate musical artists and create fake works, appropriately entitled the “Elvis Act,” will be the first of its kind in the United States, and perhaps a blueprint for other states.
5. Children and Social Media: A proposal to give parents tools to oversee their child’s social media activity and require social media companies to get parental consent for minors to create their own accounts in Tennessee.
6. Rural Health: Building off recommendations from the Rural Health Task Force that was commissioned in 2021, a $208 million investment in rural healthcare over the next five years – the single largest investment in rural healthcare in state history – but to come at no added cost to Tennessee taxpayers due to savings realized from Tennessee’s TennCare waiver.
7. Mental Health Support: Also from the shared savings from the TennCare waiver, investing more than $100 million over five years in behavioral health and substance abuse support.
8. Statewide Permitting Reform: A proposal to institute statewide permitting reform to accelerate building times and streamline construction.
9. Safety: Funding to hire 60 new state troopers, on top of the 200 new troopers that were previously funded.
10. Conservation: The establishment of a Farmland Conservation Fund, to partner with Tennessee farmers who voluntarily place a conservation easement on their land, giving farm families the ability to protect their farmland for future generations.

Following the gubernatorial address, on Feb. 6 the House and Senate Finance Committee hearings featured Finance and Administration Commissioner Jim Bryson, who provided more granular detail on the Lee administration’s $52.6 billion budget, including specific spending proposals and the cost involved. A few of the budget highlights that did not make it into the Governor’s speech include a $207 million proposal that will create eight new state parks, improve water quality and grow Tennessee’s outdoors industry; a $24 million investment to address aviation infrastructure needs; and a $500 million investment in capital maintenance and infrastructure.

A 2024-25 fiscal year budget overview can be found here. 

U.S. Congressman Mark Green Will Not Seek Reelection

U.S. Representative Mark Green, from Ashland City, has recently announced his decision to not seek a fourth term. While Green’s decision marks a significant turning point in his career, there have been a few indicators suggesting retirement as a possibility, hence speculations about a potential gubernatorial run in 2026 by Green.

Prior to Green’s political career he was a doctor and a retired U.S. Army Major. He embarked on his political journey at the Tennessee General Assembly, where he served as a State Senator from 2012 to 2018. He then transitioned to the U.S. Congress in 2018 to represent Tennessee’s 7th Congressional District. Currently, Green holds the position of Chairman for the House Homeland Security Committee, a testament to his rapid ascension through the ranks during his three terms in Washington D.C.

Emphasizing his commitment to his constituents, Green has focused on passing legislation aimed at enhancing border security and ensuring accountability within the Department of Homeland Security under Secretary Mayorkas, both of which he has successfully accomplished during his term. Reflecting on these achievements, Green believes that now is an appropriate time to transition back to his local community. He stated, “I have come to realize that our fight is not here within Washington; rather, our fight is with Washington’s bureaucracy.”

Memphis Judge Tapped to Fill Upcoming Tennessee Supreme Court Vacancy

Earlier this month, Governor Bill Lee announced the appointment of Mary L. Wagner to fill an upcoming vacancy on the Tennessee Supreme Court. Wagner, a graduate of the University of Colorado and the University of Memphis School of Law, currently serves as a circuit court judge for Shelby County in the 30th Judicial District. She was appointed circuit judge in 2016 by then-Governor Bill Haslam and won election in 2018 and 2022. Prior to becoming a judge, Wagner was an associate attorney at Rice, Amundsen & Caperton, PLLC and taught as an adjunct professor at the University of Memphis School of Law.

Wagner was amongst two other Memphis judges that were selected as finalists for the upcoming Supreme Court vacancy—the other two were Court of Criminal Appeals Judges, Camille McMullen (52) and J. Ross Dyer (51). Wagner pointed out in an interview that while she may be relatively young at 39 years old, she has a wide variety of experiences and skills, maintaining that age was not a relevant variable of her ability to fulfill the position.

With the retirement of Justice Roger A. Page, if confirmed by the Tennessee Legislature, Wagner will fill Page’s seat after his retirement on August 31, 2024. 

Potential Candidates to fill 7th Congressional District Seat

Congressman Mark Green (R-TN7) made national headlines when he surprisingly announced that he would not seek re-election to his congressional seat this fall. Green, a physician from Ashland City and a prominent member of Congress, ignited a firestorm of speculation about who would succeed him in representing the district, which also includes parts of Nashville. Previous state Rep. Brandon Ogles (R-Franklin) is the only person who has confirmed their intentions to run for the seat thus far. However, Republican activist Mark Moore, from Cheatham County, expressed his interest in a bid via social media. When questioned about the possibility of running for Green’s vacant seat, one likely favorite – State Sen. Bill Powers (R-Clarksville) — responded through social media that he is “honored to serve as state senator and currently has no plans to run for Congress.”