May 4, 2017
Budget Hits an Unexpected Snag
as Unlikely Alliance between
Tea Party Republicans, Democrats Emerges in House
Tensions Rise on House Floor as Disaffected Republicans, Democrats Team Up to Derail Budget Process
After spending the earlier part of the week engaged in complex negotiations over budget expenditures and individual House and Senate members' budget requests, the House on Thursday morning convened its regularly-scheduled floor session expecting to consider and adopt its agreed-upon appropriations bill to fund the state budget for the next year.  However, as rumors started to surface that a minority far-right contingent within the House Republican Caucus, still clamoring for relevance after their unsuccessful bid to halt passage of the IMPROVE Act, had formed an unlikely alliance with House Democrats, expectations for a swift and orderly budget approval process quickly evaporated and were replaced by widespread confusion and frustration within the chamber.
As it became clear to House leaders that their anticipated majority coalition to approve the budget had dissolved, Speaker Harwell abruptly gaveled the body into what was to become the first of several lengthy recesses for Republican members to meet separately and privately hash out their disagreements as a caucus.  Behind the closed doors of the caucus meetings, exchanges between members and leaders reportedly grew heated at times, with defecting Republican members combatively defending their decision to break ranks with their party and join the Democrats in mutually supporting a litany of particularized pork projects and hastily-conceived, unaccountable state funding programs for their districts back home.  For their part, Republican leaders pleaded with caucus members not to allow themselves to be used as "pawns," as one leader called it, in Democrats' efforts to control the budget process.
Meanwhile in their own caucus meeting, House Democrats voiced disappointment that their earlier gesture of good faith in supporting the IMPROVE Act had not been rewarded with Republicans' reciprocal support for Minority Leader Craig Fitzhugh's proposed $150 million state block grant program for local school districts.  All but two House Democrats voted in favor of Gov. Haslam's IMPROVE Act, helping it secure passage in that chamber, and many Democrats perceived Republicans' refusal to adopt Fitzhugh's appropriations amendments funding his proposed school block grant program bill as reneging on their prior unspoken agreement.  Republican leaders continue to insist that no such agreement ever existed.
After their initial nearly hour-long recess, Speaker Harwell reconvened the body to consider some sixteen late-breaking surprise amendments filed at the last permissible minute that morning before gaveling in.  As each amendment was called up for consideration, tempers spilled into the open and flared on the floor as several amendments filed by defecting Republican Reps. Jimmy Matlock, Matthew Hill, Sabi Kumar, and Judd Matheny securing funding for a number of favored parochial projects were narrowly adopted over the objections of leadership.  Likewise, Minority Leader Craig Fitzhugh, with support from those same Republicans, successfully attached his $150 million school block grant funding to the budget bill.
The surprise amendments authored by Republican defectors ranged from securing grant dollars for local district airports and veterans and community service organizations to a whopping $300 million slush fund ostensibly for schools to pay down capital debt.  Perhaps one of the more heated debates unfolded over an amendment from Rep. Matthew Hill to provide more medical care for drug-addicted newborns with neonatal abstinence syndrome, a medical epidemic he says is occurring with increasing frequency in his district.  While there was near-unanimous agreement among members for the underlying goal of the amendment, several leaders, including Reps. Gerald McCormick and William Lamberth, questioned the fiscal wisdom of inserting a last-minute funding expansion without input from the Department of Health or specific guidance on how the money should be spent, opening the door for potential waste.  Debate between McCormick and Hill broke down into an open shouting match on the floor, with McCormick questioning why Hill had not brought his amendment earlier at the appropriate time in the budget process and Hill objecting to the implication that his motives for the timing of his amendment were less than authentic.
Between the various recesses and secret leadership huddles scattered across the House floor and clerk's offices throughout the afternoon, it became apparent by roughly 3:00 PM that there would be no agreed-upon solution for the day's discord on the floor.  Veteran budget crafter and House Finance Committee Chairman Charles Sargent expressed his dissatisfaction that the string of surprise amendments had been added to an otherwise balanced budget proposal, throwing the appropriations bill significantly out of balance and potentially threatening to violate Tennessee's constitutional requirement that budget expenditures cannot be greater than available state revenues and reserves.  With unrest mounting and support for passing any budget bill quickly dissipating, Rep. Bill Dunn, a longtime member of the legislature and renowned rules expert, urged calm and reminded his colleagues of the potential hazards of outright voting down the budget bill on the floor, warning that such a move would procedurally leave the body "in a world of hurt."  Majority Leader Glen Casada seemed to suggest simply letting the amendments be added onto the bill, then sending the measure over to the Senate for them to bring it back into fiscal balance.
With the skirmishing factions still locked in a stalemate after an exhaustive day of floor battles, the House simply moved to recess until 9 AM Friday.  Likewise, as of the writing of this report, the Senate moved to adjourn until next Monday afternoon to consider whatever action the House may take.  Depending on how events unfold tomorrow, the timeline for adjournment, once optimistically predicted for May 9th,  will likely prove to be a more elusive target than previously thought.
You can read more about today's unexpected events in this report from Tom Humphrey.  

After Passage of IMPROVE Act, Tire Manufacturer Announces Historic Investment in Rhea County
Adoption of Single Sales Factor Spurs County's Largest-Ever Foreign Direct Investment of $360 Million, 400 Jobs
This week, Tennessee Gov. Bill Haslam, Department of Economic and Community Development Commissioner Bob Rolfe, and officials from tire manufacturer Nokian Tyres announced the company will build a new tire manufacturing facility in Dayton.  Nokian Tyres will create at least 400 new jobs and invest $360 million in the facility, which represents the largest foreign direct investment in Rhea County's history. 
"Nokian Tyres' decision to locate its new operations here is a tremendous win for Rhea County and our state, and we want to thank Nokian Tyers for its decision to invest in Southeast Tennessee," Haslam said. "We've worked hard to create the best possible environment for job creation, and the recent passage of the IMPROVE Act played a critical role in attracting this great company to Tennessee. Today's announcement speaks volumes about Tennessee's competitiveness in the global marketplace."
As part of the IMPROVE Act, which was passed by the General Assembly and signed to law in April 2017, manufacturing companies will have the option to use a single weighted sales factor, which will make Tennessee more competitive when recruiting new manufacturing companies and jobs. 

This means big things for Rhea County.  Our local partner and Rhea County Economic & Tourism Council Executive Director Dennis Tumlin said, "I am honored to be a small part of landing this project that will change Rhea County history forever.  This investment by Nokian Tyres will reflect the single largest foreign direct investment into Rhea County ever. It is also the single largest initial job announcement by a private company in Rhea County history. Our local partnership with the Greater Chattanooga Economic Partnership along with the entire Team Tennessee has created this opportunity that will be felt for the next 50 years in our community."  More local comments here.

Yet Another Manufacturer Reveals Plans to Locate in Tennessee on Heels on IMPROVE Act's Passage
Structural Storage Racking System Manufacturer to Invest $17.4 Million, 120 New Jobs in Dyer County
Frazier Industrial Company officials today announced the company will build a new manufacturing facility in Dyersburg. The leading structural storage racking system manufacturer will invest approximately $17.4 million and create 120 new jobs in Dyer County.
Frazier Industrial is the leading producer of structural steel pallet rack systems. The company has the largest production capacity in the industry. With over 60 years of experience, Frazier's expert team of engineers helps its customers design the best, most cost-effective storage solutions. The company's product is used in all types of business sectors including food, refrigerated storage, beverage, retail, transportation, manufacturing, chemical, pharmaceutical, ecommerce and more.
"In Tennessee, we are known for our highly skilled workforce, especially in the manufacturing sector, and it means a great deal that Frazier will be adding even more jobs to this steadily growing sector," Governor Bill Haslam said. "I want to thank Frazier for its commitment to create more than 100 jobs in Dyersburg and for bringing us one step closer to our goal of making Tennessee the No. 1 location in the Southeast for high quality jobs."
As part of the IMPROVE Act, which was passed by the General Assembly and signed to law in April 2017, manufacturing companies will have the option to use a single weighted sales factor, which will make Tennessee more competitive when recruiting new manufacturing companies and jobs.
"I want to extend our appreciation to the State of Tennessee and the City of Dyersburg for working with us on finding a home for our state-of-the-art manufacturing facility in Dyersburg. It was an extensive selection process, ultimately resulting in locating our tenth manufacturing facility in Dyersburg," President of Frazier Industrial Company Carlos P. Oliver said. "We intend to utilize this new facility in order to penetrate the Midwest market, and we look forward to having a successful venture in Dyersburg that we all can be proud of."
Frazier plans to build a new 175,000-square-foot facility in Dyersburg that is set to be completed in early 2018.

It's National Small Business Week, Y'all-
And Tennessee is Still Ranked #1 for
Small Business Job Growth
We know you have some errands to this weekend.  As you think about your shopping options for Mother's Day, we encourage you to keep your local small businesses in mind.  Small businesses are a crucial part of the state economy and can offer a unique and personalized slate of gift ideas for mom.
Did you know?  For the 4th consecutive month, Tennessee leads the nation in small business job growth.  Tennessee also had the strongest three-month and 12-month growth rates, 1.51% and 2.24%, respectively, of all 50 states.  To our state's entrepreneurs and small-business risk-takers, keep up the great work!

            Photo Credit: @TNECD via Twitter
"Operation Next":  LIFT Announces Workforce Initiative Connecting Civilian Labor Needs
with Military Training
Tennessee Chamber, LIFT Partner to Focus on Civilian Industrial Skills Training for Veterans - Including Ft. Campbell    
This week, national manufacturing innovator and workforce development institute Lightweight Innovators for Tomorrow (LIFT) announced it has partnered with the National Institute for Metalworking Skills (NIMS), Amatrol, and the Gene Haas Foundation to launch a model new workforce training initiative for retiring military servicemen and women called Operation Next.
This new national model provides high-level technical training to separating soldiers while they are still on active duty, moving them from active deployment to a civilian career in the shortest time possible and connecting them to some of the more than half-million open jobs in precision machining and industrial technology.
Operation Next brings market leaders in manufacturing training together in a full- service online learning platform that soldiers can access before leaving the service, accelerating their transition into civilian manufacturing careers. The hybrid training program combines self-directed virtual learning with hands-on lab work and gives soldiers foundational knowledge, practical real-world skills, and national industry credentials with immediate value in the labor market.
 You can read more about this new groundbreaking initiative from LIFT.

Tennessee General Assembly: Weekly Calendars
Senate's weekly calendar click  HERE .
House of Representatives' weekly committee calendar click  HERE.  

In Major Victory for Republicans, House Passes Obamacare Repeal
In this breaking news report from USA Today, House Republicans made good on their years-long promise to pass legislation repealing and replacing the Affordable Care Act, narrowly approving a controversial bill that would unravel many of the law's popular consumer protections, do away with the individual mandate, and overhaul the insurance market.
The final tally - 217 to 213 - reflected sharp divisions over the GOP's proposal, which is a long way from becoming law but still represents a huge victory for House Republican leaders and the Trump administration. The GOP has struggled for months to cobble together legislation that would garner the required 216 votes from its own fractured conference.
"This bill delivers on the promises that we have made to the American people," said House Speaker Paul Ryan, R-Wis., at the end of an impassioned floor debate. "A lot of us have been waiting seven years to cast this vote ... (and) to rescue people from this collapsing law."
He and other Republicans said the GOP plan would increase competition, lower costs and return power to the states and to individuals. Keeping Obamacare in place, Ryan said, would mean "even higher premiums, even fewer choices, even more insurance companies pulling out" of the individual market.
Democrats fiercely attacked the Republican bill, saying it would gut consumer protections, increase health care costs, and strip health insurance from the poor and middle class.

Tennessee Cybersecurity Conference
June 21, 2017 
8:30 a.m.-1:30 p.m.
Sheraton Downtown Nashville 

The Tennessee Chamber of Commerce & Industry, in partnership with the U.S. Chamber of Commerce, is hosting a Cybersecurity Conference that brings together top experts both locally and nationally from government, law enforcement, and the private sector to help business leaders develop, evaluate, and strengthen their cybersecurity programs.  

'Gallup: Trump gets highest rating for keeping manufacturing in U.S.'
(Gallup) -- reports, "When asked to rate President Trump's performance in six economic areas, Americans are most positive about his efforts to keep manufacturing plants from leaving the U.S. and his efforts to cut back on federal business regulations."  Meanwhile, Trump gets his lowest marks for his efforts on tax reform, the story notes.

Investors Should Bet On Small Manufacturers
Behind a paywall, Forbes  (5/2, Baldwin) reports that "taxes, regulations and competition from cheap foreign labor" are harming "manufacturers of mass-market items --cars, fridges, phones." Investors who want to "make a bet on American industrial strength" should "find a company that makes weird stuff in small volumes," Forbes adds. 

Know an extraordinary volunteer age 50 or older?
Show your appreciation by nominating him or her for the
2017 AARP Tennessee Andrus Award for Community Service.
AARP's most prestigious Tennessee volunteer award recognizes individuals who are sharing their experience, talent and skills in ways that significantly enrich the lives of others. The Tennessee winner will receive a $5,000 prize, which will be donated to an eligible nonprofit of the winner's choice! Only one Tennessee individual or couple is selected each year.
The nomination deadline is June 2, 2017.
For more information, eligibility requirements and nomination forms, visit or call 1-866-295-7274.

AARP Tennessee  
150 4th Ave. N., Suite 130
Nashville, TN 37219
Phone: 1.866.295.7274

For further information, please contact:

The Capitol Update is written by the Chamber's government affairs staff and is distributed statewide to all of our business, local chamber and economic development professionals.  The Tennessee Chamber Capitol Update is a powerful grassroots communication tool and we encourage you to share this publication with your team members to provide crucial updates and engage your local elected officials on important issues.