February 1, 2018 | Tennessee Chamber of Commerce & Industry
February 1, 2018
Haslam Delivers Final State of the State: Outlines 2018 Agenda

Governor Bill Haslam delivered his final State of the State address Monday night to a packed joint session of the Tennessee General Assembly. The moment was bittersweet for Haslam who had a number of family members and many supporters in attendance. Overall, Haslam detailed his strongly successful tenure on business and education initiatives. Haslam also noted his 2018 priorities which are three major focus areas:

  • Tennessee Together - $30 million initiative to end the opioid crisis in Tennessee through prevention, treatment and law enforcement.
  • Complete to Compete – Workforce and Education Initiative promoting college completion through scholarship incentives and structured scheduling
  • Juvenile Justice Reform – Adopting responsible reforms to Tennessee’s juvenile justice system
Tennessee Chamber: A Thank you to Governor Haslam

Governor Haslam mentioned a number of crucial policies he implemented in partnership with the Tennessee Chamber and the business community. These priorities and reforms have been game changers in helping Tennessee’s economic growth and include:

  • Comprehensive Tort Reform
  • Comprehensive Workers’ Compensation Reform – Rates 40% below prior to reforms
  • IMPROVE ACT – Focused on improving our infrastructure system and Single Sales Factor for Tennessee Manufacturers.
  • Tennessee Manufacturing – Haslam noted that for each manufacturing job there are 3 to 4 other jobs that come with them, justifying his focus on recruiting and expanding manufacturing.
  • TN ECD restructured focusing on FastTrack grants instead of tax credits; Business Facility magazine ranking us #1 and TN #1 in Foreign Direct Investment
  • Workforce and Education – Establishing Drive to 55 / Tennessee Promise / Tennessee Reconnect to enhance our workforce.
  • $1.5 billion in new dollars to K-12 education includes $500 million for teachers’ salaries
  • $578 million in tax cuts, partnering with General Assembly establishing Tennessee as one of the lowest personal tax states in nation for individuals.

Continuing the Work: Making Tennessee # 1 in Jobs, Education and Effective Government

As reported by the Tennessean, hours before his final State of the State speech, Haslam stated he planned to stress the need for continuing the work that has been done in recent years. “The message is that we can’t stop now,” he said. “We have made great progress, but the exact wrong thing to do would be to change the direction that we’ve made, the progress we've made in jobs and education and running a very effective government.”

The speech outlined a laundry list of accomplishments and statistics from the past seven years. For many observers Haslam’s tenure represents one of the most prosperous operations of state government in recent memory.  His dedication to a prudent budget process, substantial education accomplishments, and adopting policies to improve the business climate are worthy of cheers. Here are some of the statistics that the Governor used to make the case for himself. 
Jobs : “We must build on our job growth and economic success by continuing to develop a skilled and trained workforce while providing a low-tax and predictable business environment.” – Governor Bill Haslam
Since 2011…
  • 400,000 net new jobs have been created. 
  • The state’s unemployment rate has hit record lows & continues to outpace the national rate.
  • Tennessee is one of the lowest taxed states in the nation.
  • Investments in infrastructure to ensure Tennesseans have a safe, reliable transportation network to access the jobs of the future.

Education :  “We must further the gains we have made in education by staying true to the reforms we have put in place for Tennessee’s students and families.” – Governor Bill Haslam  
Since 2011…
  • Tennessee put in place higher standards and greater accountability for our students and educators. Our students are now the fastest-improving in the nation.
  • The state will have invested nearly $1.5 billion into K-12 education, with $500 million going to teacher salaries.
  • Tennessee’s high school graduation rate has hit a record high and more students than ever are going to college.
  • Tennesseans can attend college tuition-free through Tennessee Promise and Tennessee Reconnect.

Managing the State :   “We had the opportunity to drastically overhaul the state’s budget with a new philosophy built around seeking innovation and a commitment to provide the best possible service at the lowest possible cost. Working together, our strong track record of low taxes and low debt now positions us to be the very best stewards of the people’s money.” – Governor Bill Haslam
Since 2011…
  • State government has shrunk through $578 million in cuts from the state budget.
  • The Rainy Day Fund tripled, providing the state with long-term financial security.
  • Tennessee has the lowest debt per capita of any state.
  • Tennesseans have seen $572 million in tax cuts, including a 30 percent cut on the sales tax for groceries.
The Haslam Administration released a website, TENNESSEE WILL LEAD . It articulates the challenge that the Governor issued in his speech, as he politely challenges the legislators (and his successor) to continue the work. 

Editorial Comment : We believe these are good things, and we didn’t get here by accident. We encourage Governor Haslam (and all those who agree that Tennessee is in a better place) to continue to “ shout to the hard of hearing ” ensuring these policies are advanced in the years to come. 
Haslam Outlines 2018 Priorities

2018 Budget
Gov. Bill Haslam's final budget proposal calls for more than $200 million in new state funding for K-12 education, $128 million in job growth investments and  $30 million in previously disclosed dollars  to address the opioid epidemic. 
The governor said, should the budget be approved, state government will have grown at a rate of 2 percent per year on average while he’s been in office. “It has helped us be able to cut taxes, lower our debt and raise the amount of money in our savings account,” he said. 

Haslam Budget Documents
On Tuesday in both Senate and House Finance committees, Finance and Administration Commissioner Larry Martin delivered a presentation of the 2018-2019 recommended budget. Please see the links below to the administration’s recommended budget overview and 2018-2019 budget publications.
The bill filing deadline expired at Noon today. According to the clerks in the joint bill filing office there are at least 1,300 bills filed for the 2018 Legislative Session, but they are still processing those who made it under the wire. We notice that the majority of bills have not been referred to committees, so much of the machinery of legislating will have to occur in the week(s) ahead.

Tennessee General Assembly: Weekly Calendars
Senate’s weekly calendar click  HERE .
House of Representative’s weekly committee calendar click   HERE
House of Representative’s weekly subcommittee calendar click HERE

Welfare Reform Initiative Gains Support in Tennessee House

House Republicans recently announced continuing support to implement efforts to reform Tennessee’s welfare system. Last fall, the Haslam Administration announced an initiative to reinstate the work requirement for able-bodied adults without dependents who rely on the state’s Supplemental Nutrition Assistance Program (SNAP) for assistance. Haslam announced this initiative as a workforce issue since Tennessee’s unemployment rate has reached epic lows resulting in workforce shortages in a number of areas.
Haslam and House Republicans note that reinstituting work requirements will impact approximately 58,000 able-bodied adults who are categorized as receiving assistance but are not working. The restoration of these stipulations will not impact residents who currently depend on these key benefits in 16 Tennessee counties still designated as distressed by the Tennessee Department of Economic and Community Development. They will also not apply to Tennessee’s senior citizens or disabled residents. Haslam has noted this initiative not only encourages more Tennesseans to utilize their job skills to go back to work and be productive citizens, but also strengthens the overall integrity of the SNAP program by reinstating work requirements. We expect legislation will be filed in the coming weeks to implement these efforts, and we will keep you up to date.

Good news following passage of federal tax reform
In the past week several Tennessee companies have made announcements of capital investments . Articles on recent announcements in Tennessee are below. For a list of other actions other companies are taking such as employee bonuses, raising wages, increased retirement contributions and expansion of benefits, click here
FedEx Announces $3.2B Investment in Higher Wages, Hints at Memphis SuperHub Expansion

FedEx last week announced it would invest more than $3.2 billion for wage increases, bonuses and additional pension funding for employees. The Memphis-based company also hinted at plans to modernize and enlarge its Memphis SuperHub. The logistics giant said it would reveal specific details for its Memphis SuperHub in spring 2018. Here's more on FedEx's major investment plans.
How HCA plans to spend half-a-billion dollars in tax savings

Following HCA Healthcare, Inc. Q4 earnings call on Tuesday, the Nashville Business Journal reports HCA CEO Milton Johnson says the company plans to invest in its existing facilities to stimulate growth.
Electrolux plans investment, new line for Springfield plant

Electrolux has announced plans to invest about $250 million and add 400,000 square feet of manufacturing capacity, including a new line of Frigidaire freestanding cooking products, to its Springfield plant. Officials expect construction to begin at the plant in late 2018 and continue into 2020.

"This news isn't about job growth," company spokeswoman Eloise Hale said Tuesday. "It's about modernizing and expanding the 44-year-old plant with new technology and advanced manufacturing." The news comes as Electrolux continues a two-year expansion streak in Robertson County.
Workforce Notes:
New Optional Family and Medical Leave Credit for Employers
Becomes Law for 2018 and 2019 in Tax Cuts and Jobs Act

On December 22, 2017 President Trump signed the Tax Cuts and Jobs Act (HR 1) . The new act includes an employer credit for paid family leave. This provision p rovide s employers with a tax credit to encourage utilization of paid family leave and offsets cost s to implement. This provision is supported by the business community who opposed initial proposals that would have mandated paid family and medical leave requiring employers to pay higher unemployment taxes in the President’s originally proposed FY 2018 budget.
The Tennessee Chamber encourages e mployers that currently provide paid family leave and those considering adding paid family leave to take a close look at this new option that may provide a significant tax credit for 2018 and 2019.
Can a Centuries Old Approach Help Modern Companies Find New Talent?

The solution to the skills gap and finding employees with great potential may lie in creating apprenticeships In spite of shrinking unemployment numbers, many companies say they’re still having trouble  finding workers with the skills necessary  to fill specific roles. An  April 2017 survey from CareerBuilder  found that 60% of U.S. employers across a wide range of industries have job openings that stay open for 12 weeks or longer. The average cost of extended vacancies is more than $800,000 annually, and this inability to find candidates takes a toll on productivity, morale, and revenue, to name a few areas.

Apprenticeships  have long been used by manufacturing and the trades to give workers the skills, knowledge, and on-the-job training they need to transition seamlessly into specific roles. Now, in an effort to bridge the skills gap and tap new talent pools, more companies are using the apprenticeship model, partnering with community colleges and four-year higher education institutions as well as nonprofit community organizations, to find workers and ensure they have the precise skills needed to do the job.

The Tennessee Chamber is monitoring numerous legislative efforts designed to remove barriers for businesses and educators. Our members support the efforts of all who encourage tried and true approaches to expose and excite the next generation of workers. The Tennessee Promise and Drive to 55 efforts have given the next generation an advantage in reaching their career goals. We must ensure we take the next steps to share the career opportunities in our home and neighboring counties. 

Business and a Biscuit Legislative Series
A Fast Paced Preview of the Legislative Week Ahead

Week #3: Monday, February 5, 2018
10:00am – 10:30am CST
Location: TN Chamber Office, 414 Union Street, Nashville, TN 37219

**Join in person or dial-in by phone**
RSVP email required: info@tnchamber.org
Business & Education Partnerships are a 21 st Century Workforce solution
College athletics begin recruiting at the 8-9 th grade levels, will business do the same?

(Wichita) Spirit AeroSystems is looking wide in its plan to fill 1,000 new jobs over the next two years: to high school students, experienced sheet metal workers, retirees and people outside of Kansas. Starting this semester, a group of high school seniors are attending sheet metal training offered through Wichita Area Technical College, for which they will receive credit. When they graduate from high school later this spring, most who successfully complete the sheet metal training will receive job offers from Spirit. 
Private Sector Report: U.S. heads for 3% growth trifecta

Bloomberg.com reports that "the U.S. economy probably ended last year with the longest stretch of 3 percent-or-better growth since 2005." That is "according to the Bloomberg survey median ahead of Commerce Department data." "Tax cuts championed by President Donald Trump have fueled expectations of an extended boom in capital spending and buoyed household confidence." Going forward, there may be other ups and downs. Opinions from Economists are mixed on whether the economy will continue its momentum into 2018. 
Gov. Report: GDP Growth Strong, Positive Signs
Lower inventories and lagging exports constrain growth 
The Bureau of Economic Analysis’s “advanced estimate” shows that the U.S. economy grew by an annualized 2.6 percent in the fourth quarter, according to preliminary data. The increase in real GDP in the fourth quarter reflected positive contributions from personal consumption expenditures (PCE), nonresidential fixed investment, exports, residential fixed investment, state and local government spending, and federal government spending that were partly offset by a negative contribution from private inventory investment.

The BEA will revise their numbers in the coming weeks, as they analyze additional data. If the revision get closer to the 3 percent growth mark, we will see ecstatic reports from the business media channels. In the third quarter, real GDP increased by 3.2 percent. 
Environment News
Late last week the EPA issued a guidance memorandum that withdraws the long-standing Once-In-Always-In policy for sources of hazardous air pollutants. With the new guidance, sources of hazardous air pollutants previously classified as “major sources” may be reclassified as “area” sources at any time, provided the facility limits its potential to emit below major source thresholds.” 

EPA Announcement  Note EPA wi ll soon publish a notice in the Federal Register to take comments on regulatory text that will reflect this guidance.

The Hill provides a brief summary of the announcement. In the new guidance regulators explained that the “once in, always in” standard disincentivized companies from reducing pollution and targeted it as part of the Trump administration’s overarching goal of cutting regulatory burdens. “Nothing in the structure of the [Clean Air Act] counsels against the plain language reading of the statute to allow major sources to become area sources after an applicable compliance date,” wrote William Wehrum, head of the EPA’s air office.

The Hill article also reflects the disagreement and distain of environmental groups with this decision. 

The Wall Street Journal extended the coverage, noting that Environmentalists and congressional critics decried the change, saying it is one of the EPA’s bedrock environmental regulations that keeps polluters from trimming back to just below the major-source classification cutoff to avoid requirements that could further lower their emissions.

The WSJ reported President Donald Trump has made a rollback of environmental regulations one of his signature issues, carrying out a main campaign promise by withdrawing or rewriting rules designed to fight climate change, coal-ash pollution and coastal flooding, among many others. It is part of a broad attempt to make oil companies, power plants and manufacturers, among several different industries, more competitive by lowering their costs.

The latest change “will reduce regulatory burden for industries and the states, while continuing to ensure stringent and effective controls on hazardous air pollutants,” Bill Wehrum, assistant administrator of the EPA’s Office of Air and Radiation, said in a statement.
Haslam, Rolfe Announce Nearly $10 million in Broadband Grants

Last Friday Gov. Bill Haslam and Economic and Community Development Commissioner Bob Rolfe announced $9.844 million in broadband accessibility grants that will help build new broadband infrastructure in parts of 13 Tennessee counties. The grants are the result of the Tennessee Broadband Accessibility Act, Haslam’s 2017 legislation to increase broadband to more Tennesseans and offset the capital expenses of deploying broadband in areas that currently lack access. The grants will provide broadband service to more than 5,000 locations in counties across the state. 

The grant recipients include:
  • Aeneas Communications: $190,000 to serve parts of Hardeman County
  • Ben Lomand Communications: $1,025,000 to serve the Pocahontas Community in Coffee County
  • Comcast: $850,000 to serve parts of Tipton County
  • DTC Communications: $1,725,000 to serve parts of Smith and Wilson counties
  • Gibson Electric Membership Corporation: $1,353,148.14 to serve parts of Lake and Obion counties
  • Scott County Telephone Cooperative: $1,900,000 to serve Surgoinsville in Hawkins County
  • Sunset Digital Communications: $1,375,000 to serve parts of Claiborne and Hancock counties
  • Tri-County Fiber Communications: $1,350,000 to serve parts of Sumner and Trousdale counties
  • Volunteer First Services: $76,714 to serve the Sunset Ridge Community in Cumberland County 

Alongside  digital literacy grants  announced last week, the Tennessee Broadband Accessibility Act has already supported nearly $10 million in broadband investments across the state.

 TN GOV:  2017 Year End Campaign Finance Reports.  
Bill Lee has First TV Ad in the Gubernatorial Contest

TN GOV: Williamson County businessman and Republican gubernatorial candidate  Bill Lee has announced the first television ad buy of the 2018 governor's race. Lee’s 60-second ad titled “ Why ,” will run on cable and broadcast channels statewide from Jan. 27 to Feb. 3. The ad opens on what appears to be a foggy morning on Lee’s farm and offers a personal look at the candidate. There is also a longer version on the campaign's website  and on social media.  

Randy Boyd has a 30 second spot detailing his conservative credentials .

Diane Black also released a 30 second spot encouraging all to stand for the National Anthem .

Mae Beavers Ends Campaign for Governor

TN GOV: Tuesday, former St. Sen. Mae Beavers (R-Mt. Juliet) announced on Facebook that she was ending her campaign for Governor. “ Today, after much deliberation, I am suspending my campaign for the office of Governor of the great state of Tennessee. After crisscrossing the state and meeting thousands of fellow Tennesseans, it was not a light decision to make because you have embraced our conservative message whole-heartedly.” Beavers also thanked her supporters and volunteers, noting she looked forward to retirement for public office.  The Tennessean has additional analysis on the impact of Beaver’s leaving the race.

There has been some speculation that Beavers is interested in running for County Mayor in Wilson County.  Deadlines are February 1 for counties holding a primary in May or March 22 for counties using other nomination methods. 

Marsha for Senate Launches Radio Ad
Encourages Everyone to Stand During Anthem

TN SEN: Rep. Marsha Blackburn (R-07) launched a statewide  radio ad  ahead of the Super Bowl urging Americans to stand during the National Anthem. “Blackburn's campaign did not disclose which specific radio stations the ad would be aired on and how much money it cost.” ( Nashville  Tennessean )  

Congressman Fleischmann injured but OK after fatal train crash

CROZET, Va. ( AP, 1/31 ) — A train carrying dozens of Republican members of Congress, including Chuck Fleischmann of Tennessee, slammed into a garbage truck in rural Virginia on Wednesday, killing one person in the truck and sending several lawmaker-doctors rushing to help the injured.
Fleischmann said he was standing on the train when the crash occurred, according to a post on Twitter.

Fleischmann said he was thrown around upon the impact and suffered neck, back and foot injuries. In June, Fleischmann was among a group of congressmen who were fired upon during a baseball game in Washington. He was uninjured in the attack. 
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