NASHVILLE, Tenn. – Gov. Bill Haslam delivered his annual State of the State address Monday before a joint session of the Tennessee General Assembly.
The speech was titled “Tennessee – America at its best,” which is also the official state slogan. But those words ring truer than a mere marketing catchphrase, Haslam asserted, “We think we are a model to the nation in so many ways.”
In a time of national uncertainty, Tennessee is a national leader in areas that matter, like education, job creation, low taxes and low debt, he said.
“As I travel through the state and have the opportunity to meet with so many people, there is a lot of optimism out there and a lot of pride in Tennessee,” he said.
Haslam praised the efforts both of lawmakers and his administration in keeping state finances orderly and delivering government services efficiently.
“Working with the General Assembly, we have kept taxes low,” Haslam said.
But not at the expense of public schooling, he added.
Boasting that Tennessee was recently named “State of the Year” by Business Facilities Magazine, Haslam quoted the publication’s editor who said, “Tennessee continues to impress us with its execution of a diversified growth strategy. The state has put in place a solid foundation for robust job creation for years to come.”
As expected, Haslam focused the bulk of his attention on education, both to laud his administration’s past initiatives and tout new policy undertakings.
Of particular pride to Haslam was the announcement back in November that Tennessee had achieved the largest degree of academic improvement of any state in the country on the National Assessment of Education Progress report card – an accomplishment for which Tennessee has been praised by President Barack Obama and his administration.
Haslam recalled that Tennessee’s scores in 2013 were the largest ever of any state in a single testing cycle since testing began nationwide 10 years ago.
“It is not an exaggeration to say that we are seeing historic gains due to the hard work of our teachers and leaders,” Haslam said.
“We are showing that it is possible for all students to grow academically,” he said.
Haslam also unveiled what he described as a "bold" new program, the Tennessee Promise. It would be designed to encourage more residents to attend post-high school learning institutions. His plan is to use state lottery money to guarantee free tuition at community colleges and technology schools.
The program is part of another Haslam education effort called the “Drive to 55,” which is an initiative to boost the number of Tennesseans who earn degrees beyond high school.
Currently, 32 percent of graduating seniors get degrees beyond high school, and he wants the state shooting for 55 percent by 2025.
“The Tennessee Promise is an ongoing commitment to every student, from every kindergartner to every high school senior,” he said. “We will promise that he or she can attend two years of community college or a college of applied technology absolutely free. If students then choose to go on to a four-year school, our transfer pathways program makes it possible for those students to start as a junior. By getting their first two years free, the cost of a four-year degree is cut in half.”
Tennessee would be the only state in the country to offer high school graduates two years of community college with no tuition or fees along with the support of dedicated mentors.
Haslam is proposing to make the program “sustainable over time” by funding it as an endowment fed from lottery reserve funds. He called it “strategically redirecting existing resources.”
“Net cost to the state, zero. Net impact on our future, priceless,” Haslam said.
As for the coming budget, Haslam acknowledged revenue collections over the past several months have not met projections. He said his proposed spending plan “reflects that reality.”
In the current budget cycle, the state has collected about $176 million less than anticipated when the legislature approved the budget last year.
The proposed budget for next fiscal year is $32.58 billion, about $64 million less than he suggested last year. The legislature ultimately approved spending $32.8 billion in 2013, the largest budget in state history and roughly $100 million more than Haslam asked for at the beginning of the year.
“This year’s budget is a conservative one,” Haslam said.
Despite lackluster revenue collections, Haslam said he does not regret the tax reductions he and the General Assembly have initiated over the past few years.
“As revenues have come in below expectations, some have questioned whether cutting taxes was the right thing to do,” Haslam said. “The short answer: Yes. Part of being customer-focused is to return taxpayer money when we can. Working together, we have cut taxes in a methodical, thoughtful way.”
He said phasing out the so-called “death tax” and lightening the burden of the Hall Income Tax on the elderly “will actually create more revenue in Tennessee over time.”
Haslam said Tennessee has lately employed “one of the best tax strategies of all time: common sense.”
On the issue of the day that is most dividing Democrats and Republicans, expanding Medicaid under the Patient Protection and Affordable Care Act, Haslam was noncommittal. He said the issue of whether to accept a massive injection of “Obamacare” dollars into the state to expand Medicaid “has been politicized on both sides.”
“I believe that more Tennesseans having health care is good for our state,” he said. “My concern has been that the federal government isn’t giving us the tools to do that in a cost-effective way or in a way that will ultimately impact the health of Tennesseans for the better.”
Haslam reiterated his oft-stated preference for coming up with a plan that covers more people “in a sound way that the state can afford.”
However, he stopped short of either putting forward a definitive plan that would need to gain approval from the Republican-controlled General Assembly or, conversely, declaring Tennessee officially uninterested in acquiring anything the Obamacare has to offer.