Lawmakers could vote Thursday on spending bill

NASHVILLE — Tennessee legislative leaders hope today to move the state’s spending plan for the upcoming year out of House and Senate Finance committees and have it ready for final floor votes Thursday.

“It’s in fairly good shape,” Senate Speaker Lt. Gov. Randy McNally, R-Oak Ridge, said Tuesday. “I can only speak for our side, but it seems to be coming along fairly well.”

House Finance Committee Chairman Charles Sargent, R-Franklin, told GOP Caucus members he hopes to do the same in the lower chamber.

But the chairman spent much of the meeting seeking to address some members’ concerns about the state busting the “Copeland Cap,” a 1978 amendment to the Tennessee Constitution.

The nickname comes from former Rep. David Copeland, R-Collegedale, who successfully advocated for the amendment.

The provision, Article II, Section 24 of the state Constitution, says: “In no year shall the rate of growth of appropriations from state tax revenues exceed the rate of growth of the state’s economy as determined by law.”

That’s determined by per capita income. Given this year’s budget surplus — about $1.1 billion in one-time money and close to $1 billion in recurring funds — it’s an issue.

But the Copeland Cap allows lawmakers to exceed that by approving so in a stand-alone bill. And that’s what Republican Gov. Bill Haslam and leaders plan to do.

It authorizes state spending to exceed growth in revenues by $438 million or 2.85 percent. During the discussion with Sargent, some members asked whether they could simply cut spending by nearly a half billion dollars.

Sargent said that because the cap would only be exceeded in the current Fiscal Year 2017 budget, which ends June 30, those cuts in less than 60 days would

be dramatic. And he told those raising the issue that it should be up to lawmakers to find the cuts.

But the chairman said an even more fundamental problem is that by simply recognizing the surplus, the cap is busted. That would happen even if lawmakers slashed spending or stashed the entire amount in the state’s Rainy Day Fund.

Several lawmakers later said they wanted to think about that.

The budget as presented is about $38 billion, which includes not just state revenue but federal funds, higher education tuition and fees, and various fees from independent agencies.

In other action Tuesday:

› The House Government Operations Committee moved through a package of various agency rules known as the “omnibus bill.”

One involves a Haslam Revenue Department rule that seeks to compel remote-sellers without a physical presence in the state — catalogue companies and internet retailers — to begin collecting Tennessee state and local government sales taxes. Two pre-internet commerce rulings by the U.S. Supreme Court forbid that.

But encouraged by Justice Anthony Kennedy’s remarks a few years back in a related case that it was time for the nation’s high court to revisit the remote seller issue, states are passing or enacting rules in an effort to push the issue back into federal courts and ultimately back before the Supreme Court.

Rep. John Ragan, R-Oak Ridge, questioned the state Revenue Department rule, citing the previous Supreme Court rulings and noting that the U.S. Constitution grants the federal government authority over interstate commerce.

Ragan also noted lawmakers’ oath of office requires them to support the U.S. Constitution, although state lawmakers often criticize it and sometimes pass state laws found to violate it.

While not attempting to strip the remote sellers rule in committee, Ragan indicated there could be an attempt on the House floor.

› House Government Operations Committee members also approved with a neutral recommendation a bill pushed by state homebuilders because of gripes with cities’ stormwater runoff requirements.

The gist of the bill would require the Tennessee Department of Environment and Conservation and Environment, which reviews and approves the permits, to then bring them into the political process and approval by the Government Operations Committees.

“It doesn’t matter what other states are doing,” scoffed Rep. Jason Zachary, R-Knoxville, in response to some colleagues’ challenges of his bill, which would affect Chattanooga, Nashville, Knoxville and Memphis, among other cities.

TDEC Commissioner Bob Martineau warned Zachary’s bill “sets a dangerous precedent.” The department’s permit approval process allows for proponents and opponents to argue for or against merits all while keeping a watchful eye on what can pass muster before the federal Environment Protection Agency, the commissioner said.