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May 29, 2007

Bredesen Administration Seeks End to Budget Safeguards

tnflag.jpgThe Bredesen administration is trying to gut the Tennessee Government Accountability Act, passed just five years ago to add "performance-based" budgeting standards to the budgeting and financial operation of state government.

State Sen. Jim Kyle, who carries the Bredesen administration's legislative agenda in the state Senate, is pushing Senate Bill 2336, which would do away with the "performance-based budgeting" safeguards put into the state budget process just five years ago at the end of the political battle over the proposed state income tax.

Apparently, Sen. Kyle and the Bredesen administration want to make it more difficult for taxpayers to see how much they are paying for state government, and what the money is being spent on. A.C. Kleinheider has the details, the video, and the links to the legislation.

Sen. Kyle is the Senate Democratic Leader and carries the administration's legislation in the senate. The legislation is being carried in the state House by state Rep. Gary Odom, D-Nashville, who as House Majority Leader carries the administration's legislation in the House.

Among the budget procedures Kyle, Odom and the Bredesen administration want to eliminate is the requirement that a separate section of the budget set forth the anticipated revenues of state government from taxes levied by the state and the requirement that the budget present in this separate section all proposed expenditures of state-levied taxes.

That's just one of numerous retrograde provisions in what is a really bad piece of legislation. The legislation's summary lists a host of important budget safeguards that would be obliterated if Kyle's legislation passes intact, including...

  • Repeal the requirement that the commissioner of finance and administration report quarterly to the joint committee on finance, ways and means all out-of-state travel by citizen members of boards and commissions.

  • Repeal the requirement that the commissioner or head of each department, institution, or agency within the executive branch of state government establish written goals and objectives for each program within the commissioner's department or agency and submit the goals and objectives to the commissioner of finance and administration for approval.

  • Remove the requirement that a separate section of the budget set forth the anticipated revenues of state government from taxes levied by the state and all proposed expenditures of state-levied taxes.

  • Remove the requirement that the budget include a statement of the bonded indebtedness of the state government.

  • Removes the prohibition on the appropriations bill containing any provisions of general legislation.

  • Eliminates many performance-based budgeting requirements and provisions relating to performance measure; this bill does not.

  • Remove all references to performance-based budgeting in the Tennessee Governmental Accountability Act, which was enacted to establish a system of strategic planning, performance-based budgeting, and performance audits.

  • Among the changes the Kyle legislation would makes to the Governmental Accountability Act, it would:
  • Eliminate the requirement that an agency submit with its budget request program performance measures and standards and other specified program documentation (such as identification of users of the program and the purpose of the program).

  • Remove the requirement that performance-based budgeting apply to all state departments, agencies, boards and commissions.

  • Remove a provision that expressly gives the general assembly final approval of all strategic plans, performance measures and standards; and discretion to increase, reduce, eliminate, or otherwise alter the appropriation to a state agency.

  • Eliminate a provision of present law that prohibits agencies from amending or establishing programs or performance measures without approval of the commissioner.

  • Eliminate a requirement that the commissioner develop a schedule for including state agencies within performance-based budgeting and review.

  • Eliminate a requirement that the judicial department identify programs that could operate under a performance-based budget program.

  • Eliminate a requirement in present law that the Tennessee governmental accountability commission submit comments on the performance report submitted by the commissioner of finance and administration on state agency compliance with strategic plans and performance-based measures.

  • Exclude the state's University of Tennessee system and other public university, colleges and community colleges, from the Tennessee Governmental Accountability Act, even though they receive and spend hundreds of millions of your tax dollars.

    Although it is obvious the bill is an administration bill, given that Kyle and Odom are carrying the legislation, I have emailed Bredesen's press secretary to confirm that SB 2336 is an administration bill and has the support of the Bredesen administration.

    Update: House Republican Caucus press secretary Kara Watkins emails: "I just saw your post--and I just thought I would let you know that Senate Bill 2336/HB 2358 IS an Administration bill. It's been on the move, with relatively no barriers, until Norris managed to slow it down a bit. But I just thought I would let you know that it's an Administration bill."

    It was obvious that it is.

    The question now is, Why does the Bredesen administration want to strip performance-based budgeting out of state law and gut the Tennessee Governmental Accountability Act?


    Comments

    It will be especially interesting to see how this bill changes or fails to change TDOT. TDOT has already submitted a Long Range Transportation Plan to the Federal Highway Administration. Part of the reason for that is to get coherent planning going nationwide and eliminate the state politics in road construction. This legislation seems to want to put the politics back in at the state level. Senator Doug Jackson has called that, in the past, "constituent service."

    Performance based standards are a clear and present danger to road construction that has as a primary purpose of economic development. Over time, performance based standards using safety and financial criteria (how do you pay for it)have a potential for evolving into objective standards that lay a foundation for better transportation decisions.

    Federal support for economic development motivations for building highways has been on the decline since about 2005 and after it was noticed by economist in the Federal Highway Administration that most anecdotal stories of highway cornucopias at every road project are greatly exaggerated by counting the hits and ignoring the misses.

    Many of the alleged hits were just income and business activity transfers from one spot to another and resulted in a net small or no gain. Also, federal support and programs for road construction with economic development motivations is held back by federal regulations on program economic efficiency that were put in place by the Clinton Administration circa 1994. They can watch a state do stupid things with their own money but they can not suggest programs or support doing things that fall outside of the federally prescribed envelope of benefits versus costs.

    It is obvious that the legislature pays little or no attention to any planning document that TDOT makes and puts out to the public. The one that TDOT produced in 2005 had numerous pleadings and scenarios for additional ways to increase the gas tax and registration taxes, including putting fuel tax increases on autopilot by indexing. The document had a planned shortfall of over $2 Billion dollars, more than a years worth of transportation income, between 2008 and 2015. The projections of income made then have so far been disastrous overestimations.

    In spite of TDOT's faltering real inflation adjusted income since 2003, the legislature has no concept of the pending shrinkage of financial capacity to satisfy asphalt pork projects. A road not only has to be built but also maintained. On a per mile basis, Tennessee roads are making less and less money every year because of expansion of speculative road projects that have low traffic counts but high economic development expectations. Fixing congestion would mean lowering the per mile income even more in the cities.

    Just looking at the legislative hopper since the first of the year causes one to believe that TDOT exists solely for the provision of special projects for certain legislative districts. Every county seat seems to have a right to a four lane connector to the Interstate. By a three to four vote the Senate Transportation Committee killed a bill that would give Perry County(less than 8000 people) a County Road Connector Road ahead of schedule for only three easy payments of $51,700,000 per year for three years. Montgomery County seems to need a pedestrian bridge and five other road projects that TDOT forgot about too. The NAFTA Highway fiasco takes too long to discuss.

    Federal Law has put the local politicians in at least partial control of the transportation agenda at TDOT through the system forced on all states called the Metropolitan Transportation Planning Organization and the Rural Transportation Planning Organization. TDOT has totally failed to control the zeal for economic development projects in the Southeast Rural Transportation Planning Organization. It is now your right to have a four lane paid for by everyone else but you.

    By federal law, the MPO decision making process is suppose to be "financially constrained." This means working within a fixed amount of resources and making choices among alternatives. Allowing the Tennessee Legislature the ability to break out of any financial constraint and order by legislative fiat a program with little or no sense of economic consequences was not what the Federal Congress had in mind.

    Worse yet is the decay of discipline within the RPO structure. The voting members of the Southeastern Rural Transportation Organization, mostly county executives and mayors, have rebelled against TDOT's decision to kill Corridor K in 2003 and have put on the full court press to "get 'er done." There is no sign that anyone in the legislature, TDOT or the Planning Organization that the cost of this 44 mile monstrosity would be $1.5 Billion dollars. That is more than TDOT can reasonably expect to earn in a year and a little over a fourth of that is suppose to go to counties and municipalities for basic preservation of the existing system.

    Posted by: Danny L. Newton at May 30, 2007 12:17 AM
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