Gov. Bill Haslam tweeted on October 3, 2013: “Teachers are the key to classroom success and we’re seeing real progress. We want to be the fastest improving state in teacher salaries.”
The first hint that being fast-improving might take some time came in the Governor’s 2014 budget presentation, when he proposed a 2% pay raise for the state’s teachers. By way of comparison, Kentucky’s Governor also proposed a 2% raise for his state’s teachers. It’s tough to be the fastest improving when you move at the same rate as your competition. It’s like being down 40-30 at halftime of a basketball game. Then, in the second half, you match the other team and score 40 points. You end up losing 80-70. To be fastest-improving, you have to score more points, but maybe Haslam’s not a sports fan.
Then, comes yesterday’s news that Haslam’s budget is facing trouble because state revenues are down. So, surely he’s going to focus on keeping those all-important teacher raises and commitment to K-12 education, right? Wrong. Haslam is balancing the state budget by denying promised raises to teachers and state employees and ditching his proposed increases to higher education. What’s worse, Haslam’s Commissioner of Education convinced the state Board of Education to mandate that Tennessee school districts adopt differentiated pay scales. The 2% increase in salary money available to districts was to help them meet this goal. Now, the districts still face the mandate but will lack the state support to make truly meaningful change.
Below Mississippi? The Tennessee Education Association was quick to jump on the proposed cuts as unacceptable. Citing research by the National Education Association, the TEA notes in a press release that Tennessee will now invest less per student than Mississippi. According to the research, Tennessee’s per pupil investment is 45th in the nation and below every neighboring state but North Carolina. TEA President Gera Summerford said, “In order to attract and retain the best teachers, it is critical that the state properly fund teacher salaries.”
Where’d the Money Go? Governor Haslam blames the $160 million hole in the budget on lower than expected corporate taxes. However, no mention is made of the $46 million in lost revenue from a 1/2 cent decrease in the state portion of the sales tax on food. While removing or reducing the sales tax on food is a laudable goal, doing so without finding revenue to replace it is irresponsible. The sales tax on food is the most reliable portion of state revenue. Additional revenue is lost by the gradual phase out of Tennessee’s estate tax, previously impacting estates over $1 million. The plan is to phase that out entirely by 2016, with an estimated revenue loss of around $30 million this year and around $97 million in 2016-17′s budget. So, that’s roughly $76 million, or close to half of the projected shortfall for the upcoming budget cycle. To his credit, Haslam says he wants to hold off on efforts to repeal the Hall tax on investment income – a tax paid by a small number of wealthy Tennesseans with investment income. However, he has also said reducing or eliminating the Hall tax is a goal. Phasing out the tax, as proposed in legislation under consideration this year at the General Assembly, would mean a loss of $20 million in the 2015-16 budget year and an ultimate loss in state funds of $160 million a year and in local revenue of $86 million a year.
Other options? It’s not clear, what, if any other options were considered. In Kentucky, Governor Steve Beshear proposed a budget that included 5% cuts to most state departments while raising teacher pay and increasing investment in K-12 education. So, while his state faces a tight budget situation and difficult choices, he chose to put forward a budget that increased spending on public education and invested in Kentucky’s teachers, who are already better paid than Tennessee’s. The Kentucky General Assembly passed a version of that budget this week. Tennessee’s General Assembly may make changes to Governor Haslam’s proposals, of course. But it’s difficult to claim that Bill Haslam is putting education first. Of course, that tweet back in October could also have been a set up for a rather cruel April Fool’s Day joke. For more on Tennessee education politics and policy, follow @TNEdReport