Jan 02 2014

A “must watch” for all Tennesseans

Posted by Steve Ross in State Politics

Investigative reports can play an important role in understanding what’s going on behind the scenes in business, government, or any institution, but it ain’t cheap. Media outlets, especially TV outlets have fewer resources and smaller staffs to do these kinds of things.

Watching NC 5’s “A Question of Influence” is not only important for people all over Tennessee…so they can see what’s happening behind the scenes, its also important to reward them by watching it at their website.

Doesn’t cost you a thing.

Here’s part 1. Go check out the other 6 parts at their website, and get your learn on.

Happy new year.

NewsChannel5.com | Nashville News, Weather

Jul 09 2013

Is Haslam running government like a business?

Posted by Steve Ross in corruption, State Politics

TN Gov’t Contracts 101: Question 1. Are you a friend, friend of a friend, or paying a friend for counsel?

Back in 2010, when Gov. Haslam used millions of his personal wealth to win both the GOP primary and eventually the general election, a constant theme was that he would “run government like a business”.

Now, anyone with half a brain in their head should have looked at this promise pretty skeptically. Its just like any other promise a politician makes, subject to change based on future events.

And while the notion of “running government like a business” may seem like a good idea, 2010 was just two years after businesses…really big businesses…essentially tanked the economy by screwing over people who just wanted to own a home.

So, maybe we didn’t ask the right question at the time. Maybe we should have asked, “What kind of business?”

Of course, a fawning media, ready to crown a victor well before the election, didn’t help with the questions. They were falling all over themselves to use every adjective they could to make Haslam seem inevitable.

30 months into this term, the shine is starting to wear off with the media, and problems both inside and out of his administration have more than a few observers wondering about the Governor’s decision-making and the patronage system that has emerged.

Lead by the Legislature

Riding a wave of Republican victories across the state, Gov. Haslam was inaugurated with a newly ensconced GOP led House and Senate. While the Governor was just getting settled in, the legislature went to work, removing collective bargaining for teachers, instituted a photo ID bill for voting, and passed a bill allowing corporate contributions to political campaigns, among other things.

By the end of the 2011 session, many on both sides of the aisle rightly asked who was in charge of the state…the Governor or the Legislature? By 2012 the Governor started getting his sea legs, even if the legislature continued dragging him further to the right than most thought possible.

A post-mortem of the Gov.’s second year in office, noted that Haslam had a hard time reigning in the far right elements in the legislature. In the days following the end of the 2012 session, a slew of articles noting both the secrecy of the legislature and the Executive Branch intent on keeping information about the workings of government from the people, under the guise of “privacy”. One such effort sought to shield the owners of companies from public disclosure of their receipt of cash grants from the state.

All of these things led to the state being saddled with the dubious distinction of having the worst State Legislature in the US in 2012, and led to many questions, including those wondering if Gov. Haslam would ever live up to his “moderate” public image?

Apparently, the Gov. had other things in mind…like fulfilling the worst fears of what “running Government like a business” can be.

Patronage and personal interest

With the passage of the TEAM Act, a bill that radically changed the way Civil Service jobs are awarded, and which led to the hiring of what one writer called his patronage chief, Larry Martin, the nature of that “business climate in government” began to emerge.

Martin, who retired from First Tennessee Bank in 2006, also served as Chief of Staff for the Haslam Administration in Knoxville. While its not unusual for a political appointee to follow an executive from one place to another, Martin’s connections to the Haslam family are deeply rooted.

Both Jimmy Haslam and R. Brad Martin (U of Memphis interim president and chief Pilot internal investigator) served on the First Tennessee board while Larry Martin was COO of First Tennessee’s Financial Services division.

Another Haslam staffer, Mark Emkes, a Director at First Horizon (Parent Co. of First TN) became Director of Finance and Administration until he retired recently and was replaced by Larry Martin.

While the tangled web of business friends of the Haslam family that litters the upper echelon of the Haslam Administration is interesting, I’ll leave that for a future post to deal directly with the personal interests that have been rearing their ugly head for months now.

In June, a committee tasked with oversight of state contracts deferred the review of a contract for the Dept. of Corrections, that was awarded to a company employing the wife of Correction Commissioner Derrick Schofield…and cost the state $15m more.

This same group was also exploring looking into contracts offered to Enterprise Rent-a-car and Bridgestone, the latter formerly headed by recently retired Director of Finance and Administration, Mark Emkes.

But it doesn’t end there.

The Governor recently awarded a $330 million contract to a company he listed on his disclosures as an investment, one of the scant few I might add. He also signed a law that benefitted a business buddy in Gatlinburg and says he’s unconcerned about a coal company that has ties to his family business.

All of this leads us to a report from NC5 yesterday that alleges inside dealings on contracts by Tom Ingram, who, until recently was paid privately by the Governor.

This after several administrative problems involving child deaths at DCS, and the rewards totaling $1m that went to the TN Dept. of Labor after misspending $73m of unemployment money, which ultimately led to the Governor seeking cover behind newly appointed State Chief Operating Officer Greg Adams.

Apparently, “running government like a business” in part, at least, means placing layers of folks between you and government so you don’t really have to take responsibility for governing.

Cloudy skies ahead?

Of course, this is going on while the FBI and IRS are investigating the family business. An investigation that, while not directly connected to the Governor yet, certainly puts a pall on the overall outlook for Tennessee’s first family.

Which brings me back to something I said at the beginning…just what kind of business did candidate Haslam intend to model Tennessee government after?

While the jury may be out on that question as a whole, the evidence is pointing to the same kind of crony capitalism that brought down the banks in 2007-08 and is causing his family business all kinds of trouble right now. The kind that works with its friends at the expense of everyone else.

And while the Governor has enjoyed a certain measure of teflon like “unstainable” status in public opinion, one has to wonder how many scratches that surface can withstand before the public turns their back on the Governor.

What should be even more troubling for the Governor is that while he’s taken some dings to his image, the investigations into poor management and potential misdeeds in his administration are just beginning.

And just like most things, the bandwagoneers in the media will eventually jump on this en masse to do the thing they like doing more than building someone up…taking them down.

Feb 02 2012

Why Would Anyone Want to Teach in Tennessee?

Posted by Steve Ross in State Politics

Track HB 740 here

This is a question I keep asking myself as bill after bill slides right through the state legislature.

Teachers Should be Angry
via Principal Principles

Last year it was the right to have a seat at the table when negotiating salary, class sizes, and all sorts of other things. This year its tenure and perhaps most egregious, payment of student loans.

I have student loans. So does just about everyone I know that has graduated from college in the past 20 years or so.

Quite honestly, you can’t go to school, even with scholarships, without some kind of loan unless your parents have the money to pay for school outright…which is a very small minority of people.

Student loans, like every other kind of loan, are a contract between the institution loaning the money (often backed by the Federal Government) and the individual requesting the loan. Like all those other loans, there is a process by which the lender can seek relief if the individual is not paying their loan back. Garnishments, court, you name it. They have ways to get paid.

So I’m kind of stunned (though I probably shouldn’t be) that members of the state legislature are seeking to decline, suspend, or revoke the licenses of teacher if they haven’t kept up with the student loans. I mean, wow. That seems unnecessarily punitive to me.

I’m curious to know how the sponsors of this bill expect those student loans to ever get paid if the people can’t work, but I’m even more curious to know where it will stop.

Will teachers also lose their license for defaulting on a car loan? Paying their credit card bill late? What about the cable bill? I know there are a lot of legislators that collected a pretty penny in donations from ATT when they were pushing their cable service legislation up there a few years ago. Will people get effectively fired for not paying for their uVerse bill?

Tennessee is in the middle of the pack in terms of starting teacher pay (22nd by my count), and 33rd in the nation by average salary. What’s more, because the state government funds education so shabbily (we’re 46th in the nation) most teachers have to spend thousands of dollars of their own money to get the things they need to adequately equip their classrooms.

Considering the average starting salary for a teacher in the state of TN is around $32,400, by the time you take out taxes, school supplies and living expenses there isn’t all that much left for repaying student loans.

This is a choice the Tennessee legislature has made, to be the fourth lowest funder of education in the United States, which, in turn, impacts teacher salaries, equipment, as well as other resources in the educational system and student achievement. Now they are choosing to insert themselves in the personal finances of teachers and punish them if they can’t make it with the meager amount of money they appropriate to education.

At this point it should be fairly clear that the enemy is not what they’ve told us it was. Last year the boogey man was Teacher Unions. We were led to believe that the General Assembly, upon slaying that dragon, would actually start working on real things like increasing educational investment, or working to improve the quality of the overall school environment. But no, this bill directly attacks the teachers themselves, as individuals, not some disembodied third party.

The enemy of this GOP controlled legislature is Teachers and its time for Teachers to start fighting back.

Jan 31 2012

$15,000,000 For Fewer Than 900 People a Year

Posted by Steve Ross in State Politics

$16k savings per fabulously rich dude.

For as long as I can remember, Republicans have been kicking and screaming about the “DEATH TAX”, also known as the inheritance or estate tax.

The estate tax is one of those taxes you hear about a lot, but probably won’t ever have to pay, unless your family is fabulously wealthy. Even then, there are ways around it, and the people that most likely have to deal with it have the money to hire lawyers and planners to help minimize the exposure to the tax.

Nonetheless, this is an issue that has captured the talking-points of Republicans and some Democrats since the dawn of the Republican Revolution. Citing the harm that could befall family farms and others, the specter of the estate tax has been used as a means to scare the dickens out of people that will most likely never have to deal with it.

So, its no surprise that in yesterday’s State of the State address, Governor Haslam proposed to cut the estate tax by $15m by raising the exemption from $1,000,000 to $1,250,000.

A quick look at the rules and regulations regarding the inheritance tax, as it is called in Tennessee, shows a graduated rate for estates of $1,000,000 and above. Basically, anything over $1.5m and you’re paying around 10% on the inheritance over $1,000,000. If you inherit an estate, in full or part, that is worth less than $1,000,000, you owe nothing in both state and federal estate taxes (though you may still have to file to prove that, consult a tax attorney to be sure).

That sounds like a lot of money, but the reality is, if your parent’s estate is worth $2m, and you have a sibling, you’re in the clear up to $2,040,000. You can do the math from there to see how many brothers, sisters, cousins, and ne’er-do-well hangers on you might need to avoid this tax depending on the size of your family’s estate.

One thing that no one really talks about is how many people the estate tax really impacts. I mean, we’ve been hearing about this thing for so long, and with such vitriol, that one might think its a whole bunch of people.

So I decided to call up the TN Dept. of Revenue and ask them just how many people actually pay the tax every year for the past three fiscal years. The individual on the other side of the phone didn’t have an immediate answer, so I gave him my email address and a couple of hours later, I had an answer.

The verdict: less than 1000 each year, or about .01% of the 6.8 million people in Tennessee every year.

Here’s how it breaks down.

Fiscal Year
Returns Filed
Tax Collected
Average per Filer

We make money the old fashioned way, we inherit it.

Now someone out there is going to say that any amount is too much. Ok, you can believe that, but they’re also the same people that complain when roads aren’t paved, or the line at the DMV is too long, or the trash doesn’t get picked up…as if that’s magical or something.

The long hard reality is that people don’t pay anything on the first $1,000,000 they inherit. So if the average is about $112,000 per filer, each year, then these folks are inheriting more than $2.1 million dollars, which means they’re really only paying about 5% or less of their total inheritance in state taxes.

But we’re looking at the average here, when in reality we should probably be looking at the median. I didn’t ask what the median was. I’ll leave that up to some intrepid reporter that’s actually getting paid to research this stuff, but I’m pretty sure the median is going to be a lot less than this $112,000, with a few, very fortunate souls skewing the average with very large inheritances.

So who is really paying the tax…I mean, the bulk of it. Folks inheriting a whole lot more than most of us will ever make, see, or have any kind of access to.

This is billed as tax relief, and I suppose it is, on some level. But this is not the kind of tax relief that’s going to impact…well…anyone but the 1000 or less most fortunate people in Tennessee.

So, is this really tax relief? No, this is wealth relief.

Sep 15 2011

Good Luck Elizabeth Warren

Posted by Steve Ross in elections, National Politics

I know I’ve been writing about the importance of local elections lately, despite appearances, this post is no different. No, Elizabeth Warren isn’t running against Bob Corker, she’s running against Scott Brown, or whomever gets the Republican nomination in Massachusetts, assuming, of course, that she gets the Democratic nomination in the state. I won’t be able to vote for Elizabeth Warren, because she seeks to represent a state that is around 1300 miles away. I support her run, and wish her luck. She’d be a great addition to the Senate in my view.

That said, I won’t be sending any money up to Massachusetts. I probably won’t be phone banking for her (I doubt Massachusettsans would appreciate my southern drawl), and I damn sure won’t be traveling up there to canvass for her. Not only can I not afford to do it financially, I can’t afford to do it electorally. There’s plenty to do here in Tennessee.

The whole reason this is happening is because of a local election, in Massachusetts. Scott Brown won the special election on that cold January day in 2010 by just under 110,000 votes, after the death of Ted Kennedy. Just over 2.2m votes were cast in that election. Counties in the state were evenly split, 7-7.

By contrast, in the 2008 election, Obama won the state overwhelmingly, carrying all 14 of the state’s counties. The 2008 election brought out nearly 900k more voters than the 2010 election, which really shouldn’t be all that surprising considering 2010 was a special election right after the New Year.

So what happened in this characteristically “blue” state that sent what should have been a very safe seat to the Republicans? It’s not about how many people showed up, but who.

There are over 4.19m registered voters in Massachusetts according to their Secretary of State. In 2008, 3.1m of them showed up or 73.52% of all registered voters. That’s a pretty darn high voter turnout. In 2010 only 2.2m, or 53.66% of voters made it to the polls which is about average, though above average for a special election. That 900k voter difference is very close to the difference between Obama and McCain in the 2008 election.

In fact, Scott Brown got more votes in 2010 than McCain did in 2008, but just by about 23k votes. That number is significant, not because it represents crossover votes, though there may be some of those, but because it gives us a little idea about voter mood, and activation.

Massachusetts has party designations. 36.65% of the state’s voters are Democrats, 11.34% are Republicans, leaving 51.44% undesignated. The number of registered Democrats alone would have been enough to beat Scott Brown, but, for whatever reason, they didn’t turn out.

There are likely a lot of reasons that happened, but I don’t claim to have a hill of beans worth of knowledge about Massachusetts elections, except that I know they go Democratic more often than not. Further, I don’t remember much about this election except for Scott Brown’s picture in GQ or whatever that was.

What I can tell you is that there aren’t enough Republicans in Massachusetts to win an election. There are almost enough Democrats alone to win any election. Throw in the folks who don’t take a designation, which by all accounts is probably mostly Democrats who don’t vote in primaries and Democrats should have an easy ride in the state.

So how did he win? Fire in the belly. Not his fire mind you, the Tea Party’s fire. Remember, this was one of the first, if not the first real election after the ascension of the Tea Party to the status of media darling.

via Applesause @ the Rockford Register Star

This is pretty high turnout. I’m sure, based on past elections, and special elections in particular, the Coakley campaign reckoned they’d need a little over a million votes to win. Guess what? They got that million votes. What they didn’t count on was an insurgent group of people who were mad as hell at government taking over their Medicare (which is still my favorite Tea Party sign).

So, Democrats didn’t turn out in the numbers they needed to, Republicans dragged people to the polls and won. I’m sure there’s more to this like Coakley’s popularity statewide and some other stuff that’s more important than I’m making it, but my real point is this. If Coakley had been shooting for 1.2m or 1.3m votes, she’d have won, pure and simple.

Looking back home to Tennessee, we’ve got a lot more challenges than they do in Massachusetts. We’ve got a Republican majority in the State legislature. We’ve got a Republican majority in our House delegation, and don’t get me started about our Senators. We’ve got a lot of work to do to close the gap for Democrats here, so I’m probably not going to spend a lot of time trying to help someone else 1300 miles away, even though it would be cool, and if I lived about 800 miles closer, I just might go out of my way to help.

And sure, Warren has shown herself to be a good progressive at the very least, and for that I support her, but I can’t give her anything more than moral support. If progressives or liberals in this state spend all our time building up progressives and liberals in other states, when will we get around to building up the few progressives and liberals that dare run for office here? Better still, how will we find more of them to run?

Truth be told, it’s not as though these people don’t exist. They’re out there, right here in Tennessee, and not just in the urban areas. They exist, but they don’t think they can win, and that is reinforced by folks who talk about how the state is this or that or the other and how no one is on “our” side, even though that “side” be ill defined.

Nope, I’ll be working to find these people and encourage them to get involved in campaigns, and network, and build the kind of support base that is required to even consider a serious run at anything. Maybe they’ll be candidates for County office. Maybe they’ll run for state office. Honestly, I don’t know, but I’ll be spending my time building what I can here, rather than exporting my time and money to Massachusetts for an election that will likely be nationalized anyway.

Does this mean I expect to see more people like me in the legislature in 2013? Nope. This takes more than one cycle to build. But if we don’t start building instead of complaining, it’ll never happen.