Looking Ahead For Full Potential
by Governor Bill Haslam
As we enter the last year of our administration, I hope we will not lose sight of how far we have come and what we did to get here.
When we took office in 2011, we faced big challenges. We had a billion-dollar hole in the state budget. The Great Recession had wreaked havoc on our economy. Our state’s unemployment rate was nine-and-a-half percent, and we had some counties where it was 25 percent.
The U.S. Chamber of Commerce had given us an “F” in truth-in-advertising, saying our K-12 education standards were too low. While we were claiming that 70 percent of our students were proficient at grade level, when our high school graduates arrived at college 70 percent of them needed remedial courses.
In 2011, we had a Rainy Day Fund that had served its purpose but was depleted. We had good roads and bridges but a worsening ability to build new ones and repair old ones. We rewarded state employees not based on the quality of their work but based on how long they had been on the job. We believed we could compete with the best states in the nation, but we had to do more if we were going to become the Tennessee we can be.
So what did we do? The budget demanded that we take a hard look at our departments, but it also presented an opportunity to drastically overhaul state government. We had each department do a top-to-bottom review. The Tennessee Excellence, Accountability and Management (TEAM) Act has allowed Tennessee to right-size state government. We’re 10 percent smaller now with vital programs run by highly skilled state employees. Our departments are returning tens of millions of dollars a year to the general fund.
We took a strategic approach to business recruitment, moving away from non-transparent tax credits and focusing instead on grants that are a better long-term investment for the state. Workers’ compensation and tort reform brought much-needed predictability to our business climate. The IMPROVE Act cut taxes for manufacturers with the knowledge that for every one manufacturing job there are typically three that come behind it.
In traveling across the state and talking to businesses, the conversations quickly turned into conversations about education. National experts projected that by 2025 more than 55 percent of jobs in Tennessee would require a postsecondary credential. So we created the Drive to 55, knowing that if we didn’t change the jobs would go elsewhere.
The Tennessee Promise and Tennessee Reconnect programs are game-changers for our state. We changed the conversation for families around kitchen tables because we removed cost as a barrier to higher education. Now we can say that everyone can go to community or technical college free of tuition and fees. Our six state universities that were formerly part of the Tennessee Board of Regents now have local governing boards.
In K-12 education we did three big things. We now have higher Tennessee standards. We tied our assessment of students to teachers’ evaluations and the evaluations to tenure. And we lifted the cap on charter schools.
So what are the results of all these efforts so far? We have the third lowest taxes in the country as percentage of personal income. We have the lowest debt per person in the country. Our Rainy Day Fund is at $800 million dollars, the highest it has ever been. For only the second time in our state’s history, we have a AAA bond rating from each of the three bond rating agencies.
The TEAM Act has made state government more responsive and we’re giving better customer service than ever before. This month Governing magazine asked its readers, “Can Other States Tap Tennessee’s Secret Sauce for Government Efficiency?”
So we have better service while we have cut more than $500 million in ongoing expenses out of our budget. We’ve cut taxes by more than $500 million, including the sales tax on food by nearly 30 percent. Through the IMPROVE Act we can provide for the next generation’s transportation network and help answer our state’s very real transportation needs.
The last two state budgets take on no new debt – the first time that’s ever happened. Unemployment is the lowest we’ve ever recorded at 3 percent, more than a full percentage point below the national average. We’ve added close to 400,000 jobs in the private sector. Tennessee students have posted the highest graduation rates in our state’s history. We’ve added more than $1.3 billion to K-12 education, with nearly $450 million of that going to teacher salaries. Tennessee students are the fast improving students in the nation.
Let’s not forget how we got here. I worry about us getting soft and losing that focus. As we look ahead to 2018, don’t let us lose sight of the Tennessee we can be. Help us stay focused on each challenge, and we’ll continue the hard and necessary work to reach our full potential as a state.