Phil Valentine's Address To The Tennessee Senate Finance Committee
November 16, 1999

Members of the Senate Finance Committee:

Thank you for the opportunity to address you this morning. Some of you may see me as the bane of your existence after several weeks of non-stop telephone calls, faxes and e-mails. The Governor and some in the General Assembly have laid the blame for the outrage of the proposed income tax at the feet of talk radio. I wish I could wield such influence but I have merely served as a conduit through which the desires and frustrations of the citizens of Tennessee have flowed.

My job is not unlike your own in that I work each day to serve my constituents and give them what they want. In my case, that product is information. If I don't give them what they want they, in essence, vote me out by changing to another station. Like you, I talk to my constituents on a daily basis. Not just on the radio but at countless Rotary Clubs and Kiwanis Clubs. At schools reading for kids or at remote broadcasts, I get an earful. While there are, I'm sure, some talk show hosts who shoot off their mouths first and ask questions later, just as I'm sure there are politicians who do the same, I can assure you that I am not one of them. When Governor Sundquist first unveiled his 1999-2000 budget back in March, I questioned if we shouldn't first look at ways to trim the budget before raising taxes. He challenged me to do just that. I would venture to say that I'm probably the only member of the media in this state who took the time to pour over the entire budget, something most members of the General Assembly probably didn't do. I looked at expenditures as they related to, not only the previous budget, but to budgets going back several years. What I saw was an expansion of government from 1992 to 1999 by 58 percent. By going back just two budgets, I took the 1997-1998 budget and increased spending by 3 percent per year, which was about twice the rate of inflation. I took into account the increase in employees and included their salaries in the new budget. By just slowing the growth of state government to twice the rate of inflation, I found a savings of $1.4 billion. I'm not so naive as to think that there aren't legitimate reasons for some of the increases but I find it hard to believe that government needs to grow as fast as it's grown.

By now, you've heard from countless experts about the problems with TennCare. You know it needs to be fixed so I won't bore you with my assessment of it here. I want to focus on other ways we can save money. In the course of reviewing the 1999-2000 budget last spring, I found many questionable expenditures. $951,000 for Alex Haley's boyhood home and $1 million for the Country Music Hall of Fame, just to name a couple. It's my opinion that these are not wise uses of taxpayer money. I also found laudable projects which seem grossly overpriced. For example, the cost to renovate just four bathrooms in cottages at the Greene Valley Developmental Center was priced at a staggering $500,000. That comes to $125,000 per bathroom, more than many houses cost in Tennessee. I certainly understand that the center serves some of our special needs citizens. There is no question that we have both a desire and an obligation to take care of these people. I also understand that specially equipped bathrooms are necessary. I even talked to the gentleman who sells them the bathtubs. He informed me that the special tubs cost around $20,000. He estimated the rest of the bathroom to cost no more than another $20,000 placing the total at a high of $40,000 per bathroom. Given this generous estimate, it appears that the state government is being overcharged by $85,000 per bathroom, or a total of $340,000. Other expenditures that I questioned included $450,000 to air condition just the kitchen at the Greene Valley Developmental Center and $510,000 to renovate the kitchen at the Turney Center Prison. There are many more too numerous to name here but the point is, somebody needs to question the price of these projects. We heard last spring that state employees would not be getting raises because of the budget crunch yet there was $20 million set aside for "classification-compensation adjustments" which sounded an awful lot like raises to me.

Part of the cry for an income tax has been to fund higher education. I even ran into several groups of students from UT who were lobbying the General Assembly for more money because they felt their tuition was too high. In my quest to find the truth, I went back and did more research. Tuition at Ole Miss runs $3,054 per year. Tuition at the University of Kentucky runs $3,296. Tuition at UT is just $2,858 per year. According to the Department of Education, UT students pay $651 less in annual tuition than the national average. I also broke out my calculator and reached a startling conclusion. If the average UT student worked just 10 hours per week at $5.50 per hour, he would make enough money to pay for his own tuition, a concept which seems to be foreign to those students walking the halls of the General Assembly with their hands out. That's not counting the summer months when they could easily put in 40 hours per week. Taking that into consideration, they could make enough money to pay, not only their own tuition, but the tuition of someone else less fortunate. I waited tables to put myself through school. Many of you paid your own way or secured student loans which you paid back after entering the workforce. It's not too much to ask the same of this generation.

Speaking of higher education, I uncovered something else while combing through the 1999-2000 budget. I found that ETSU College of Medicine, Austin Peay, Cleveland State Community College, Motlow State Community College, Volunteer State and Walters State all had a decrease in enrollment while the numbers of employees increased as did their budget. I found it very puzzling that these institutions needed more money and manpower to service a shrinking student body.

Let's talk for a moment about K-12 education. The National Education Association ranked Tennessee the 8th fastest growing state in K-12 expenditures between 1986 and 1996. The K-12 budget grew by 88 percent between 1992 and 1999. The Basic Education Program is primarily to blame for this dramatic increase. Income tax proponents claim the BEP is court-mandated. The truth is, the BEP was authorized almost a year before the Supreme Court ruled in Tennessee Small Schools v. McWherter. What the court did was approve the BEP plan but it did not mandate it. It merely required Tennessee to provide equal education opportunities to all Tennessee students. In its decision, the court said "the means whereby the result is to be accomplished is, within constitutional limits, a legislative prerogative." The BEP has become the flesh-eating virus of the budget. It now consumes almost 40 percent of the budget, up from 33 percent in 1992. To put it in perspective, it makes TennCare look fiscally responsible. Ironically, the BEP was designed to help the smaller schools yet it mandates things like class size but only allows local districts to use up to 50 percent of their state money to fund the mandate. The rest has to come from local funding, increasing their local tax burdens. The state is now doing to the local school districts what the state has complained for years that the federal government is doing to it. There are ways to improve schools that don't mean a dramatic increase in spending. K-12 education is one of the last competition-free bastions left in America. Thanks to an overbearing and self-serving teachers union, competition among schools for students is virtually non-existent in this state. Wealthy parents have the means to either move out of undesirable school zones or place their children in private schools while poor families are left with no alternative but to put up with substandard education. The latest report card on schools shows a huge disparity between the many elementary schools right here in Nashville. If the Governor and the General Assembly really want to do something for the children, as they claim, then, for heaven's sake, empower that family whose son is getting a substandard education at his assigned school, and let them take that child and the $5,500 attached to him, over to a school that will get the job done. If you want to do something for the children, make it a mandatory 20 year prison sentence for anyone caught selling drugs within a one-mile radius of a school. If you want to do something for the children, come up with a common-sense approach to education that works instead of throwing more money against the schoolhouse wall in hopes that it will stick.

Speaking of federal mandates, as I was moments ago, that is an increasing problem in Tennessee and one which must be addressed. For instance, the Clinton Administration is proposing 100,000 new police officers and 100,000 new teachers. This sounds great and people are welcoming them with open arms. What most people don't realize is, they come with strings attached. The federal government will only fund them for a couple of years then the states and local districts will have to pick up the cost. It reminds me of the old drug dealer's trick. The first one's free. We would be much better off to tell the feds "no thanks" and resist the temptation which will inevitably lead to more federal government control and more state spending. We can begin to break the shackles of federal mandates if we just say no to the opium of federal money.

The income tax debate has shone a bright light on our state government and how it operates. We are at a crucial crossroad in this state. We can continue along this path of business as usual where the ‘you scratch my back and I'll scratch your back' manner of doing business will continue to outstrip the productivity of the taxpayers of Tennessee. Or we can demand a change. We can demand that this state government return to what it was intended to do and that is to do for its citizens what the private sector won't, can't or shouldn't do. You may be able to justify $20 million for new golf courses by saying that they pay for themselves, which is debatable. The fact of the matter is, that's a prime example of what the private sector can do and should do if there's a demand for them and the government has no business competing with private enterprise. The Speaker of the House announced last spring, during the budget battle, that only essential projects would be funded until further notice. Excuse me, but that's the only kind of project the state government should be funding. It's time the state legislators and senators started looking at the big picture. It's about what's fair for all the taxpayers of Tennessee not what's advantageous for individual districts. Each project should be judged by its own merits, not some backroom deal between lawmakers trying to get what they want. Each and every department in state government should have to justify their very existence each year starting from zero. The routine increasing of a department's budget just because they exist is the reason government grows out of control and becomes unresponsive to the people. Ask most people up here on Capitol Hill why they do something the way they do and the likely response is, "that's the way we've always done it." The people of Tennessee no longer buy that excuse. Most are taxed at close to 50 percent of their income and they're demanding you rein this monster in.

It seems odd to me that the Governor continues to tell us that we're looking at a $380 million deficit yet he hasn't even submitted a budget. He wants an income tax, not to equalize the tax burden, but to grow the size of government. By his own calculations, we'll have a $470 million surplus with an income tax and he already has plans to spend that money too. Here's the bottom line I'm hearing from my constituents. As long as tax revenues are outpacing population growth and inflation. As long as education spending explodes while many schools languish at or below the national average. As long as we keep finding 11,000 dead people on TennCare, they don't want to give you one more penny until they feel like their money is being spent responsibly.

My listeners thank you for the opportunity to have their collective voices heard and I thank you for your time and attention.