Tennessee House of Representatives 112th House Finance, Ways, and Means Committee, 19 Apr 2022

Previous Meeting Next Meeting

⏯

youtube image

►

From YouTube: House - Finance, Ways & Means Subcommittee (A) - April 19, 2022

Description

House Finance, Ways & Means Subcommittee (A) House Hearing Room 3

A

Madam clerk, please call the roll.

B

Representatives bomb camper, freeman.

C

D

Hazelwood lynn,.

B

Ogles todd whitson williams,.

D

Wendell, chairman hicks, here you.

A

D

A quorum thank.

A

You very much I'd like to call the finance ways and means subcommittee to order for april the 19th 2022 members, any announcements or personal orders before we begin seeing none. We have various calendars before us today, but for the purposes of this meeting- and I want to make sure everyone is clear for the purposes of this committee- we will only be taking up calendar one. So if you do not have a bill on calendar one, it will be taken up and you're on the other calendars you'll actually be taken up, probably around 2 30.

A

And of course, if you haven't already noticed, time is very fluid today, so, but we will be taking up those bills. So let me just go back so we'll have right now subcommittee, of course, we're beginning now we'll take up the bills on calendar one. Once we finish up, we will actually adjourn and then we will come back as far as budget sub is concerned. Around 2 30. full will actually meet at 1 o'clock.

A

So that's the tentative schedule and again those times could uh could be a little bit fluid, so just bear with us as we work through this all right, so we will yeah. We will actually recess at the end of this committee. Sorry, I misspoke there and said adjourn all right. Let's get started members we're going to begin with. Item number one item number one on our calendar is going to be house bill 2040 by chairman whitson.

A

You have a motion, a second sir. You are recognized. Thank you, mr chairman committee.

E

uh House bill 2040 as a man that creates standards.

F

For electronic monitoring companies operating the.

E

State of tennessee with that, mr chairman, I renew my motion.

A

All right, thank you, chairman whitson, for this description members. You heard the description and discussion on house bill 2040., seeing none house bill, 2040 does have a cost associated with it, so we will have to place it behind the budget considered a later date. Any objection seeing none behind the budget, all right. That brings us to item number. Two on our calendar item number two is going to be house bill 637 by chairman howe, there's chairman howard. You have a motion and a second- and it looks like you- have an amendment that has been filed.

A

Drafting code zero, one one, two one four! Is that correct? That's what I have, mr chairman, all right! You have a motion. The second looks like this actually uh rewrites the bill. So let's go ahead and get this put on in the proper posture. You have a motion. Second, any discussion on the amendment. Seeing none we're now voting on the amendment zero one, one, two one, four on two house bill: 637, all those in favor say aye, all those opposed, no the eyes have it we're back on the bill, as amended.

A

You'll recognize her for a brief description.

G

Thank you, mr chairman and committee. I think we've tried our best to talk to most everyone on this committee about this situation. This bill addresses an unfair sales tax situation that currently exists with respect to the application of, what's called the repossession credit that is found in tca section 67-6-507-d.

G

This section in the code allows a repossession credit for sales taxes that are unpaid by a customer who purchases tangible property, such as a vehicle, and if that customer fails to pay the tax, then the dealer can uh take a tax credit.

G

uh This is uh again um affecting a small number of used car dealers, uh as described in this bill, and this the genesis of this bill came to me from a company in in bradley county whose owner is a constituent of mine and they adopted a business model.

G

Unlike most used car dealers, the average used car dealer in tennessee will require a about a 15 to 20 percent down payment of a used car and then, on top of that, the full amount of the sales tax has to be paid.

G

I believe, within 30 days to the state of tennessee, that's a pretty high hurdle for most low income, low middle income, consumers who are looking for reliable transportation to get them to and from work to and from church to and from schools, and as a result, the genesis of this bill, the company and other companies small. A number of companies in tennessee that use another business model.

G

Their model requires only a five percent down payment and the company, then out of its own pocket, pays the sales tax upfront within 30 days to the state of tennessee.

G

Then they set up monthly payments and within that payment the customer pays back the sales tax that was previously paid by the dealer. This worked well for a number of years.

G

uh This company this this family- that I know personally they've been in the car business for about four decades and they adopted this model for their used car business and back in 09. It went through a department of revenue audit.

G

There were no findings on that audit.

G

Another auditor comes along a new and different auditor from the department of revenue, or he may have been a contract audit. I'm not sure, looked at the situation in 2015 and said no, you do not qualify for this tax credit and required them to pay a two million dollar reimbursement and requires them to pay since 2015 until now about a half million dollars a year in additional taxes that they were not required to pay previously, and this has amounted to a total of about five million dollars since 2009..

G

We believe the code says that they do qualify for this, because there are other companies with a similar business model.

G

That are allowed to take the tax credit.

G

The only difference is these. Other companies passed the note off to a finance company and they again are allowed to take the tax credit. This company, the focus of this bill and companies like it, keeps the note in-house.

G

They pass the note off to an in-house finance company located in the same building they're doing exactly the same thing, but the auditor says you don't qualify for the tax credit and, I might add, if a car is leased, the sales tax can be paid monthly and that's what the dealer is doing he's allowing the sales tax to be paid monthly back to him since he's already paid all of the sales tax up front.

G

I believe this is unjust. It's a financial windfall for the state of tennessee and I believe it should be addressed. Senator bell- and I have worked closely with the department of revenue to try to resolve this issue.

G

We believe the company was qualified according to the code, to take this tax credit in the past. We believe that it is currently qualified to take this. Take this tax credit. It has passed the senate revenue subcommittee with a positive recommendation, and I understand it's on the senate floor today.

G

The commission of revenue, as well as his staff, have been extremely open and cooperative in our discussions about this issue, and I might add they do not deny that we have a very good argument to make our case.

G

Unfortunately, the all audit ruling has not been changed and we have been able, unable and unable to reach an agreement.

G

The bill simply makes it clear that if you sell a used car and gets approval from the commission of revenue that you meet all the requirements outlined the primary one being that you require a down payment of five percent or less that you are authorized to takes that tax credit on your business.

G

This company and other companies like it in tennessee, are being penalized for trying to help people to get into a good used car at a reasonable down payment price and paying the sales tax for them upfront and they pay it back monthly, it's generating a windfall for the state. It's just wrong and I would appreciate the committee's approval of this bill.

A

All right, thank you, chairman hal, for this description. Members you've heard from the sponsor any discussion on house bill, 637, representative hall,.

H

Thank you, mr chairman, and to my seatmate chairman hal. Thank you very much. I know you're doing this work for your constituency. I appreciate that. There's always a fear that tax policy could put someone out of business, and I know you mentioned these folks have been in business for four decades.

H

uh Is there frustration or potential frustration where this business says we're done, I'm just going to throw up our hands, and you know we're going to quit. Fighting the quit fighting the system and and retire and go to the house is. Is that a possibility chairman chairman hal.

G

Well, I can't speak for the constituent. I can tell you this: the owner of the business, I've known him for years he's been a an outstanding local citizen. He is past retirement age and that could be a distinct possibility and, I might add to the committee. This is not unlike the same situation. We saw a couple of years ago with the jack daniels audit situation.

A

All right, thank you, representative hall, all right further discussion on house bill, 637, seeing none house bill 637 does have a cost associated with it, so we will have to place it behind the budget and consider it a later date. So without objection house bill 637 is behind the budget. Thank you all right. Members. That brings us to item number three out of number three on our calendar is going to be house bill 2762 by chairman doggett.

A

You have a motion and a second you are recognized on house bill 2762, it looks like you've got an amendment drafting code, zero, one, seven, six, five eight! Is that correct? Yes, sir, it is you have a motion, a second you're recognized on the amendment. Thank you.

B

Very much, mr chairman committee, uh what we did is uh we. We took a couple things out of a previous amendment to get the fiscal note back down to not significant.

A

All right, thank you very much. Members you've heard the description of again drafting code zero, one, seven, six, five, eight any discussion on the amendment.

A

Seeing none we're now voting on the amendment to house bill 2762, all those in favor say aye, all those opposed, no the eyes have it we're back on the bill, as amended you're recognized on the bill as amended. Thank.

B

You, mr chairman, for the next 20 minutes: I'm going to try to explain this as thoroughly as possible.

I

But if you would like the condensed.

B

Version I can offer that as well. We would prefer so. uh Thank you. What we're doing is codifying right now. The current pay scale that the uh public defenders conference and uh the district attorney general's conference are doing as of today we're just putting that in code.

A

All right, thank you very much. Chairman dog members, you've heard the description. Any discussion on house bill 2762 see none we're now voting on house bill, 2762, moving on to full finance, all those in favor say aye, all those opposed. No the eyes have it house bill 2762 moves to full finance. Thank you very much. All right. That brings us to item number four on our calendar out of number four is going to be house bill 2850 by chairman kumar. You have a motion and a second. You are recognized for a brief description.

B

Thank you, mr chairman and committee um hospital. 2850 does have an amendment zero one, six, eight three, eight yeah.

A

I don't know if.

B

It's traveling. Thank you.

B

Members and friends since passage of constitutional carry, we do not require people to take a gun safety course. Let's face it, some people, a lot of people would benefit from it and they do really need it. This bill incent, incentivizes people to take this course uh in the form of a payment from the state of tennessee towards the gun safety course.

B

The administration has authorized the department of safety to pull one million dollars out of the handgun, carry permit reserve fund, which is substantially large and to contribute towards this, and, of course, on a year by year basis. Renewal of this is contingent upon uh funding from that.

B

Handgun carry permit reserve and it says, subject to appropriation so for the first year we are good and funded, and subsequently we will see how the program performs.

B

Thank you, mr chairman. All.

A

Right, thank you, chairman kumar members, you heard the description of house bill 2850. Any discussion on house bill 2850, seeing none. There is a cost associated with house bill 2850, so we will have to place it behind the budget and reconsider it at a later date. So without objection house bill 2850 goes behind the budget. Thank you.

A

All right members, thank you for your patience. All right. That brings us to item number five item. Number five is going to be house bill; 2143 we're gonna roll this to the hill, so without objection house bill, 2143 rolled to the hill brings us to item number six on our calendar item number six is going to be house bill 2545 by representative alexander.

A

You have a motion in a second. You are recognized on house bill 2545 for a brief description.

B

Thank you chairman. Thank you, committee um house, bill. 2545 is amended, there isn't on it.

A

It's traveling.

B

A

B

All right good! um This amendment basically allows uh cnas uh this bill, as amended, allows cnas to also become medical aid assistance which allows him to disperse medication. um Once it was amended, it took the physical note off.

B

So that's basically what it does all.

A

Right, thank you very much. Members you've heard the description on house bill 2545 any discussion. Seeing none we're now voting on house bill, 25, 45, moving on to full finance, all those in favor say aye, all those opposed. No the eyes have it house bill 2545 moves to full finance. Thank you. Thank.

B

A

All right that brings us to item number. Seven item number: seven on our counters house: bill 2283 by representative beck.

J

Thank you, mr chairman. I have a amendment.

A

Yes, sir, and that drafting code, you have a motion to second that drafting code is zero. One. Seven five, two three. Is that correct? That's correct all right! You have a motion a second, since this does rewrite the bill. Let's go ahead and get this put onto the bill and then we'll we'll recognize you to explain your bill as amended. So thank you, sir members, in discussion on the amendment. Seeing number now voting on drafting code, zero, one, seven, five, two three onto house bill, 2283, all those in favor say aye, all those opposed.

A

No the eyes have it. We are back on the bill as amended, and you are recognized. Thank.

J

You, mr chairman, uh last august security cameras showed a group of men holding down a 22 year old, dallas spirit during an altercation on broadway and whiskey row bar he became unresponsive and later died.

J

The grand jury has indicted six people for reckless homicide. uh Six of the employees working as security guards were unlicensed. This bill is in response to that uh we're bringing these security guards under what they call pso propriety security organizations where you can go and each organization or each establishment can have its own security force. This will allow the for training of not only um to help the intake safe, take takedown techniques, but also how to de-escalate certain situations, and with that explanation, mr chairman, I'm prepared to take questions all.

A

Right, thank you. Representative beck members. You've heard the description discussion on house bill, 2283.

A

Representative lynn,.

K

Thank you, mr chairman. Does this mean that no one would be able to work security unless they were licensed? From now on, like you were saying that these folks were working security at a bar, I guess there were bouncers or something like that. That's.

J

K

Does that mean that no one at all would be able to work security say as a bouncer or something unless they were licensed or working for a licensed security agency?.

J

You're recognized this bill only pertains if you've got a license from the abc or a beer board. So it's not going to apply to organizations such as you know, a dock worker at a walmart. This is what this only this only applies to if they're, if you do have a uh a license with the abc or the local billboard, representative lynn,.

K

Okay, so the answer is yes: if it would, in that situation, you've got a license from the abc the beer board. You cannot hire any security like a bouncer unless they are have a license or they're working for a licensed security company.

A

Representative beck.

J

uh You either have to work for a licensed security company or you have to work under one of these psos proprietary security organizations, which any organization or any establishment can create their own pso, but they it's done from establishment to establishment and, yes, they would have to be licensed. Representative lynn. How.

K

Much does this stand to raise the costs for proprietors of of businesses that have a beer board license or a liquor license. How much does this stand to raise their cost of operation?

K

And um you know we had a voluntary program where convenience stores could send their folks for training and they sent their folks for training on uh you know underage drinking that would get them certain credits.

K

Might it not be better to do something where they're encouraged to send their bouncers or or whatever for training, rather than us, forcing them to buy their labor from some other organization, because it sounds like they're going to have to buy their labor bouncer bouncer doesn't really work for them anymore. The bouncer would have to work for a security company or or pso.

K

um You know. Might it well just just answer those those questions representative.

J

Beck they have to be uh representative, they have to be uh licensed already. uh All this bill does is gives them a re when they renew their license every two years that they'll have to have two hours of a refresher educational course. So it's not changing any uh form of where they get their security.

A

Represent lynn, our representative todd.

B

Thank you, mr chairman, and.

I

The sponsor is a business that employs someone in this type of role already or any of their employees. Aren't they already.

B

Liable for what those employees do represented back.

J

They are liable, for example, whiskey row is being sued for wrongful death as we stand here today, but what this bill aims to do is keep the patrons safe uh through de-escalation and and through training, uh to help these security guards not put the patrons in peril such as this situation, where they sat on the young man and literally suffocated him representative.

B

Todd, thank you, mr chairman. Wouldn't the business owners already have an incentive to incorporate some program like this, based on the existing liability that they already have and an insurance policy they probably have for that liability.

J

Representative beck and chairman todd, you would certainly think so, but this is just making it clear that in the training that's required that they will have uh that type of training. But I agree with you. If I was running a business, I would certainly make sure that the the security guards that I hired were trained properly on de-escalation and uh helping keep peop patrons safe.

J

That's only good business and I agree with you there. Unfortunately, for example, this particular case that fell through the cracks.

B

Representative todd, thank you, mr chairman, and, as you said, this makes it clear it. It actually requires it. It doesn't just make it clear. I think it's taken a good idea that a business should consider to implement and requiring it in our code, and I think, that's to me crossing the line of something that we probably don't need to really do.

B

They already have a liability that exists under the law now, and they have to recognize that, and cases like this, that are being brought obviously will bring that to the forefront, and I would think that would make them even more aware, even their neighbors, more aware that we might need to take some additional measures.

B

So I just just don't see this see it as a good idea to put this into code when it's more of a common sense, practical matter that they should be doing on their own to make sure their liability is reduced as much as possible. So thank you, mr chairman. Thank.

A

You representative beck, follow up.

J

I agree that it's common sense, but a lot of times we have to put common sense in the code to make sure it gets done.

A

All right, thank you. Further discussion on house bill, 2283 cnn we're now voting on house bill, 2283, moving on to full finance, all those in favor say: aye, all those opposed. No the eyes have it house bill 2283 moves on to full finance. Thank.

J

You, mr chair and committee,.

A

All right that brings us to item number eight on our calendar item. Number 8 is going to be house bill 2862 by chairman dixie. Do we have a motion in a second? You have a motion. The second you're recognized for a brief description.

F

Thank you, mr chairman and committee. This bill requires the division of tenncare to designate continuous glucose monitors as a diabetic supplies on the state preferred drug list formulary. This requires tenncare to make cgms available to enrollees with diabetes, who are insulin dependent if medical necessary, basically what it does. It allows you in real time to check your your blood sugar, I'm actually wearing one right now and it's been helping me out so and I look at my, I have my wife listed as I can share it.

F

So if something happens to me, she'll it'll be alerted, and so I can look at it. So my blood sugar right now it's a little high, but it's at 138, but it might be because I was rushing to get here, but what it does it allows people to monitor and check their blood sugar on a regular basis, um a quick story about a month ago.

F

I wasn't feeling too well, and I didn't know why, and so I just laid down, because normally I'm pretty in tune with my body, but my wife said: have you checked your blood sugar and I did and my blood sugar was extremely high, but sometimes when you have diabetes and your blood sugar, it gets high. You don't think clearly you get cloudy and normally I'm on top of it, but it didn't.

F

But what this bill would do would lower the monitor cost from about fifteen hundred dollars to about six hundred sixty five dollars per unit, um currently ten care contracts with managed care organizations or mcos to deliver the glucose monitoring for insulin-dependent diabetics. But right now it's done as a doable metal is done through a doable medical medical equipment model, which is you have to go, see a doctor and then they have to order it and it takes about a month to get it.

F

This will allow you to go to a pharmacy, get it just as if you would get any prescription any any ordinary prescription that you take for, like blood blood pressure, medicine or anything any other kind of medicine.

F

This pretty much almost eliminates the sticks and pricks of the fingers that we do on the daily multiple times a day. So it's really been helping me out a lot, but this would save the state money and with that, mr chairman I'll stand to take any questions all.

A

Right, thank you. Chairman dixie members, you've heard the description of house bill 2862 any discussion.

A

Seeing none. There is a cost associated with house bill 2862. We will have to place it behind the budget, consider it at a later date. So without objection house bill 2862 will go behind the budget.

A

All right. That brings us to item number. Nine item. Number nine is house bill 1321. I have a request to roll this one week. So without objection house bill 1321 rolled one week.

A

That brings us to item number 10 item number 10 on our calendars house bill 2397 by representative mitchell. I don't know that he has got here yet so without objection.

A

All right, we'll give him a little bit of time. So item number 10 house bill 2397 without objection, will be rolled to the hill without objection roll to the hill. That brings us to item number 11.

A

Item number 11 is going to be house bill 2456 by representative sparks. You have a motion, a second you are recognized, sir chairman.

L

I was going to ask: is it possible to take up 2253 first knock that one out, because I've got someone that's going to testify on the next bill. Yeah.

A

We can all right members we're on item number 11 house bill 2456. We got a request to roll this one spot without objection so move. We are on item number 12 house bill 2253 by representative sparks. Do I have a motion? A second? We have a motion. Second you're recognized for a brief description. Yes, uh basically.

L

What this bill does requires lease to classify school nurses is licensed personnel for salary purposes. The last few years. We've it's been shown that how critical school nurses are.

L

There was a study conducted by in 2020 by dolores chairman, doris gresham of education and chairman kumar, that only a third of our nurses in tennessee are placed on a certified schedule and in fact the study also reported that two-thirds of our school nurses hold an rn or higher level of education, meaning they are similarly educated as our cte teachers who are paid the same as other certified staff.

L

This comes to fight the fact that school districts actually see receive more money for school nurses than they do. Teachers, school nurses are paid from the classroom component at a rate of 75 percent, as opposed to 70 percent of the districts that receive they receive through the instructional component teachers.

L

Furthermore, members nurses and teachers are treated exactly the same as the state's retirement system. Tcrs districts are required to contribute the same amount of money for nurses as they are teachers, but that's what this request is.

A

All right, thank you. Representative. Sparks members. You've heard the description of house bill 2253 any discussion seeing none. There is a cost associated with house bill 2253, so we will have to place it behind the budget consider at a later date. So without objection house bill 2253 will go behind the budget. Yes, sir, all right! That brings us back to item number 11.. Item number 11 again is house bill 2456 by representative sparks. Yes, you have a motion a second. You are recognized on house bill, 2456.

L

Yes, chairman and committee members, if I can give you a little brief history of this piece of legislation um about three years ago, uh I was kind of dealing with struggles in my life with you've heard me. Talk about my sister. That's in her nursing home had a brain tumor. In fact, I was sitting about where camper is.

L

When I got the phone call, she had a bad fall and had a was in a had a brain bleed and um was in a coma for on life support for two and a half months that I remembered I prayed over, believe it or not. She came to. I know it sounds odd. She came to she started talking and now. She's in a nursing home, sadly lost everything to her name and um my sister worked for insurance company. That was what was wild.

L

I was really disappointed with the insurance company and got a mother and a nurse at home, so I'm kind of seeing struggles in our lives with many of our us deal with with family members, especially when you start getting over 50., and so I called ralph webber here that owns a company called metabid he's a healthcare consultant, and I just said, ralph, what's up with healthcare? What's going on with healthcare, and I said: what can we do as a state to just shed more transparency?

L

Just add free market principles and he brought up reference based pricing. Well, I didn't know what reference based pricing is. Most of us in this meeting was room today, don't don't know what respect pricing is, but I think reference-based pricing does shed some light and full transparency on health care. If you look at products and services in this world economy, I don't think you'll find anything.

L

That's more jacked up and messed up and screwed up than our healthcare system, whether it's pbms, whether it's my sister that lost everything to her name or other areas that we've all dealt with, and so that's what led to the legislation that legislation led to a summer study. The pandemic happened so that kind of set us back and I'll. Let uh ralph who's on the list to testify.

L

Speak to what else led after the summer study uh chairman.

A

All right, thank you, representative sparks, and we do have a request for testimony from mr ralph weber, so members without objection, we're going to go out of session, so without objection we're out of session, and we will ask our guest to please come up to the podium if you'll just identify yourself give us a brief introduction. You'll have three minutes.

A

A

M

Thank you. Thank you, mr chairman committee members. I'm here to speak about the house bill that representative sparks has introduced. Okay, it's working now um simply the the bill asks that the state health plan be sent to tasser study. When representative sparks uh introduced house bill 1366 in 2019, he requested some information from tn finance.

M

What we got from tn finance was the build charges for the plan year, 2018 covering 139 000 state employees, schools and higher education, employees, total of 280 000 people, the build charges were 2.7 billion dollars and the cost of the plan was 1.6 billion, so roughly 40 percent less than the bill charges, but within some of the procedures we saw a huge variance in pricing. For example, ct scan of the abdomen. The average price was 635, the high was thousand two hundred for a colonoscopy. The average was one thousand two hundred twelve dollars.

M

The high was seventeen thousand three hundred and forty one dollars and within colonoscopy. What was very interesting is every provider that was over. Ten thousand dollars was rated two to three stars by medicare out of five two to three stars on quality, whereas everybody under 5000 was rated five stars, so the less you paid the higher the quality, so they were paying these huge charges for lower quality providers.

M

The initial bill called for reference-based pricing to pay providers at whatever medicare pays. The providers, plus an extra 75 percent tn finance, said that we're only paying providers 150 medicare right now, so they put a fiscal note on it. So the bill was amended to reduce the costs at that time. In 2018, tn finance said that they paid out of network provider six percent less than in-network providers, so simply changing to all. Out-Of-Network providers would have saved the state 96 million dollars a year, so there was definitely a need to to have further study.

M

Chairman martin daniel became a co-sponsor of the bill and he asked for some more uh data on the spending and as soon as he as soon as he asked for that, a couple of lawsuits were filed to suppress the the need to disclose that data.

M

As we studied further, we found more variants in pricing. uh The tn finance said that they were aware of it. What reference based pricing does very simple, is it sets the bench market? The benchmark is what medicare pays: hospitals and doctors for procedures and surgeries, and it sets that plus a margin.

M

When we looked at the data that tn finance presented, that said, they paid basically what medicare paid plus 50 percent. I said: well, let's just cap it at that: let's not have somebody being paid 3 percent more. Why should anybody be paid more uh nineteen thousand dollars for ct scan? Some of the providers were paid more than they billed they sent in a bill and they were paid more than they built. I mean sometimes I'll leave a tip if I get good service, but I'm not going to pay more than I'm billed.

M

So there are a lot of erroneous charges. Mr.

A

Webber, your three minutes is up, so if you want to just make a final statement.

M

Final statement attorney general: I understand, didn't audit and has the results they haven't been released. Yet I think the taser study will take that into account, as well as ask for some more data on spending and hopefully uh will save the state definitely more than 100 million a year.

A

All right, thank you, mr weber, and before you leave members any questions or comments for our guests, seeing none. Thank you very much for for being here. I actually sat on the uh insurance committee a couple years ago and heard your testimony. So thank you again for being here in your time. Members without objection want to go back into session without objection we're back in session, and we are back on the bill representing sparks any follow-up. Well, I.

L

Was just going to mention, we did send a letter to herbert slattery the a.g, requesting the findings of the audit that we paid for. I think this committee voted for that. I believe it maybe it's two year two years ago the odd audit did cost us some money to get uh implemented, but I wanted to share with you even the bible talks about and luke talks about. Suppose one of you wants to build a tower.

L

Wouldn't you first study and estimate the cost to see if you have enough to complete it. I think all we're doing is slowing down sharpening our acts and studying this and if taser says, look, there's nothing to this. It doesn't help transparency I'll leave this alone. You won't hear from any anymore.

L

I think something positive will come out of this. The leading cause of bankruptcy is health care cost. I didn't know this until I started researching. We spend more money on health care than any other country on the face of the earth that just shocks me. You know because we should have efficiencies, we've led the world and military. We live the world in production and technology, so many advancements, but in healthcare you know we seem to drop the ball and often think of my sister. You know she. She was a former journalist.

L

She didn't want to go into journalism because of the fake news, so she went into insurance and they left they left her high and dry. That's what bothered me so I'm asking for y'all's consideration on this uh on this study. Thank you all.

A

Right, thank you. Representative. Sparks members. You've heard the description and you heard the testimony any discussion. Let's go to chairman williams,.

E

Thank you chairman. Thank you, uh representative, sparks very important subject matter, as as your presenter testified and- and you stated earlier, this is something that we've been studying. Tasks are not specific to this data, but this uh realm have have been for a while. This committee is tasked with sending bills for tasks or study.

E

There uh is a calendar this afternoon, but because of the timing uh and that's being at the end of the late hour, I guess you could say round and third headed home uh the we're not able to refer it to that calendar, so we're having to transact business here, but of those four bills on that calendar.

E

We're per um we're only supposed to take two and send us tasser, and then the other three um I've met with the other members and advocated to them saying as a member of tasser, I will communicate with dr lippert with the idea that we would study these for that, uh and so, as as you and I discussed earlier today, that's kind of the intent.

E

The other two are the ones that the committee felt like that they wanted to study in taser, and so because of that reason we're not I'm going to make a motion to either uh either you can take it off notice and I'll advocate with dr lippert and tashard as a member of tasser, or we can send it to summer study and vote senate summer study and we could take it to tasser.

E

Obviously you and I came in together. We served a very very long time. I respect you, I'm gonna, give you the opportunity of what you think would be best for us to do.

L

Well, I think the best plan is if we can save a hundred million dollars to move forward. I talked to dr lippert yesterday he was fine. He didn't see a problem. We just met with the speaker. Didn't really see a problem. Studying it was all we're doing is slowing down, studying our costs.

L

If we come back, maybe it's not a hundred million dollars worth of savings, maybe it's five million, maybe it's a million, but I think that time is well spent for us to study the cost, I'm at the mercy of the chairman and and the members of this body. Remember we all allocated 400 000. If I'm mistaken, to conduct audit the audit is in ag's office we're waiting on him to release the findings. I think this correlates with all your efforts from two years ago, so I'm at the mercy of y'all chairman.

E

Williams, thank you. um Thank you. I think I got an answer out of that representative sparks and so chairman I'd like to make a motion to send this bill to summer study. Oh we've got emotions or a second.

A

We do have a second any discussion on the motion hearing. None we're now voting on sending house bill 2456 to summer study, all those in favor say: aye aye, all those opposed. No the eyes have it house bill 24 56 goes to summer study all right. Thank you, sir. Thank you.

A

All right that brings us to item number 13. item number 13 is house bill 324 by representative baum.

B

Thank you, chairman hicks. This is the bill that would change the grading scale in tennessee from a seven point scale to a 10 point scale which all the states surrounding us have in most of the other states in the united states. This is so that tennesseans will not be at a disadvantage relative to applicants from other states when they apply to colleges and for scholarships.

B

For example, if a tennessean has a 92 and somebody from kentucky has a 92, the tennessean would have a b and the fellow from kentucky would have an a. We don't want harvard to think. The applicant from kentucky is better all right.

A

Thank you for this description. Representative baum members. You've heard the description of house bill 324 any discussion, hearing nothing seeing none the bill does have a cost associated with it, so we will have to place it behind the budget and consider it at a later date. So without objection house bill, 324 will go behind the budget.

A

All right. That brings us to item number 14.

A

item number 14 is house bill, 2384, that is by leader gantt. This bill was previously considered in place behind the budget. It has now been funded in the administration amendment and we can now move this forward.

A

So any objection to reconsidering our action on house bill 2384, seeing none house bill 2384 is back before us all right. Let's, we have a motion. A second house bill, 2384 leader gant, you're, recognized.

B

Thank you, mr chairman, I'll, be very brief. This uh is brought by our treasurer treasurer lillard authorizes the state treasurer to develop and implement and administer a program to award grants to local governments and volunteer fire departments to fund a length of service award known as losap beginning in um fiscal year. 23 24.

A

All right, thank you. Leader, gang members. You've heard the description of house bill 2384 any discussion hearing, none we're not going to nope. He doesn't want to run the amendment all right. Any discussion hearing, none seeing none we're now voting on sending house bill 2384 on to full finance, all those in favor say aye, all those opposed. No the eyes have it we're sending house bill 2384 to full finance.

A

All right that brings us to item number 15. item number 15 on our calendar is going to be house bill 2609 by chairman hazelwood. You have a motion in a second. You are recognizing. It looks like there's an amendment drafting code, zero, one, five, six, five, six that rewrites the bill is that correct that.

N

Is correct all right.

A

Is there a motion to second on the amendment? You have a motion, a second, let's go ahead and get this put onto the bill.

A

Any discussion on the amendment hearing, none seeing none we're now voting on amendment zero, one, five, six, five to house bill, 2609, all those in favor say aye, all those opposed, no the eyes have it we're back on the bill as amended you're recognizing chair lady hazelwood. Thank.

N

You, mr chairman, uh this bill, just basically would do for the chattanooga lookouts, similar to what we did for the knoxville smokies last year. If and when the lookout stadium is built, then this would allow the lookouts to keep the sales tax from within the stadium. There is one difference in this amendment that I think makes it better, and that is that the county would still continue to collect the portion of the sales tax that's generated for education that would still go into the education pool.

N

We did not do that with um the previous stadium bill that we had with that. Mr chairman, I would renew the motion and ask for passage all.

A

Right, thank you. Chair lady hazelwood members. You've heard the description of house bill 2609 any discussion, seeing none we're now voting on house bill, 2609, moving on to full finance, all those in favor say aye, all those opposed. No the eyes have it house bill 2609 news to full finance members. That brings us.

A

That brings us back to item number we're going to go to item number 10. item number 10 is going to be house bill 2397 and we are without an objection, we're going to place without objection, we're going to place house bill 2397 behind the budget. So without objection sing done house bill. 2397 goes behind the budget, all righty. That brings us to item number five.

A

It's just a second here and I think leader, lambert. I think you and chairman why they're going to.

O

Yes, sir, mr chairman, with your permission, we'd like to kind of tag team, miss chairman white and myself give.

A

Us just a second to get.

A

All right, we are on item number five house bill, 2143, you've got a motion and a second you are recognized, sir famous chairman and.

O

I know this has been through approximately six or seven weeks of committee hearings in education, um the better part of six months on working with tennesseans from mountain city to memphis and lots of different groups. So I know you guys have read this and know this thoroughly, so I'm not going to give a big long recitation of what it is, but it is a change from the bep formula to a new funding formula that is student-centered that creates a base funding of 6860 per student, and that is a big shift from what we do now.

O

We fund classrooms, we fund schools, we fund systems, but we don't focus on funding students and, as part of that, it would also focus on weights, above and beyond that, for economically disadvantaged concentration of poverty with the different school districts, sparse school districts, small school districts, I mean, if you're in a sparse school district. Quite frankly, it costs more to run your buses, they run longer distances. I mean it's just um if you're in an economically disadvantaged area, those children need additional resources.

O

um Some of this is covered under the current formula. Some of it is not so this proposal will be a significant step forward and also will focus exclusively on additional dedicated funds for k-k-3 literacy, which our numbers are abysmal, on literacy right now.

O

This will drastically improve that, because we're not just going to allocate the money we're focusing on that we're making that an area of emphasis, as well as fourth grade tutoring, cte programs and in preparation kind of of top to bottom of just raising the bar for our educational institutions across the state and leveraging at the end of the day on this, an additional billion dollars of state funding in the 2324 budget, and that will raise the total up to about 9 billion in total k-12 spending.

O

It's a significant step forward and it's a huge amount of funds that are taxpayer funds, and so part of this is more accountability than we've ever had at the state level to ensure that these funds are being utilized to literally leverage for our children's future in a better education. Mr chairman, we stand for questions.

A

All right, thank you later and there was an untimely filed amendment. So I'm going to at this time recognize representative freeman.

P

Thank you chairman and apologize for the late filed amendment, and my understanding is, is the uh the exact same amendment is uh in the senate, and so with that I withdraw it.

A

All right, thank you very much. So without objection, amendment withdrew all right that puts us back on the bill. Members you've heard to discuss your description. Any discussion, representative hall.

H

Thank you, chairman and sponsor. Thank you very much. I do have a question that may get into some of the minutia of it. If it's all right, some of our county leaders have asked some questions and it may go into depth on on a county level, funding in schools and students that may be transitioning from one county to the next. So I appreciate your your indulgence.

H

If a student leaves a local school system and attends a charter school in the same county, does all the state, federal and local match dollars? Follow this student.

O

H

Okay, if a student leaves a local school system to.

A

You're recognized: let's do this because I know this may be a little bit of discussion on this. As long as we don't get into a running debate, once you're recognized, you can go back and forth and I'll. Let you know if you begin running off so go.

H

Ahead, thank you chairman. I've got three more questions and maybe a statement at the end. So thank you. Thank you leader again. If a student leaves a local school system to attend school in an adjoining county, does all the state, federal and local match follow that student as well.

O

And I can get some additional details on that, but in essence, yes, if a student leaves one school system, it goes to another just like now, it would follow with them. The timetable on this is a little quicker, but it's not immediate. Okay,.

H

And I think and I'll answer part of that question. I think there is a a year time frame that the that the departing school district has to be made whole. I think, may help that answer. Some.

H

Thank you, yes, sir. Thirdly, if a student leaves a local school system to attend a private school, does any of the state, federal or local match follow that student.

O

Milser would not under this bill if they go to a private school they've left the school system and again there is some lag time on when that school system would go down by one student, because, similarly to the bep, a large portion of the bep is how many children are in those schools, and so with this we're funding, children and children's education, and so it it would eventually reduce that district's funding. But it is not immediate. Okay,.

H

And that goes to my last question of of how those funds are calculated to the school district. I think you just answered that that those funds will be calculated not in that current year, but in future years that that would occur.

O

Yes, sir, that is correct and again you know they all have to build a base budget, and so that's why that 6860 number is very important and over time, obviously, in this new formula, which is why the implementation of this and it's you know if we're able to pass this this year. This gives everybody. You know six eight months to be able to run through every aspect of this run. Those numbers build their base budgets around it um and there there's approximately 500 million dollars for cte funding in this budget.

O

That is, is a set aside, so that billion dollars that and an additional 500 is set aside for next year's base budget, but all of our school systems will have an opportunity to look at every single one of those numbers and run through that. What we didn't want to do is exactly the questions you're asking, which are right on point, as always, is to pass it past this right now and it goes into effect july 1., my school district and yours they're, already 90 into the process of building their budget for this year.

O

So while they all have filed lawsuits saying that the bep is not sufficient for their needs, uh you know we are working on a new formula, but it is for next year to give them that kind of lag time.

H

And thank you leader, and I appreciate that in the indulgence, and I think I knew what the answers were going to be just wanted to ensure I didn't want to blindside anyone with those questions.

H

I do want to offer an abstract thought as as we're looking at at the funding, and I understand the the need and desire of funding an additional funding mechanism for folks living in poverty, children living in poverty, and we're certainly going to do that and that's part of it, but at some point in time as we're working through other pieces of legislation, the tennessee opportunity act some of our tanf funding as we're looking to raise all families out of poverty eventually and help our working families, and I'm excited about the opportunities that we're going to have with the opportunity act that that representative terry passed last year and we've been working on for the last calendar year at some point in time.

H

I I hope that we can get to the point 10 years from now 15 years. Yet from now, 20 years from now, where funding students in poverty is not something that we're that we're doing, that we're rising all ty, that the tide is rising all boats, and we don't see that as such a such a huge funding mechanism. Thank you for allowing me to say that chairman and members. Thank you.

A

Leader, camper.

C

Thank you, mr chairman, uh thank you, mr sponsor, for the bill and opportunity to talk about it here in finance on budget. I should say you mentioned at the top of your comments that we've been looking at this for about six weeks or so, and that goes to my question.

C

It appears to me that this is a monumental.

C

We're about to take it's transformative, it's going to change, how we fund education for years and there's a lot of us who believe that we might be rushing it, and I understand that the commissioner and administration feels as if you know the timeline also includes the ad hoc committees, and I get that.

C

But if we look at you know these transformative changes in education, we've done over the uh years, it's taken, maybe two or three legislative sessions to get it done, because it is major it's going to affect our kids and parents and teachers for years. So I'm I'm concerned about what appears to be a rush to get it done. uh Would you care to expound on that talk about that? You know, maybe assure the people. You know that this is something we absolutely have to get done now. Why can't we wait till next year?

C

I mean you talked about it at the top. So I'd appreciate your comments on that.

A

You recognize me.

O

Later, thank you so much for that question because I mean you know there. There have been, as you said, committees that were put together over the last six months, but I mean you know you and I've been here quite a while, and I've been here for 10 years and every single year. This comes up every single year. It's hey!

O

We got to do something with the bep: it's not working, it's not fun in our school district properly I mean I've heard both republicans and democrats say: look the bep's not working for our schools, it's not working for our kids, and so I I personally my kids at this point are in middle school and elementary school. The whole time I've been here they've just gotten a year older in a school system that doesn't have a funding formula, that's working well for them and again that's across the board.

O

I've heard from everybody that they don't like the way the beep works and I've heard many people say they don't understand the mechanisms within the bep. Now I will say that just takes time diving into it, but when you really dive into it it does not fund children a child's education in the way it should so that they get what they need to succeed. It just doesn't it's a 30 year old formula that doesn't meet today's standards, so what I would say is as far as rush it absolutely has not been rushed.

O

I mean this has been years in the making it's been 30 years in the making, quite frankly, but specifically specifically since last year. Coming into this year, I mean, after we passed several educational, um really improvements within the code. The question came down to. Okay, we've done all this other stuff to try to come out of the pandemic and make sure our kids bounce back. What are we doing about the base funding? Are we investing enough in k-12 education and is the state? Do it in a way that's going to achieve better outcomes?

O

That's why this is needed right now. That's why we cannot wait because I've heard people say: let's kick and you're not saying this, but I've heard people say: let's kick the can down the road. Let's study this over the summer, I've got emails, y'all got an emails on that. Those are folks that are not willing to step up and do the difficult work that we were all elected to do we're sitting in these seats right now.

O

If we wait a year, my kids went one more year in the public school system without a funding formula that will genuinely address their literacy needs, we'll genuinely look at those kids that have difficulty in school because of their both home life and and how they came into the school system. We have children that have a variety of learning needs that we're not funding right now, because we've got the bep and so we're stuck in that outdated model where this can spring us forward.

O

So why it's needed right now is because every single one of us should care about the kids that are in school, especially those parents that are out there that are begging for a better model. That's going to focus on k-k-3 literacy, that's going to focus on cte. We've got russell roughly 70 of our kids, that are that are not going to go on and finish out a four-year degree.

O

They need to get an education, that's going to lead to a career, because you've only got 25 to 30 of the jobs out there that require a four-year degree. If you're going to be an architect, an engineer, a doctor or a lawyer, if you're going to pursue one of those pathways, absolutely you got to go all the way in school. But for kids, like my nephew, that's graduating high school in the next few weeks.

O

He wants to be a lineman and he's going to make a ton of money doing that. That is a highly skilled trade. This prepares all of our kids for whatever pathway they want to go into in a way the bep never dreamed of because they didn't think of it 30 years ago. So the reason it's needed right now is our kids can't wait any longer.

C

Thank you for their response. As I remember the conversation around bep, it was more that- and I heard it every year.

C

Similarly, like you did, it was really more that we weren't fully funding it, and so there's this thought that it may be an outdated formula and it may be, but part of the problem was we weren't fully funding it, so we could fully fund it and yield some of the very results that you're talking about and we could have been yielding those results over the years if we had fully funded the formula I'll move past that point, but you also mentioned the base amount and it's about 68, almost 6900 dollars and the bep is funded.

C

It takes into account the student, the teachers and nurses, and that so could you talk more about this based formula and how do we account for increases over the years? What goes into keep up with inflation and and all of these.

M

C

That could affect the base fund basis, funding formula.

O

Thank mr chairman and thank you, madam leader, so I will say this if you know, and we have fully funded the bep, I mean we've had that conversation every single year when you look at an evaluation of what fully funded the bep is, it all depends on who's doing the evaluation right, so I mean you, you've got folks that, evaluate it and say: hey look. You didn't fund the fully bep fully fund the bep and the other folks out there that are saying nope, here's the evaluation.

O

We fully funded it so it it comes down to again the children and the teachers that are in the school that are trying to make sure that this next generation is in better shape, and we both agree on that. Multiple analysis on the bep have said if we put a billion extra dollars. Okay. So if we overfund the bep okay, it is a massive massive tax increase on our local governments.

O

Next year I mean, if you put a billion dollars into the current bep formula at those matches in that local match equation. As it is right now, it will be a massive burden on our local governments.

O

The tissa program changes that and it makes it a significantly less burden on our locals, so the state is stepping up and doing much more and our local districts will not have to do as much and that's a good thing, at least in my mind, and so when we've talked about fully funding the bep over the years. That's been most of the conversations I've heard is you know the state needs to step up more and not require as much other locals.

O

Now the the base formula of six thousand eight hundred and sixty dollars per student figured in most of what you've said already and that's how it came to the base. Now they tore it down all the way to the the bare bones and built it back up to that level, but we're still leaving that in local control. um If, if a local government, just as in sumner county, our school systems go above and beyond.

O

If they want to have smaller class sizes, if they want to have more nurses, if they want to have more guidance counselors, they can always do more. But yes, in that basis, is most of what you just mentioned.

A

Later campaign.

C

Thank you. Thank you, mr mr sponsor. That's all I have, mr chairman.

A

And I guess to expound on that. Thank you later camper, just to go a little bit further talking about that. This has been rushed in six months and um the bep review committee. I'm just curious, and this may be for chairman wyatt. Can you talk a little bit about how, over the years, what the bep review committee has always recommended? How has that fitted into the new tsa funding formula? Talk talk a little bit about that.

A

When we talk about being rushed, I mean we literally have kind of been working on this since inception back in the 90s, so chairman watt, yeah thank.

I

You thank you chairman, and, to to that point, yeah there's been a bp committee, a task force during the days of haslam we've been looking at this. The nine years I've sat on the chair in the in the education committee is either sub-chair or chair. This discussion has always been for us.

I

I think the the point that we need to make more than anything is is that the time is right. We could, we could say, let's go home at the end of april. First of may come back in january.

I

We're going to be no closer. We've got we'll have a turnover, probably 20 or more representatives. We've got to bring the conversation get started again. The timing is right now, ever since the 26 committees that came together last fall and brought their reports to us, we've been working intensely on this since january three hard months, I'm into my fourth notebook of changes and additions and listening to conversations, and so the timing is right. Now, back with your question on the bep, I want to make make this point.

I

We will never to the satisfaction locals fully fund bep, because it's based upon ratios, we fund resources, one teacher to every 25 students or one teacher. Every 20 students are one nurse for every 3 000 students. As long as you try to fund based on ratios, you never fully acquitted.

I

We have 11 000 teachers hired across the state that are outside the bep formula of what we do so every year we set an education committee and we look for another 40 million dollars to bring the ratio of nurses from from one in 3 000 down to one in 750 or we try to get raises to teachers. It just doesn't work so this formula. The reason I really like this particular formula is because we are funding based upon the needs of the students.

I

You have your base, you have your weights, you have direct funding and so a school district that is really sharp is going to take this and they're going to do wonders school districts that don't we as a state have one more form of accountability. That accountability is now the funding right now. Their only accountability is really testing through this end, of course, the state test. So we are we're collecting data and we're saying oh you're only doing so well, because your students are only doing so. A third grade proficiency reading only one one in three.

I

Now we can say we are funding you fully based upon your student needs. Why are you not doing better? So there's a lot of advantages there, but back to the chairman's question we've discussed this year after year after year and so going to a student-based funding formula, in my opinion, is just something that fixes so many problems. It will not start until 2023 2024., so whatever we implement now it's got a whole year and we come back in january. We see something that needs fixing. We can. We can work on that. Does that help.

A

Yeah, thank you members. Any discussion. If you want to be recognized, please let me know I do have a question: let's, let's not jump too far ahead in fiscal year, 24., let's back up just for a second fiscal year 23.. I want to make sure I'm clear on this one. So the monies that you know we I've heard it said that high schools are going to be getting a million dollars. Middle schools are going to be getting 500 000.

A

I need a little more clarity on that and I know the department's sitting out there waiting patiently and for our questions and you guys have been doing a great job, but um I I think we're going to have to call them up because I I really would like to get a little more clarity on that. So if the department would go ahead and make your way up, I hope you ought to walk all the way over here and then not get to say anything so.

A

All right remember so without objection, we're going to go out of session so without objection we're out of session- and you all know the deal. So if you all would please go ahead and introduce yourselves.

D

Yes, sir penny schwing, commissioner of education,.

A

H

Piercy deputy commissioner.

N

Mary anderson, cfo.

M

Charlie buffalino assistant commissioner.

A

Of policy and legislative affairs- and thank you all for being here- and let me say this and and I'm not going to embarrass her, but I do want her to know folks, if you all want to know probably the most leaned on person in your school district, you can look at miss marianderski, because that is her. You think your phone rings a lot. I can assure you her phone rings a lot, and sometimes it's actually me calling. So uh it's good to see you marianne, thank you for being here.

A

So, let's just open that up and commissioner, if you want to take a stab or if assistant commissioner piercy, which everyone wants to take a stab talk us through the million dollars, that's going to high schools versus the 500 000, that's supposed to be going to middle schools. That's still to me just still a little a little bit confusing.

D

um Yes, sir, so appreciate that one of the things that I want to make sure to clarify is the the governor's proposal for 500 million dollars for cte programs would be separate, and apart from tsa, so just making sure that that's that's a one-time fund um that he is proposing in that proposal, uh it would include one million dollars for every high school. It also includes five hundred thousand dollars for every middle school or mixed model school.

D

Those are our schools that are maybe six to twelve um eight twelves things like that, um and then we have a few schools, uh just a small handful that are under 100 students. It does allow for 200 000 for those for those very, very small schools. The purpose of that is for the one-time cost of expanding innovative programs. You think about some of the early grants that we did under the federal relief funding.

D

We were able to fund over 20 innovative school models across the state, they're doing incredible things across the state in all different types of sectors. Some are doing ag tech, some are doing teaching as a profession. We've got forestry in the southwest, et cetera, et cetera, and so this essentially was looking at the the early results of that pilot and that group of districts that are working on innovative school models and then saying how can we expand and reshape and rethink the opportunities available for all students across the state?

D

The reason for the consistent amount for every high school and every middle school is that these are startup one-time expenses. Over a period of time, machinery is going to cost the same, no matter how many students go to your school building and we wanted to make sure that there was equitable access and opportunity for all students, whether they went to a very large high school or a very small high school, that every school would have the opportunity to start new and innovative programs.

D

We do expect the majority of the funds will be for the one-time equipment machinery, those types of costs, as well as the cost of building up programs and staff over a period of three to four years.

A

So walk me through how's, a middle school because I think about in my school district and five hundred thousand dollars, and and so what is the expectation like for for my school district, it's career exploration, uh that's kind of what what we would be focused on identifying that getting them prepared to go into the high school high school. So walk me through because four years I don't care how many years you give them middle schools. What what is still the expectation?

A

I don't think we're going to teach sixth graders how to weld so help me through that right. There.

D

Sure great question, and one of the things that we heard over the last specifically 12 months in particular, especially from our school districts, is that they wanted to have more opportunities for exposure and access in those middle school grades, but oftentimes that exposure and access was limited both because of financial reasons and also because transportation you either had to bring high school students and teachers to the middle school, and you might do a career, fair or vice versa.

D

Many of our districts are actually trying to think about building five and six year pathways, so students could start in sixth or seventh grade. They have a lot of their pre-courses that they can do in middle school and then they are ready to really dive into high-level coursework, starting as early as ninth grade. We also have some programs where districts were thinking about year treks.

D

So you have some career exploration that might happen in sixth and seventh grade students have an interest they're able to take two or three different classes in eighth grade really know if they like it or not before they actually enter that pathway.

D

In ninth, what we have seen trend wise is that, once you enter a program of study, if you like it, you stay, but if you don't you're either behind, because now you have to transfer into your sophomore year, you don't get four full years of that coursework or you kind of have to stick with something. You don't like you're, not going to enter that. So this is really about a bunch of middle schools who haven't had the funding before being able to start that now,.

A

Okay, thank you very much. Yes,.

D

A

Further discussion, leader, camper.

C

Thank you, mr chairman. I have a question about um inflationary costs. Can you all talk about how we plan to deal with the inflationary costs like right now? I think we have proposed in the budget um a teacher increase of about 4.5, and we know inflation is at about 8.5.

C

How do we plan to deal with inflationary costs over the years.

A

You're recognized.

D

Yes, ma'am and just to clarify, are you talking about? How do we currently do it in the bep or how it's proposed to be addressed in tisa or.

C

You could do both. I was talking about t so, but you can give us a comparison.

D

Okay, great, I will, um I will talk a little bit about how that would be under tisa and then we'll turn it over to marianne to talk a little bit about how that works in the bep.

D

So under tisa the process would be each year, as you all think, about appropriations and how how much you would want to put additionally into public education. That would be something you would put into the base. The base then allows you to have that multiplier effect within the weights. So, for example, I think the the statistic we always give or have been giving has been.

D

If you all decided, you wanted to put 100 million dollars towards teacher salaries or 100 million dollars in the base as a that's pretty consistent with what you've been doing over the last several years. That actually leads to 217 million more dollars for public schools because of how much the weights end up increasing.

D

So it's not five percent times sixty eight sixty, it might be five percent times sixty nine eighty, um so you get a much larger amount of investment and that helps to account for a lot of those inflationary components within a formula gas prices going up additional raises or increases for other staff. Members.

B

Later, cambridge.

C

Okay, thank you, and so, when you said we put in the budget generally, the governor is recommending to us a number.

C

Are you putting it on the legislative branch to decide how much we want to fund, or are we taking that power away from the governor to be and the administration to uh offer a number to us to consider explain that you're.

A

D

No ma'am: this is under the assumption that the governor would continue to propose a number, and you all would I'm just not making the assumption that you all just take that and rubber stamp it. So that's! Okay,.

C

D

Was a little concerned with that.

C

A

Leader camper is that it.

D

A

N

I was going to speak to the bep. Yes.

A

You recognized sorry.

N

Thank you currently in the bep, we take a look at a number of the unit costs and we look at a uh typically a three-year trend of what those costs actual costs were for materials and supplies, uh textbooks, professional development, those types of things, and we look at a three-year average of what the districts actually spend and apply an inflator to it.

N

We get the inflationary increase percentages from sieber the center for business and economic research at ut knoxville we get other increases from, for example, benefits administration and the medical insurance premium and tcrs on the retirement contribution. They project out those future costs and we incorporate those.

C

Leader camper, thank you. I appreciate your input.

A

Representative hall.

H

Thank you, mr chairman, and commissioner and your team. Thank you so much for the the time that has been spent on this and to echo what chairman hicks had said earlier. This has been an ongoing process. I've had potential legislation from the bep review committee for five or six years, and now it is being funded in the tisa plan. So, thank you very much.

H

Can you go down the road since we've got you in front of us now of some of the historical legislative initiatives that we've had talking about school nurses talking about school resource officers?

H

Additionally, specifically, if we could talk about coordinated school health and the director positions within those, if you could walk us down the pathway of of where those legislative initiatives from five six seven years ago are going to be now in the in the funding formulas.

H

You're recognized.

A

D

Yes, sir, happy too, so um there's a couple of different uh things. I would direct you to, I think, to the chairman's point earlier: we've had a bep review committee and pretty consistent recommendations for years and years and years almost exclusively, and you can go back to the first one I believe in 2004 and it's a recommendation get to get to the national ratio for nurses and counselors. We've seen some inclusion with rti and technology. Those have been some of the big repeaters over time, as well as teacher salaries legislatively.

D

I think we see the same thing typically any kind of proposal related to getting that counselor or nurse ratio to what the national recommendation is. We've also heard more recently, of course, additional conversation around technology and consistently over time, certainly about making sure that we increase educator salaries year over year in this formula um in thinking about some of those additional components.

D

When you look at the base of 6860, it's the 12th highest in the country, the second highest in the southeast, it is 125 million dollars more than those same components currently in the bep and that doesn't even cover the weights and the direct funding allocations.

D

So it does allow for additional funding for those critical positions like counselors and nurses within our school systems. When you look at coordinated school health, school safety and family resource centers, those are funded outside of the current bep. One of the other things to note is that not every school district receives that funding.

D

We have a number of school districts who do not receive funding for coordinated school health, for example, by bringing it into the formula. It ensures that every district gets funding for those critical programs, and it also ensures that the programmatic requirements within statute do not change so everything that was already programmatic, programmatically required, maintains within within current code.

A

Thank you. Our members, further discussion, questions.

A

Chairman williams,.

E

Chairman williams, you're recognized, thank you. I just had to go back to the cte question. A moment ago, the there were some discussions early on about the the million dollars for high schools, half a million for those uh hybrid models or straight out middle schools. I guess there was some discussion about whether the locals would be required to do a match or a percentage are.

E

Are these first dollars in uh or is there going to be a match in the language uh because you mentioned earlier about grants, and so obviously I don't think all of the middle schools in my district have a cte program, and so, which is why I understand the four years. But if you could talk about the match, if there is one what those responsibilities will be for the local, lea that'd be great. Commissioner you're recognized yes,.

D

Sir, so there's no local match these would be 100 state dollars as part of the planning process and support that the department would offer to districts, especially those who don't have middle school programs, for example.

D

It is about making sure that there's a way to keep the program sustainable over time, so helping people with that planning if t surpassed that there's some nice additional funding that can go and help with that sustainability, but it is 100 state funded that ramp up is because we know that it's going to take one two three years at the middle school level, three to four years at the high school level, to both plan, establish and implement a full program that can then be sustainable over time. Chairman.

E

Williams, so in those analysis of these individual programs, your department's going to ensure that they're not making uh reoccurring, expense uh commitments without with any of this million half a million two hundred thousand dollar number. Is that correct.

A

Do you recognize me.

D

Yes, sir, so one of the requirements in the grant application is that they have a fully uh baked sustainability plan, so we would not approve the application or disperse any funding until we see exactly how they would support that with their existing funding or what they would expect their existing funding to be recurring over time with zero expectation of additional funding. For that particular program.

E

You recognize so you expect most of these dollars to be spent on some kind of capital, improvement or purchase of equipment or things of that nature. I suppose.

D

Yes, sir, we would expect that the majority is going to be towards equipment, materials, etc. We also expect many of our districts will bring additional staffer support to help with startup costs a lot of times, that is with local industry and business. You can, you can bring them in there's uh for contractors, or maybe you bring in if you're starting a welding program you bring in folks who are in that profession within the local community to help advise et cetera but they're, all those one-time, startup costs.

D

I do believe the vast majority will be on machinery and equipment.

E

Chairman one final question, the uh one of the only as I I served on the workforce, one of the 18 committees. It was fantastic five o'clock in the afternoon what a great time for a.

D

E

Committee meeting but uh anyways that was a joke, but the uh I I will say one of the things that uh concerns me about this. A little bit is: we've done a great job. We heard from our bill sponsors about how we're funding education based upon not ratios, but upon kids, uh the big challenge, I I see or problem that might be with cte money is. I have three high schools in my county in the lea in my county.

E

I have one that has 2 700 students and I got one with 800 and they both get a million dollars right. The other one, I think, is around 400. so being able to deliver quality cte for those 20 2500 odd students that for a million dollars, seems uh completely different than in upperman. Where you know we we've got great facilities there, but they're, just not as many kids or not as many users.

E

So what's the argument behind just doing a a lump instead of doing using the same half a billion dollars as what that is per child.

D

Yes, sir, so it really is about those initial costs. So if you are um the last innovative school model I was in was in macon county in jackson county, they have a collaboration that they are doing. They have essentially for teaching as a profession, they've they've, created kind of a bus where you can go, and students are able to travel to different schools and and practice the art of being a teacher which is very exciting.

D

But the cost of that bus is going to be the same, whether you are in a school of 2700 students or you're in a school of 200 students. So knowing that the majority of those funds are going to be going to those one-time expenses that are going to cost the same, no matter what that was the thinking behind it versus the formula, which is that ongoing sustainability. And that's where you see that per student funding which really drives participation in those programs.

D

So this is really about the the cost is the same, no matter how many students are at the school. Yes, sir,.

A

Representative freeman.

P

Thank you chairman, uh and my question is, is maybe a little bit more specific as it relates to to davidson county. um My understanding uh is under the new funding formula. Davidson county will get roughly um 50 million dollars in in new funding.

P

Is that an accurate statement.

D

Yeah we're going to get you the exact number, but it's it's approximately that much yesterday.

P

And, and and if we're looking at um currently uh bp funds about 72, I'm I'm seeing tissa, this is from from actually from your department uh is going to generate about 778 to an increase of 48.8 million dollars is what what I'm seeing so a little bit less than 10 percent.

P

um What portion of that those dollars are locally funded versus versus state funded.

D

uh Yes, sir, so because we would use a tax receiver combo, the percent that any local district would would be responsible for that share is going to be the same under either formula it's calculated separately. Now the total amount that that is applied to is different under the bep. It is every dollar within the formula has some kind of local share that is either a 70 30, a 75 25 or a 50 50 split, and that's the statewide metro. Nashville's proportion of that is going to be different and that's fiscal capacity.

D

That is the bep ortiza. It is agnostic to the formula. It is actually one of the requirements that is outside of the control. Here, it's been, it's been ruled on previously under tisa one of the benefits, and this is why all of our locals, when you see that graph of how much they're going to have to spend under the bep versus how much under tisa it is less under tisa for every district in the state. That is because we do not apply a local share for every component of tisa.

D

We only do it for the base and the weights, meaning that the direct funding amounts are completely funded by the state and that's why that local bill is going to be lower again for every district in the state, and I think we've projected out to 2030. Other organizations have projected that out to 2035 and that is consistent again. Every district for the next 13 plus years. So.

P

Do you have the dollar amount of what that actual dollar amount of the state share is.

D

um We do and those have been sent to all of our districts sam's going to pull up what that is, if you're interested in a particular year, I'm happy to give you that information as well, if you're, just looking for the first year. First.

P

D

For davidson, county, 334 million will be state funded of the overall funding of 7.78.

P

And do we have a breakdown of what that that increase is under uh the new funding formula versus bep.

D

Bep would be they davidson county would have a higher bill under the bep than they would under tisa. Okay,.

P

D

Would have to pay more locally.

P

Okay, so so the the that the additional 48 million dollars that will be generated under tessa for.

P

Under this new program, what what percent is the state portion versus the local portion.

D

43 state, so it's 43 state um would be the additional. I want to just kind of separate the two parts of your question, so the first part is really about for the new money. How much is going to be state versus how much is going to be metro, nashville or davidson county? So that's that just over 40 percent is going to be state. The remainder is going to be metro.

D

That being said, all the additional funding going to metro, it is still going to be less under tisa that bill that they pay back to the state or the share that they or the contribution. Excuse me that they're going to have to put in that number is lower under tsa than under the bep.

D

So their percent of what they pay of the formula is going to be higher than the majority of districts in this state and their bill is still going to be lower because of how tiso works. We do not apply local share to the entire formula, so they are going to receive more money and pay less locally.

P

Okay. Thank you. Yes,.

D

A

And commissioner, can can you just so? I know as it's went through the committee process, I know there's been a couple. Amendments go on, so um what's the total just to get on record? What is the total amount of the new education funding formula.

D

Yes, sir, so it's um in the initial year, which would be this budget year, uh 750 million is put aside. It would be an additional just over 250 million in implementation, so in total it's 1.05 billion dollars approximately for the first year of implementation and then.

A

During that, first year of implementation, how much is in the base.

D

um In the base, it is 6.6 billion dollars, sir okay, just over.

A

D

The weights, all together, is going to be 1.756 billion.

A

And, of course, direct is still 80 million. Is that correct? Yes, sir? Okay and then just one thing about the ratios with bep? I know it was funded by averages and ratios, but so tessa is not using that to fund, but make no mistake about it.

A

Ratios are still incorporated in tesa, because you're not going to have one teacher and 45 kindergarten students, so those ratios are still there we're just not funding based on those ratios, so the funding again will follow the child, but again those ratios, so we're not totally you never get rid of the ratios. We're just not funding on ratios, so just want to make sure that that's clear members further discussion. Yes, sir representative wendell you're recognized.

B

Mr chairman, would I be out of order if I.

J

Introduce the rotc for the university of tennessee along with colonel whitson. Would you please make them welcome and if you could introduce them, I hate to jump out of line. Please.

A

J

I think they deserve that if you could yeah.

A

Colonel hold on one second turn that microphone on, so we can all hear and get this on the record here.

B

E

Us so uh your name and what you're majoring in and what branch you want to be in the right one: okay, under pressure, my name's.

B

Noah smith, I'm a senior at ut, knoxville, studying marketing and supply chain management- hopefully, hopefully stay here in tennessee, serving in the national guard and doing adjunct general. So a.g.

H

My name is william doro. I am a freshman at ut knoxville. I am studying political science pre-law and I'm looking to join the jag corps in the united states army.

B

Hi, my name is gabriel mcelier, I'm a junior and I'm studying international affairs and I'm hoping to do either logistics or air defense artillery.

B

Hi, I'm cadet ashley fahey, I'm a freshman and currently I'm studying kinesiology and I plan to branch somewhere in the combat arms. We'll see.

B

Mr chairman, with your permission, they've got a challenge coin. They want to present to you, uh but they may they enter the podium and present that to you, mr chairman, absolutely.

F

B

A

It probably is, it may be, but we're going to override and go ahead.

B

A

I want to make.

B

Sure that he's also a member of the tennessee national guard today, so we're glad to have him appreciate his service.

E

If there were a navy, we wouldn't let him do that.

A

Sorry, commissioner, you just got one up.

D

That's right, fantastic.

A

All right members, I don't have anyone else on the list, but would anyone else like to be recognized again we're on house bill 2143 all right, seeing none we're going to go without. Thank you all department. Thank you all for being here. Thank you very much.

A

So. Thank you, sir. Thank you. So without objection we're not to go, we are now going to go back in session we're now back in session. You are recognized leader lambreth for any closing comments. Thank you, mr chairman.

A

All right, we are any further discussion seeing none. We are now voting on house bill, 2143, moving on to full finance, all those in favor say: aye, all those opposed. No the eyes have it house bill 2143 will move to full finance members. Anyone would like to be recorded as a no, please make sure to let kara know.

A

All right members that does complete our business for today so do we have any further business coming before the committee that that completes our first calendar business. We will be back and later today, so seeing none, we will stand in recess until 2 pm today and we'll. We will be back here in house hearing room 1.. So without objection we stand in recess.

A