While House Minority Leader Craig Fitzhugh (D-Ripley) relentlessly pursued his education funding bill, HB 841, through passage in the House, the Senate sponsor, Jeff Yarbro (D-Nashville) wasn’t as successful with SB 831, and requested of the Senate Finance Ways & Means Committee that the bill be rolled to 2018.
The bill, originating in the House and rumored to be in exchange for Democratic votes in favor of the IMPROVE Act, used excess state revenues over-collected in fiscal years 2015-16 and 2016-17 in the amount of $250 million to be used for K-12 block grants that would be distributed by the Department of Education.
After passing through the House Finance, Ways & Means Subcommittee and Committee, Fitzhugh started by introducing Amendment 1 on the House floor May 9, which rewrote the bill to enact the Education Investment Act.
The Act creates the K-12 block grant program via a revocable trust to be administered by the state treasurer, with a board of trustees that would also include the comptroller of the treasurer, the secretary of state, the commissioner of education and the commissioner of finance and administration.
Amendment 1 passed by voice vote.
Rep. Sabi “Doc” Kumar (R-Springfield) sponsor of Amendment 2, which he introduced by saying, “Members, this bill creates an educational endowment in a trust.” Doc Kumar continued his explanation of the bill and his amendment,
The trust will hold investment money as well as management funds and distribute them in the form of K-12 block grants. There is a reporting requirement in the bill, but that is from the LEAs reporting back to the educational committees and to the department. There is no reporting requirement included as to where the trust receives the money, how the trust manages the money and how the money is distributed. This amendment adds that reporting requirement so that the education committee of the House and Senate as well as other officers avail of it.
Amendment 2 also passed by voice vote.
Fitzhugh explained the amended bill, which includes a new name, “This is the Education Investment Act. You heard me speak about it during the budget process.”
Let me tell you exactly what this bill does. This bill sets up the mechanism for such a thing. It is not funded in this year’s budget. It is funded with the hope that we will be able to go ahead with the funding. The simple explanation of it is that it is based off the Tennessee Promise whereby we take a fund of money and leave it whole as part of the rainy day fund and that we use the earnings off of this as they are earned by the special trustees that have this revocable trust responsibility. We let that money build and then on an annual basis, we distribute it to every single school district in this state based on ADM (Average Daily Membership) and each in their particular requirements that they could use this for.
The bill specifically states in Section 3 (e) “that no block grant funds shall be used for salaries or other recurring expenditures,” although Fitzhugh’s explanation seemed to contradict that by mentioning that the funds could be used for “Anything from reading coaches to adding more money on dual enrollment courses and anything in between.”
Chairman of the House Education Instruction & Programs Committee, Rep. John Forgety (R-Athens) and Chairman of the House Education Administration & Planning Committee, Rep. Harry Brooks (R-Knoxville), joined Fitzhugh during his presentation of the bill.
Fitzhugh referred to the chairmen as sponsors of the bill, “It is my hope, and these sponsors’ hope, that this will continue in the future and give us something that we can all be proud of as we go through and years from now and that the fund will continue to have a balance.”
Neither Forgety or Brooks are listed as sponsors on the Tennessee General Assembly website, but two Republican Representatives Susan Lynn (R-Mt. Juliet) and Jimmy Eldridge (R-Jackson) are listed as co-prime sponsors along with 13 Democratic Representatives Larry Miller (D-Memphis), Karen Camper (D-Memphis), Raumesh Akbari (D-Memphis), Johnny Shaw (D-Bolivar), Barbara Cooper (D-Memphis), Harold Love (D-Nashville), Mike Stewart (D-Nashville), G. A. Hardaway (D-Memphis), Rick Staples (D-Knoxville), John Ray Clemmons (D-Nashville), Jason Powell (D-Nashville), Dwayne Thompson (D-Cordova) and Antonio Parkinson (D-Memphis).
To Rep. David Alexander’s (R-Winchester) question on why he believes this fund is needed, Fitzhugh responded, “We’ve also put, it seems to me, an extra emphasis on higher education, especially with the Tennessee Promise. I just saw, and members of my caucus saw a situation where we could do that same thing for K-12.”
Alluding to utilizing the monies of the entire rainy day fund for the education endowment fund, Fitzhugh continued, “We could start a fund and let it continue, using the positive factors of a billion dollar rainy day fund and use the earnings that that threw off to help our K-12.”
The rainy day fund, as it is commonly called, or the Revenue Fluctuation Reserve, according to the 2017-18 budget document (Page xxvi, PDF sheet 26 of 558), “was $568 million on June 30, 2016, and is estimated to be $668 million on June 30, 2017. A recommended deposit of $132 million in fiscal year 2017-18 will have the total revenue fluctuation reserve at $800 million on June 30, 2018.”
After asking some basic questions on the fund, Doc Kumar asked what portion of the rainy day fund would go into the endowment. Fitzhugh, alluding to some of the issues he has had in getting the funding, replied, “Let’s just say that if we had success in funding it this year, how it would be funded it would be funded with some of the one-time money that we had a heck of a lot of and that was the reason why I was really trying to get it done this year, it just didn’t have the opportunity and it got balled up in some other issues. But it is my hope that next year if things continue when we have all that one-time money that instead of well maybe the Governor will go along with it.”
Fitzhugh continued with a sentiment expressed by other legislators this session, “Instead of letting the Governor spend all that money,” continuing, “maybe we as legislature can take some of the one-time money, put it in that fund and we just sock it away in the rainy day fund and let those earnings build up and go to these schools.”
After several more probing and detailed questions, Kumar politely asked the question that was perhaps on the minds of many, when he said, “Mr. Leader, you are a very honest and a gracious man. Is this a part of the IMPROVE Act?”
Fitzhugh responded, “No sir, the IMPROVE Act had to do with roads. And, unfortunately, one of the reasons I think this thing didn’t pass was because everybody thought it was a part of the improvement act. But you see I’m up here and I’m trying to pass it in the House without any funding. If it was a deal made, it wasn’t a very good deal on my part, was it.”
To which Kumar responded, “I’m glad to bring it out in the open. We don’t want to go away from here with things that are heavy on our heart. Thank you.”
Rep. Terri Lynn Weaver (R-Lancaster) asked some questions on how the funds are allocated and the visibility to the legislative body. After acknowledging that education is priority for Leader Fitzhugh and herself, Rep. Weaver referred to the biggest issue the legislature addressed this session, “We fought long and hard to make transportation a priority, and I sure would have liked to take all that surplus money and put it on roads and bridges,” which was met with applause.
Rep. Weaver concluded by saying, “I do thank you for bringing this, but I’m just not really sure I’m on board.”
Rep. Roger Kane (R-Knoxville) brought up concerns about how education funds can be misused even when the usage is prescribed by the legislature.
Fitzhugh’s explanation about how the distribution of these block grants would be based on ADM (Average Daily Membership) versus BEP (Basic Education Funding) apparently didn’t convince Kane.
Kane responded, “But what happened yesterday showed me a total lack of faith into the systems that we have set up to make sure that money that this body delegates. And by the way, the rural counties are going to get stuck. They’re not going to get as much because they don’t have the ADM as the bigger counties. So, your cities are going to get more than your rurals and so, with that, I’m out.”
With no further discussion, the House voted to approve HB 841 by a vote of Ayes 56, No 30, PNV 1.
The lone Present Not Voting (PNV) was Speaker Beth Harwell (R-Nashville), who spoke at a Tennessee Education Association meeting three days prior.
Meanwhile, the Senate sponsor of the bill, Jeff Yarbro (D-Nashville), asked to roll companion bill SB831 to 2018, stating, “Based on my conversations with the Chairman and some members of the committee, I think this may be worthy of a longer conversation than I sense to take on right now.”
The House votes on HB 841 were as follows.
Aye: Raumesh Akbari (D-Memphis), Bill Beck (D-Nashville), Harry Brooks (R-Knoxville), Kevin Brooks (R-Cleveland), David Byrd (R-Waynesboro), Karen Camper (D-Memphis), Dale Carr (R-Sevierville), John Ray Clemmons (D-Nashville), Jim Coley (R-Bartlett), Barbara Cooper (D-Memphis), Barry Doss (R-Leoma), Bill Dunn (R-Knoxville), Jimmy Eldridge (R-Jackson), Jeremy Faison (R-Cosby), Andrew Farmer (R-Sevierville), Joanne Favors (D-Chattanooga), Craig Fitzhugh (D-Ripley), John Forgety (R-Athens), Ron Gant (R-Rossville), Brenda Gilmore (D-Nashville), Tilman Goins (R-Morristown), G. A. Hardaway (D-Memphis), Gary Hicks (R-Rogersville), Matthew Hill (R-Jonesborough), Timothy Hill (R-Blountville), Bud Hulsey (R-Kingsport), Darren Jernigan (R-Nashville), Curtis Johnson (R-Clarksville), Sherry Jones (D-Nashville), Kelly Keisling (R-Byrdstown), Ron Lollar (R-Bartlett), Harold Love (D-Nashville), Susan Lynn (R-Mt. Juliet), Pat Marsh (R-Shelbyville), Judd Matheny (R-Tullahoma), Gerald McCormick (R-Chattanooga), Steve McDaniel (R-Parkers Crossroads), Larry Miller (D-Memphis), Bo Mitchell (D-Nashville), Antonio Parkinson (D-Memphis), Jason Powell (D-Nashville), John Ragan (R-Oak Ridge), Courtney Rogers (R-Goodlettsville), Jerry Sexton (R-Bean Station), Johnny Shaw (D-Bolivar), Eddie Smith (R-Knoxville), Rick Staples (D-Knoxville), Mike Stewart (D-Nashville), Art Swann (R-Maryville), Dwayne Thompson (D-Cordova), Joe Towns (D-Memphis), Ron Travis (R-Dayton), Johnnie Turner (D-Memphis), Micah Van Huss (R-Jonesborough), Mark White (R-Memphis), Sam Whitson (R-Franklin)
No: David Alexander (R-Winchester), Sheila Butt (R-Columbia), Kent Calfee (R-Kingston), Mike Carter (R-Ooletwah), Glen Casada (R-Franklin), John Crawford (R-Kingsport), Michael Curcio (R-Dickson), Martin Daniel (R-Knoxville), Marc Gravitt (R-East Ridge), Curtis Halford (R-Dyer), David Hawk (R-Greenville), Andy Holt (R-Dresden), Roger Kane (R-Knoxville), Sabi Kumar (R-Springfield), William Lamberth (R-Cottontown), Mary Littleton (R-Dickson), Jimmy Matlock (R-Lenoir City), Debra Moody (R-Covington), Mark Pody (R-Lebanon), Jay Reedy (R-Erin), Bill Sanderson (R-Kenton), Cameron Sexton (R-Crossville), Paul Sherrell (R-Sparta), Mike Sparks (R-Smyrna), Bryan Terry (R-Murfreesboro), Rick Tillis (R-Lewisburg), Terri Lynn Weaver (R-Lancaster), Dawn White (R-Murfreesboro), Ryan Williams (R-Cookeville), Jason Zachary (R-Knoxville)
Present, Not Voting: Speaker Beth Harwell (R-Nashville)