Tag: Copeland Cap

Tennessee Legislature Votes to Grow State Government $3 Billion and 16 Percent More than the Growth of Tennesseans’ Incomes

Laura Baigert
Tennessee Capital building

Members of the Tennessee General Assembly overwhelmingly passed a bill Thursday that acknowledges that the growth in state government this year exceeds the growth of Tennessean’s income by $3 billion, or 16 percent.

The action by the legislature is mandated by the Tennessee Constitution in Article II, Section 24 when state spending grows faster than its economy.

The measure, commonly known as the Copeland Cap, was named for its House sponsor of the constitutional amendment, the late Republican State Representative David Copeland of Ooltewah, who passed away in 2019.

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‘Copeland Cap’ Hits Decade-Long High in Fiscal Year 2019-2020

Laura Baigert

A bill passed by the Tennessee General Assembly last week reveals that in fiscal year 2019-2020 the Copeland Cap, at $629 million or 3.6 percent, hit its highest level in more than a decade.

The legislation, which passed as HB2819 in both chambers on March 19 with only one “no” vote by Democrat Representative G. A. Hardaway (D-Memphis), was one of the four bills addressed in an expedited fashion to enact a bare bones budget before lawmakers recessed until June 1 amid the COVID-19 health crisis, The Tennessee Star reported.

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Tennessee Attorney General: Rainy Day Fund Monies Excluded From the Copeland Cap

Laura Baigert

  Tennessee’s Attorney General Herbert Slatery issued an opinion in 2018 in response to a legislator’s inquiry indicating that allocations to the reserve for revenue fluctuation account, otherwise known as the Rainy Day Fund, do not count toward the Copeland Cap. State Senator Brian Kelsey (R-Germantown) (pictured left) requested an opinion from the state’s Attorney General (pictured right) to two separate questions on the topic. Specifically, Senator Kelsey’s two questions to the Attorney General were: In determining whether “the rate of growth of appropriations from state tax revenues exceed[s] the estimated rate of growth of the state’s economy” under article II, section 24 of the Tennessee Constitution, are funds that are allocated to the “reserve for revenue fluctuation” included in “appropriations from state tax revenues”? (emphasis added) And In determining whether “the rate of growth of appropriations from state tax revenues exceed[s] the estimated rate of growth of the state’s economy” under article II, section 24 of the Tennessee Constitution, are funds previously allocated to the “reserve for revenue fluctuation” included in “appropriations from state tax revenues” in the year in which the funds are withdrawn? (emphasis added) The Attorney General opined in 18-05 that the answer to both questions…

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Ten Months Into the Fiscal Year, Tennessee’s Revenues Exceed Estimates by $556.7 Million

Laura Baigert

  A press release issued Friday by Department of Finance and Administration Commissioner Stuart McWhorter announced that Tennessee’s May revenues were $46.3 million more than the state budgeted for the month. Also reported was that total tax collections by the state so far this year exceeded the estimates by more than a half billion dollars. On an accrual basis, May is the tenth month of the 2018-2019 fiscal year, which runs from July 1 to June 30. McWhorter said that the more-than-estimated May revenues demonstrated sound growth over the same period last year. “Both sales tax and corporate tax revenues were the largest contributors to the month’s growth and taken together continued to outperform expectations, as they have for most of the year. All other tax revenues, taken as a group, were also more than the May estimates” reported McWhorter. Despite cuts made in the IMPROVE Act, or 2017 Tax Cut Act, to the Franchise & Excise Tax and Hall Income Tax – which will be fully repealed beginning January 1, 2021 – as well as Sales & Use Tax on food, the highest revenue increases this year come from these taxes. Sales & Use – $257 million or 3.41%…

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Commentary: Finance Chair State Rep. Charles Sargent Misrepresented Copeland Cap on House Floor in Budget Debate

Laura Baigert

  During his presentation of the budget bills during the House floor session Friday State Representative and Chairman of the House Finance, Ways & Means Committee, Charles Sargent (R-Franklin) misrepresented the Copeland Cap constitutional amendment several times. Charles Sargent has served in the Tennessee House since 1997, became a member of the House Finance, Ways & Means Committee in 2003, Vice-Chairman in 2009, and Chairman in 2011, a role in which he continues to serve. The 1978 amendment to Article II, Section 24 of the Tennessee constitution, named for its sponsor former Representative David Copeland, states, “In no year shall the rate of growth of appropriations from state tax revenues exceed the estimated rate of growth of the state’s economy as determined by law.” In the specific case of Sargent presenting HB 514 to the House membership for passage as part of the budget, the operative word is “appropriations,” when referring to growth by the state, not revenues as Sargent maintains throughout the discussion on the bill. According to Merriam-Webster, the definition of appropriation is “money set aside by formal action for a specific use,“ whereas the definition of revenue is “the yield of source of income (such as taxes)…

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State Sen. Todd Gardenhire Pushes Unsuccessfully For Taxpayers To Be Compensated For Surplus Revenue

Wendy Wilson

NASHVILLE, Tennessee — State Senator Todd Gardenhire (R-Chattanooga) on Wednesday made a pitch to compensate Tennessee taxpayers for surplus revenue. He was a lone voice, however, before the Senate Finance, Ways and Means Committee voted 10-1 for a bill that allows the money to be used for government spending. Gardenhire was the only one who voted against the proposed legislation. The bill authorizes state spending to exceed growth in revenues by $438 million, or 2.85 percent, for the current fiscal year. The bill is a way around the Copeland Cap, which says that spending should not exceed the growth of the state’s economy, measured by estimated growth in personal income in the state. Added to the state constitution in 1978, the budget restraint provision is named for former Republican State Rep. David Copeland. The General Assembly can disregard the cap with a simple majority vote, which has happened numerous times. During a discussion before Wednesday’s vote, Gardenhire exchanged tense words with Senate Majority Leader Mark Norris (R-Collierville), the bill sponsor in the Senate. Gardenhire said he didn’t want to see the Copeland Cap undermined. Norris snapped that lawmakers should stop collecting so much in taxes if they want to avoid this…

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House Finance Ways and Means Committee Votes to Break The Copeland Cap

Laura Baigert
Tennessee Star

At the final stop before the full House makes its first of three votes on Governor Haslam’s 2017-18 $37 billion state budget, the Finance, Ways & Means Committee finalized the bills required to move the budget on, including HB 514, which Chairman Charles Sargent (R-Franklin) referred to as the “indexing bill” or Copeland Cap. The Copeland Cap is the 1978 amendment to Article II, Section 24 of the Tennessee constitution that states,  “In no year shall the rate of growth of appropriations from state tax revenues exceed the estimated rate of growth of the state’s economy as determined by law.” The amendment was named for its author, former state Representative David Copeland of Ooltewah. As reported by The Tennessee Star, with the growth of state revenues, lawmakers were expected to have to break the Copeland Cap. That was confirmed Wednesday, when Chairman Sargent presented the bill to the committee, saying, “Revenues have grown and collections in the 16 budget that was not recognized in 16.  That money has been placed over into the 17-18 budget.  So we have to recognized that we went over.  We went over by 2.85 over and above the Copeland Cap.” No further details were provided as…

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Haslam’s Gas Tax Increase May Force Tennessee Lawmakers to Violate the Copeland Cap Amendment to State Constitution

Laura Baigert
Tennessee Star

Governor Haslam’s 2017-18 budget that incorporated IMPROVE Act and other spending promises now exceeds the constitutional budget growth limit established by the 1978 amendment to Article II, Section 24 of the Tennessee Constitution that states, “In no year shall the rate of growth of appropriations from state tax revenues exceed the estimated rate of growth of the state’s economy as determined by law.” The amendment is known as the Copeland Cap, named for its author former state Representative David Copeland of Ooltewah. The General Assembly will now be forced into a position of voting to break a constitutional commitment to the taxpayers, or appear as the “villains” by taking away the “gifts” the Governor has promised. The 2017-2018 budget estimates appropriations from state tax revenues will be $17.9 billion, which represents an 8.3 percent growth over appropriations from tax revenues in the 2016-2017 state budget at $16.5 billion. The estimated rate of growth of the state’s economy for the 2017-18 budget year, as defined by state law, is 4.6 percent over the 2016-17 budget year. The governor’s budget, as currently structured with the IMPROVE Act, will therefore violate the Copeland Cop by 3.7 percent. The relevant law, Tennessee Code Annotated (TCA) 9-4-5201 states that the basis…

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