NASHVILLE - House Finance Committee Chairman Craig Fitzhugh on Thursday questioned Senate Republicans' delay of a $262 million bond bill to help the state meet its infrastructure commitments to Chattanooga's Volkswagen plant and Hemlock Semiconductor Corp.'s proposed factory in Clarksville, Tenn.
"You'd rather not have to borrow any money, but to me this seems the best alternative," said Rep. Fitzhugh, D-Ripley, who is sponsoring the bond proposal.
Because of revenue shortfalls, Democratic Gov. Phil Bredesen wants to issue $170 million in general obligation bonds to fund commitments on the Volkswagen project and another $92 million for commitments at the recently announced Hemlock project.
The bonds would help the state avoid dipping into its rainy day fund, which officials hope to use to deal with shortfalls.
The bill moved Wednesday through a key subcommittee, but Senate Minority Leader Jim Kyle, D-Memphis, delayed Senate Finance Committee action, noting there was "some level of uncomfortableness." He said Thursday that Republicans indicated to him that they were not ready to go forward.
Sen. Bo Watson, R-Hixson, a Finance Committee member in whose district the Volkswagen plant is going, said Wednesday he and other Republicans want to see if federal stimulus funds might be used to cover all or part of the state's commitments instead of issuing bonds.
The senator, who has not signed on as a sponsor of the bond bill, said issuing bonds would be a departure from recent state policy. But he emphasized he and other Republicans fully intend to honor state obligations to Volkswagen and Hemlock.
"We are committed and I believe everyone on the Finance Committee is committed that all of this is going to be taken care of," he said. "This is a question of the methodology, how do we go about fulfilling that commitment?"
Noting the state is spending large sums for VW, which is building a $1 billion facility, and for Hemlock, which plans a $1.2 billion plant, Rep. Fitzhugh said other areas of the state could use the stimulus funds.
Sen. Andy Berke, D-Chattanooga, a bill co-sponsor, called the state obligations "critical" to Chattanooga and said, "I will be fighting for any mechanism that brings jobs to the Chattanooga area."