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Haslam presentation to bond-rating agencies says state 'will' do outsourcing
NASHVILLE - Meeting with New York bond-rating agencies this month, Gov. Bill Haslam and other top officials presented a picture of a state at the top of its game: making strides to grow new jobs and boost educational achievement while keeping taxes low and having perhaps the lowest per-capita debt ratio among all 50 states.
"When you look at the statutory, financial and operational structures in place, Tennessee is the standard," the state boasted in a PowerPoint presentation as officials seek to maintain the state's triple-A bond ratings ahead of issuing new bonds.
Haslam and fellow Republicans including Comptroller Justin Wilson, Treasurer David Lillard, Secretary of State Tre Hargett, House Speaker Beth Harwell and Finance Commissioner Larry Martins made the presentations Oct. 8 and 9. The Times Free Press obtained a copy of the presentation.
Here are some of the points Tennessee officials pushed:
* Long-term growth patterns showing the sustainability of Tennessee's economy include state Gross Domestic Product growth of above 2 percent from 2010-2014, driven by durable goods GDP growth of 30 percent, and outperforming U.S. GDP growth of 1.89 percent. The state says that makes Tennessee No. 1 among Southeastern states.
* Employment growth has been strong and continues to build. Per capita income, entrepreneurship and educational opportunities continue to "flourish."
* Among Southeastern states, Tennessee's state and local taxes as a percentage of personal income are the lowest, except possibly for Florida. Both are slightly above 8 percent, below the overall U.S. rate of 10.5 percent.
* Tennessee's $568 million Rainy Day Fund, TennCare's $307 million reserve and $900 million in other reserves total $1.81 billion and equal 11.7 percent of state appropriations and 5.3 percent of total appropriations. The Rainy Day reserve fund has doubled since its fiscal 2011 low point and now equals 4.5 percent of general fund revenue.
* Tennessee's "strongly-funded pension plan" has a combined funded ratio of 98.87 percent. Officials point to a money-saving pension reform that moves state employees and teachers hired after June 30, 2014, from a traditional defined-benefit plan to a "hybrid" plan. Those employees contribute part of their pay to their pension fund and can choose their own investments or allow the state to manage them. The Tennessee State Employees Association has raised concerns that could hurt efforts to attract and keep new workers.
* The state's unfunded liability for "other post employment benefits" has fallen by $480 million over the last five years. And officials note a 2015 law eliminates health benefits for retired state employees hired after July 1. The state expects to save money. The presentation also cites Haslam's reforms that effectively ended many civil service protections.
* Tennessee ranked No. 12 in the U.S. in nonfarm employment growth between June 2009 and August of this year. The state's 10.4 percent growth beat the 8.7 percent U.S. average and was higher than any of the eight surrounding states, including Georgia (9.3 percent) and Alabama (3.7 percent).