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NASHVILLE — As Tennessee Gov. Bill Lee delivers his second State of the State address and unveils his annual spending priorities Monday, the Republican businessman faces challenges not just from Democrats but even from his fellow majority Republicans.

With state revenues and budget surpluses continuing to soar, Democrats are calling on Lee to inject an additional $1.5 billion annually into K-12 public education, amounting to about a 25% increase over the current $5.25 billion in the state's share of spending. And they're demanding changes to the state's school funding formula, as well.

Republicans, meanwhile, want additional tax cuts, tax holidays or both. And some want to short-circuit federal funding for Lee's plan to accept a limited number of refugees.

The governor this year is also dealing with a new House speaker, Cameron Sexton, R-Crossville. Sexton displayed more willingness to part ways publicly with Lee than Glen Casada, the former speaker.

Casada was forced to step down last year amid a blowup over leaked sexually explicit and racially charged texts exchanged with a top aide. But part of Casada's woes stemmed from a number of GOP lawmakers' resentment of his hard-charging ways, including forcing through Lee's school voucher-like program for students to attend private schools at taxpayer expense.

Making no mention of that, Lee said in a statement he is "looking forward to sharing my vision for the future of Tennessee, including my legislative and budget priorities for this year."

"We have made remarkable progress during my first year in office, and thanks to the support of the General Assembly, I believe we will continue to make our state a leader in the nation and create a brighter future for those who call Tennessee home," the governor said.

He is scheduled to speak at 7 p.m. Eastern Standard Time. The speech will be livestreamed at http://www.capitol.tn.gov/.

Pre-State of the State skirmishing

House and Senate Democrats last kicked into high gear last week as they called for more education funding.

"We've heard the governor talk about this notion that Tennessee schools are fully funded," said House Democratic Caucus Chairman Mike Stewart, who represents Nashville. "That's just not true, as everybody who is in our schools knows."

Rep. Yusuf Hakeem, D-Chattanooga, said it "concerns me that we have these surpluses. We cut taxes in different areas but we have not made in my view public education a priority. Which leads into what we will look like as a state going forward. We need to be educating our young people."

Speaking with reporters later, Lee said "our public school systems are the foundation, the future of this state. If we invest in them significantly and we invest in school teachers, which we plan to do, and we invest in school leaders and we recognize that the future of Tennessee [is], if we want to lead the country, we're going to have to lead in education."

Noting the "vast majority of our kids are educated through our public school systems," the governor said, "I have a deep committment to them. You'll be seeing that as we roll out our budget next week and the State of the State. We'll talk about why I'm deeply committed to public education."

Lee said he expects to talk about "our intent is to turn the tide particularly and specifically around early childhood education, literacy. Those are all important issues."

House Majority Leader William Lamberth, R-Portland, was less diplomatic toward Democrats.

"Unfortunately, while the Democrats were in control of this chamber and all of state government, we were 49th in education," Lamberth said. "Republicans put $1.5 billion into education. We put methods and methodology into supporting teachers and students. I'm tickled to death our friends across the aisle have finally joined us in our efforts to try to improve education."

The additional $1.5 billion in funding came over seven years or so, Lamberth said in response to reporters' questions.

With Tennessee students now ranked in the 30s among states, according to a major national measure, Lamberth said the state can do even better and he is "very eager to see that we will have another major investment in [Lee's] K-12 education" proposal.

One thing is virtually certain when Lee presents his budget. Barring economic catastrophe, Tennessee will have more money in fiscal year 2020-2021 than its current $39.1 billion total budget, which includes $14.2 billion courtesy of Uncle Sam. The State Funding Board, infamous for ignoring economists' projections and substituting its own low-ball estimates, in November projected state revenue growth of between $354 million and $408 million.

In the current budget year which runs through June 30, the board recognized there could be between $430 million and $500 million over FY 2019, which ended June 30.

Friendly fire

Rep. Ron Gant, R-Rossville, has filed legislation to challenge Lee over refugee resettlement. The governor, who has worked in the past with faith-based Christian groups helping refugees overseas, announced the state would participate in the program after President Donald Trump agreed to let state governors decide whether they want to enage with a scaled-down program with far fewer refugees.

Asked what legal authority state lawmakers have to block that, Gant said the Tennessee Constitution says "the governor cannot legally obligate [funds]. That's our job. And that's all this bill is pretty much saying. just come before us and let us have the approval process on that when it obligates the state taxpayers."

Reminded that the resettlement program is funded with pass-through federal dollars, Gant said, "a lot of those federal dollars have been exhausted. To my knowledge, there's been no federal dollars that have come into the state."

Standing beside him, Speaker Sexton weighed in, saying, "I would add that money is also being taken away from Tennesseans as well. So there's people in Tennessee who would need that money." He cited the federally funded welfare program known as Temporary Assistance to Needy Families.

"So that refugee resettlement money coming in would take money away from Tennesseans who could be eligible for that program," Sexton said.

Lee told reporters that "I think that we agree to disagree. Oftentimes people do on a lot of subjects. Some members of the Legislature don't agree with the decision I made and that's part of what happens. But agreeing to disagree is fine. I feel the same way that I have about the importance of allowing a limited number of highly vetted refugees into the state, something I continue to have conviction on and feel strongly about. — Some agree with it. And that's part of what happens."

TANF, prisons and alternative sentencing

After a state-based libertarian research institution revealed Tennessee had a whopping $732 million reserve of unspent TANF funds — he inherited that from his predecessor — Lee's Department of Human Services chief announced a plan to use about half of the block grant money to improve services by assisting families in areas such as education and transportation.

Legislative Republicans, who created a bipartisan task force to look into the issue, squawked. The administration pulled back its proposal and is now working with task force members.

Lee's administration also inherited major problems involving state prisons and facilities operated under contract with Nashville-based, for-profit company CoreCivic.

A searing state comptroller audit slams both the state and CoreCivic over understaffing, sexual assaults, inadequate health care and the misclassification of some inmates' deaths as natural.

Lawmakers are upset. And, as a result, Lee could become the first Tennesssee governor in years to pay a great deal of attention to state prisons. Democrat Ned McWherter as House speaker witnessed firsthand problems that led to a U.S. District Court's appointment in 1983 of a federal master. It led to the state spending hundreds of millions of dollars to build its way out of overcrowding, overhaul sentencing laws and take other action.

As the state's two-term governor, McWherter worked diligently to get the state from under federal oversight, finally succeding in November 1994 before he left office in 1995.

Lee, who worked as a volunteer with a prison ministry before his election, now faces financial and other challenges in setting Department of Correction operations.

At the same time, the governor created a task force to examine Tennessee sentencing laws and is likely to look at some of its recommendations for overhauling them with an eye toward allowing some types of nonviolent offenders to be sentenced to non-prison settings providing drug and alcohol treatment, job training and other aid to keep them out of future trouble.

Rep. Robin Smith, R-Hixson, said when it comes to Lee's speech and spending priorities that, "I think we're all kind of hoping to see some updates on the governor's agenda. He really ran on some education reforms, he really ran on judicial reforms and health care, which is something near and dear to my heart, so I'm kind of anxious to hear what his ideas of reforms could be and what his specifics are in the year ahead."

Contact Andy Sher at asher@timesfreepress.com or 615-255-0550. Follow him on Twitter @AndySher1.

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