TennCare's rescue from the brink of collapse, Gov. Don Sundquist's recommended funding increases for education, and broad-based legislative recognition of the need for them, all stand for the proposition that good things really can happen in the state of Tennessee.
Indeed, this past week could mark a crucial turning point toward converting Tennessee from a no-can-do state into a state that can. Enacting the $800 million in tax increases needed to cover the governor's recommendations obviously remains the stumbling block. But where there's as much will as legislators of nearly every stripe are now exhibiting, there may just be a way.
TennCare's rescue provides the most dramatic evidence of Sundquist's new-found ability to solve problems that seemed intractable. Getting Blue Cross Blue Shield to re-enlist as a full-fledged managed care organization overcame a year-long schism between Blue Cross and the state. While that was a prerequisite for sustaining MCO capacity sufficient to provide health care coverage to TennCare's 1,350,000 enrollees, it was by no means the only one. Doctors had been deserting TennCare in droves, jeopardizing the ability of any MCO to deliver adequate care. But Sundquist's appeals to medical groups are starting to reverse the trend.
During two meetings at the governor's mansion in January, doctors, hospital officials, and other health care providers got an attentive ear to their grievances. "Out of that came a number of things that the state was willing to do to improve the program," says Dr. Barrett Rosen, a Nashville orthopedist who is president of the Tennessee Medical Association. Foremost among them: getting rid of "hassle factors" that make it difficult for doctors to get paid. "The governor and John Tighe [TennCare's overseer] said, 'We will make it happen,' and when they do, my [orthopedic] group will reconsider its decision not to participate."
Enough apparently have already done so to enable a newly formed MCO, Better Health Plans, to build a provider network sufficient to pick up the slack when Blue Cross reduces its TennCare patient load from 600,000 to 300,000 in June.
At the same time, Sundquist appealed, both publicly and privately, to TennCare enrollee advocate Gordon Bonnyman "to come to the table not the courts" with his advocacy. Bonnyman's resultant willingness to renegotiate the terms of a consent decree with the state that MCO's find onerous clinched Blue Cross's decision to re-enlist in TennCare, according to its spokesman, Ron Harr.
Bonnyman, for his part, says, "The governor poured enormous energy and personal capital into all of this, and he deserves enormous credit."
Sundquist's success in reshaping the terms of the debate on the state's budgetary bind is equally remarkable. Two years ago when he presented a tax reform plan to cover a $300 million deficit, the reforms were portrayed almost as an end unto themselves. And absent a compelling case for raising more money, they met with resounding rejection. So did last year's morphed version of them that called for a 4 percent income tax coupled with a reduction in the state sales tax from 6 percent to 4 percent.
Now, the governor has built a climate of acceptance for educational needs that are the biggest factors in a proposed $650 increase in state spending for the fiscal year ahead. (The use of one-time sources of funding and other gimmicks to shore up the current year's budget pushes the total need for additional revenues up to $800 million.) The issue framed before the Legislature now is not whether to fund the increases, but how. While the answer to that question is still enigmatic, the sheer fact it's being posed that way represents a lot of progress.
In the case of higher education, UT president J. Wade Gilley and his chief lobbyist, Tom Ballard, have contributed mightily to that progress. So now is the state's new Commissioner of Finance Warren Neel, who is on leave from his post as dean of UT's College of Business. Legislators who used to question UT faculty salaries, such as Sen. Tim Burchett, are now on board for making them competitive with those of other state universities.
Out of $103 million in additional outlays for higher education, Sundquist's budget includes a $20 million (or 5 percent) increase in UT's operational funding. There's an additional $7.5 million for Gilley's Centers of Excellence program, and UT will also get a share of $10 million allocated statewide for recruitment and retention of key faculty members, over and above the 3 percent raise recommended for all state employees. A separate capital improvements budget includes $23.5 million for long-overdue renovations and an addition to the Glocker Business Building. You can begin to feel the grappling hooks lifting UT out of the bog in which it's been mired for the past decade.
At the other end of the educational spectrum, Sundquist's recommended $97 million start toward a five-year, $400 million reading initiative for four-year olds is both pedagogically and politically astute. Study after study has shown that pre-school preparedness is one of the most important factors in school achievement. And it's one that every parent and grandparent can relate to.
Sundquist's previously proposed "flat tax" on sales and income still represents by far the fairest solution to Tennessee's revenue shortfall. But the governor is tired of playing Don Quixote. The trouble is that his motley array of alternative tax proposals casts him as Rube Goldberg.
Proposed extension of the state's sales tax from sales to services is worthy in the abstract. But the biggest hunk of revenue would be derived from the health care field, and taxing doctor and hospital bills is just as bad as taxing groceries. Sundquist's proposal for including compensation in excess of $72,600 in the income of professionals that would be subject to the state's 6 percent tax on business income tries to close the tax dodge that professionals now enjoy. But it is unfair to tax the incomes of lawyers making $125,000 in private practice when corporate or governmental lawyers earning the same amount go untaxed.
Perhaps the inequities of Sundquist's latest tax proposals will revert support to his previous, much fairer plan. But that is probably wishful thinking. Chances are that whatever the Legislature comes up with will not be pretty, and the process of getting there will be even uglier. But a seeming legislative resolve to do something about the state's fiscal deficiency is the most important thing at this point.