Managing within the $30 billion debt limit set for it by Congress in 1979 has led the Tennessee Valley Authority to adopt a number of innovative but, by its own account, costly financing techniques. Some of these techniques could affect payments in lieu of taxes to states in the region. Most TVA states, like Tennessee, use the funds as general revenue and share much of it with local governments. Tennessee is by far the single largest recipient of TVA’s payments in lieu of taxes, drawing more than 60% of the total since 2011, and distributes close to half of that money to cities and counties.
TVA’s new financing arrangements, in particular, sale-and-lease-back agreements, could change the amount of revenue available for state government to fund its own budget and to share with Tennessee’s cities and counties. This information comes to light in an annual report by the Tennessee Advisory Commission on Intergovernmental Relations. TACIR has been asked by the state legislature to monitor possible effects on TVA’s payments to the states.
The report also notes that TVA’s estimated payments in lieu of taxes for the region for federal fiscal year 2012-13 are expected to be around $537 million, $43 million less than the $579 million in actual payments for federal fiscal year 2011-12. This is only the second time since 2000 that a decrease from one year to the next has occurred. The projected decline comes as a result of the slowing economy, mild weather, and the potential loss of its largest customer, the US Enrichment Corporation, because of the impending closure of the Paducah Gaseous Diffusion Plant in Kentucky. The decline in estimated payments to Tennessee amounts to slightly more than $1 million in the distribution to county governments, $462 thousand to cities, and approximately $2.0 million to the state and its agencies. In most cases, the loss to counties and cities amounts to only a few thousand dollars. (Full Report)
The Tennessee Advisory Commission on Intergovernmental Relations (TACIR), your forum for discussion and resolution of intergovernmental problems, is conducting a short, on-line customer satisfaction survey. The link below will take you to the survey. Please take a few minutes to complete the survey.
Your feedback is important to us as we strive to improve our research and publications. Please contact our Director of Administration, Michael Timme (741-3483), should you have any questions about the survey. And be sure to check out the web site Tracking Tennessee’s Economic Recovery, sponsored by the Commission and maintained by Middle Tennessee State University’s Business and Economic Research Center.
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Charting a Course to Tennessee’s Future, a new staff report released by the Tennessee Advisory Commission on Intergovernmental Relations (TACIR), presents an overview of the Volunteer State’s strengths and challenges based on the experience and views of more than 40 Tennesseans representing state and local government, business, the not-for-profit sector, and academia. The report builds on the foundation laid by the Forum on Tennessee’s Future, a group of leaders convened by TACIR staff in 2008 to discuss our state’s greatest challenges. Like the members of the Forum, most of the people interviewed for this report believe Tennessee needs to improve its ability to prepare for the future. The challenges they identified are discussed in four broad categories: people, infrastructure, natural resources, and governance. The report encourages Tennessee leaders to draw on the expertise of various groups to develop a statewide vision and long-term goals in order to shape public policy around effective solutions and wise use of resources. (Full Report)
TACIR has released a Commission report on eminent domain legislation referred for study during the 107th General Assembly. The report makes several recommendations including that property owners should not have the power to force local governments into binding arbitration to resolve disputes over the price to be paid for condemned property, and that mediation should always be considered before arbitration. It also recommends removing language from the law that allows local governing bodies to delegate the authority to approve redevelopment plans to housing authorities, ensuring that such agencies could not approve the plans themselves and use them as a basis for condemnation without the oversight of the local governing body. The report notes that many stakeholders interviewed supported the idea of giving property owners a right of first refusal in all condemnation cases. It recommends adoption of the Tennessee Department of Transportation’s right of first refusal model, including limiting the right of first refusal to ten years from the date of condemnation, limiting it to the former property owner only, and setting the price based on appraisals of fair market value. The report also suggests that efforts should be made to better inform property owners about their eminent domain rights. (Full Report)
TACIR has partnered with the Middle Tennessee State University Business and Economic Research Center to provide an Internet site to track the state economy during the recovery from the recession that began in December 2007. The site will permit the reader to follow labor force status including employment and unemployment numbers; housing data including a housing price index and construction activity; and sales tax collections. These data are available for the state and for 10 Metropolitan Statistical Areas across the state. Presented graphically, the data may also be downloaded for use at the reader’s convenience. (More)
Serve as a forum for the discussion and resolution of intergovernmental problems; provide high quality research support to state and local government officials in order to improve the overall quality of government in Tennessee; and to improve the effectiveness of the intergovernmental system in order to better serve the citizens of Tennessee.