(female announcer)
This is a production
of WKNO - Memphis.

Production funding for "Behind
the Headlines" is made possible

in part by..

Senator Mark Norris on the
upcoming legislative session

tonight on
"Behind the Headlines."

[theme music]
♪♪♪

I'm Eric Barnes, publisher of
The Memphis Daily News.

Thanks for joining us.

I am joined tonight
by just one guest,

Mark Norris, majority
leader state senator.

Thank you for coming back.

Eric, it's great to be here.

I think so.

So we have the whole
session, just the two of us.

Talk about -- or the whole show.

Talk about the upcoming session.

Maybe look back at some things.

But looking in to
this upcoming session,

you'll be majority leader again.

There are super majorities of
Republicans in the senate and

the house, the
governor's office.

What are your priorities?

What are the Republican
priorities this coming session?

Thank you.

The main priority is to
pass a balanced budget.

So many of our viewers don't
appreciate the fact that unlike

Washington, state government
balances our budget each year.

And as majority leader, I carry
the budget and intend to do so

again as required.

But it'll be a special challenge
this year as we'll discuss

revenues as budgeted are off.

And some of our
expenses and essential areas,

education, healthcare are up.

And so, there'll be less of the
tax payers funds to put to good

use.

And we're gonna have to be very
prudent about how we balance the

budget.

We're about a third of the
way in to the fiscal year,

the state's fiscal year.

I think I read that.

We're off.

That was unexpected.

People felt like the
economy was picking up.

And most of the state
revenue comes from sales taxes,

correct?

I mean that's the vast majority.

One of the unanticipated
downturns was in the franchise

and excise tax.

And we are currently attributing
that to the fact that a number

of companies paid estimated
taxes where they overpaid.

And so there are
rebates underway.

And that probably has more to do
with it than sales tax at this

point.

But expenses will
be up in Heathcare.

Our Tenn Care budget is growing.

And we're gonna have to
find ways to pay for that.

The national argument aside.

Yeah, I was gonna
say that surprised me.

And I follow this
stuff fairly closely.

But Tennessee has not agreed to
do the Medicaid expansion that's

a part of Obama Care.

You've mentioned it.

Let's kind of start there.

What is your take on that?

I mean should the state take
that federal money and expand

Medicare?

Right now, it's quote free money
the federal government is going

to give to the various
states who've opted in,

which I think is
about half the states,

the full amount.

It then..

There's a sliding
scale that, what?

-- over the next five, ten
years it goes down to where the

federal government's
gonna fund maybe 90%.

Right.

Actually, a shorter
fuse -- three years.

Yeah, the answer is no.

The state should not.

And Governor Haslam just wrote a
letter recently back saying you

know, our conversations
aren't going anywhere.

And so it's sort of
off the table for now.

That can't be confused though
with the fact that meanwhile,

back at the ranch,
we have Tenn Care.

And we have Tennesseans who need
to be attended to one way or

another.

So aside fom Obama Care
and the affordable care act,

we find that as a result of
the implimentation of that,

we now have what we
thought would be about 470,00

new enrollees -- those who
are eligible but previosuly

unenrolled.

Then we thought
it might be 50,000.

As we speak here
tonight, it's more like 52,000.

And part of that's..

I know nationally, part of
that's because people go in to

the exchanges now
that they're kind of,

sort of working or at
least working better.

And they go through and they
find out or they meet with a

counselor or whatever they do.

And they find out that they've
been eligible for Medicaid for

quite sometime.

And I guess this is happening
in Tennessee too even though the

expansion wasn't put in place.

Correct.

And so everything about
the dysfunction in DC aside,

we have a situation
we have to deal with.

And so there are additional
costs associated with that,

several hundred million dollars.

And when you
couple that with -- oh,

as we speak maybe $123 million
less than a revenue budgeted,

you knwo teh combiantion there
is a pretty significant factor.

We're just gonna
have to deal with it.

And again, I'm assuming you're
here but you're colleagues..

No one's really gonna look
at increased taxes I assume.

This is just not a legislator
that's going to do that.

Oh, no.

And it's not
necessary that we do so.

The governors asked all the
departments to report what their

projections would be with
additional five percent in cuts.

He's managed this very well.

And we've had good, solid
budgets since he took office in

the last three years.

On the positive side, we'll have
some additional revenue starting

in January from the Amazon
settlement where they're going

to begin paying sales taxes.

And we have a fairly robust
employment situation since

Governor Haslam
took office in 2011.

Somewhere in the neighborhood of
140,000 new private sector jobs.

Those generate revenue.

So we're gonna do fine.

But we're not a wash
in tax payer money.

Talking about taxpayer
money, talking about government

spending.

A little bit more of a local
issues although there's a state

angle which is pensions.

Last spring, the state
comptroller -- I've been

corrected by many viewers.

Controller even though
it's spelled comptroller.

The state comptroller wrote a
letter to the city saying look,

your pension..

Your accounts are
out of balance.

We're concerned and we're
particularly concerned about

this unfunded
liability on the pension side.

To some degree, I mean some
people have said an emphasis no

where near the
shape that Detroit is.

But at the end of the day, the
state kind of back stops the

municipalities,
Memphis included.

So I assume that was sort of
the opening shot to say look,

you guys have go to
get things together.

Just this week in the last week,
Mayor Wharton has come forward

with a plan to begin to fund
that unfunded liability over a

five year period starting
at 20 million next year,

at 40 million, getting up to a
really big number -- $80 million

with in the city bidget.

It's a big number.

It is.

What are your thoughts on
Wharton's plans and the state's

involvement in the
local pension issue.

Last March as a member of the
pensions and insurance committee

that I serve on, I asked for
the committee and the general

assembly to take stock of where
all local governments across the

state may be -- Not just Memphis
but other municipalities as

well.

The department of treasury,
Treasurer David Lillard and his

staff have worked
on that ever since.

So for many months
looking at that.

And we've met with Mayor Wharton
to talk about the particular

situation as it
obtains to Memphis.

And he's taking a giant leap
forward in what he presents as

we enter in to the new year.

There will be legislation
requiring maintenance of effort

by municipalities and
other local governments.

I'll sponsor that legislation
at the request of the treasurer.

And what we need to do is
instill discipline in all these

local governments.

It's not just about Memphis
but Memphis being one of our big

cities with a big problem has
got to take some big steps.

Part of this switch that has
been pushed and that is the

Wharton plan is to take the
honor the obligation to retired

and I guess vested employees.

But for new employees in to
the city government and newer

employees -- people, I
think it's less than ten years.

They move to more of what the
private sector has moved toward

which is a 401k where
it's a defined contribution.

The city is going to put in
X-hundred or thousand dollars a

year, what ever it is, and it's
gonna fluctutate with the market

and that's what's gonna be there
at the end of the day versus the

defined benefit where there's a
guarantee of what they're gonna

get.

That's right.

You like that idea?

It's the only thing to do.

That's the
direction you have to move.

The question is how
far you go and how fast.

The state of Tennessee reformed
it's pension plan in 2013.

We've already taken those steps.

It's a hybrid.

It's a combination between
defined benefit and defined

contribution.

And that's for, in
terms of state workers,

that's for highway patrol and
people out you see working on

the highways, so
on and so forth.

Legislators and others.

Okay.

Right.

And what was the reaction?

Stoic but resolved that
it needed to be done.

And you didn't hear a
great cry about it.

There was a lot of effort
that went in to it in terms of

planning and working with
different constituant groups.

Some in the private sector
here locally think that all

government should go further.

No hybrid plan about it.

Just go all the way to
defined contribution.

Including those retired
employees and the vested

employees and so on.

And for a variety of reasons,
that's probably not practical.

But we think and the treasury
department thinks that moving in

that direction if not going all
the way is sufficient to right

the ship of state.

And we'll see.

Yeah.

And for those who are
concerned about the state,

you know there's always
this tension between the state

involvement and local issues,
federal involvement in state

issues.

You all don't like to be
mandated by the federal

government to do X, Y and Z when
you don't have the funding for

it or don't have the control.

Are you comfortable that
the state's involvement is

appropriate.

Yes and just as I was
in the education space.

At the end of the day, it's
the state's responsibility.

You can talk about
local funding all you want.

But to the extent that most of
the funding comes through the

state and from the taxpayers
and citizens of the state,

it's ultimately
our responsibility.

It's our duty to do it
working with local governments.

But we need to make sure
that the requisite degree of

discipline is at work and
that the local governments are

salting away for
that retirement day,

the funds that are needed.

It's, you know, whatever
metaphor you want to use.

Robbing Peter to pay Paul and
that sort of thing just isn't

gonna cut it.

It's an interesting
thing nationally,

too, because you know we're
very focused here in Memphis.

You know there are
the people you get,

you know, Memphis is the next
detroit or get down on Memphis.

The fact is we're so far
away form a Detroit situation.

Wall Street Journal -- I
don't know if you've..

We haven't talked about this
but they've done a really great

series on states and
localities in trouble.

I mean Memphis isn't even close
to the trouble that some of

these places in California
and Illinois and so on.

I guess part of that for you is
that's all well and good but we

want to stay there.

We want to stay
away from the bottom.

Keep them away from
that, absolutely.

So it's sometimes a
sort of tough love.

But we've met here
locally, for example,

with Mayor Wharton
and Brian Collins.

It's nothing personal.

You know it's just business.

And you know when Wharton was on
the show earlier this year right

when they letter came from
the comptroller and so on.

And I asked him, you know, are
you glad the state stepped in?

And he said yeah because we
needed that kick I think.

And other city council members
either on the record or off the

record have said on the show
and said elsewhere -- yeah,

we needed this.

Because it was just going to be
too hard for us to do it alone.

This was the first warning.

And then like you're saying,
some legislation and the kind of

this is inevitable that this
is going to have to happen.

When you look at..

We're talking about
cities and finances.

And you mentioned the schools
and we'll come to that a little

bit later.

But your take on some of
the projects and some of the

spending at the local
level right now -- county,

city-wise.

The one that's most
immediate is Autozone.

And I know that's not
really a state issue but you're,

you know.

You live in the community.

You're politically connected.

The baseball park --
what's your take on that deal?

And is it a deal that
should be done by the city?

It's sort of to
your earlier point.

I mean there are places for
the state to assert the state's

position and places for
the state to stay out of it.

This is one where
the city council,

city of Memphis have to
decide what they can afford.

With the requirements of the
pension reality and other post

employment benefits, with
what Mayor Wharton is saying,

he realizes he needs to put
away to get up to that actuarily

required amount.

You know it's going to be for
them to decide how the debt

service works.

I don't know enough about the
particular stadium deal to say.

I understand that they're saying
that it basically pays for

itself when you account for the
rental that's paid and so forth.

There's no question on the
positive side of the ledger.

You need things to
generate revenue, too.

I mean you can only cut so far.

So just as we have been working
on work force development

issues, bringing in more jobs
and maybe new employers are

growing, existing employers --
that's all designed to bring

cash in on the
positive side of the ledger.

So there's a lot in the mix.

And where they
separate these projects out,

I don't know.

But I know we're gonna learn a
lot more about it between now

and January.

You don't want to say it if
you want the deal -- yes or no.

No.
[laughter]

Sorry!

That's fine.

So we talk about incentives.

Pilots, a thing we talk
about on the show sometimes.

Economic development
generally and the various local

incentives, state incentives.

When Haslam came in, he got away
from some of the programs that

had existed more to these
sort of cash incentives.

Shelby County and Memphis still
do a lot of payment in leiu of

taxes, which can be
very controversial.

What is your take on
that, the best approach?

Because I think you've said.

I know others state folks have
said that economic development

on the big scale of recruitment
is a state local partnership.

It has to be.

Those incentives and
the contacts and so on.

Do you feel like the use of
pilots in the Memphis - Shelby

County area has been appropriate
and is going in the right

direction?

I think it's going in
the right direction.

It has not always been
appropriate back to the time

when I served on the
county commission.

We had some heartburn over.

For example, the degree to which
funding that otherwise would

have gone to
education was being diverted.

We took some measure to
address that at the time.

I think with EDGE, the new
economic development growth

engine, and other programs,
they're moving in the right

direction.

But I think you always have to
be sensitive to how much should

government be involved
in private enterprise.

You're in
competition with other states.

And I know this as
chairman of the council of state

governments, now the
national organization.

There's a balance to be struck.

But what we're trying to do in
this administration is to get

away from tax credits
and that sort of thing.

They get lost in the shuffle.

They're hard to keep up with.

You're waiving taxes when other
people have to pay for them and

deal more with a ready workforce
and other incentives that are

concrete and sort of
organic to the area to attract.

We've got a lot of natural
resources here and amenities

that make Tennessee the place
to be in so many ways without

giving away the store.

So you have to be prudent.

The department of economic and
community development has their

own metrics and their own matrix
and everything to make sure that

we get the appropriate return
on the taxpayers investment.

But you can't
give away the store.

Yeah, isn't there
also the reality that,

you know, people will
compare Memphis and Nashville.

Nashville doesn't
rely on pilots as much.

And we've had
people on the show.

I've talked to people with the
paper who say -- Well it's all

well and good to compare
Memphis and Nashville.

But Memphis is right
up against Mississippi.

And Mississippi is
open for business.

And they will give you a credit,
cash and flowers to get your

business to come
across the border.

And that unique
situation where you can..

if you're gonna locate a
business in Olive Branch,

you can still tkae advantage
of the Memphis airport,

the Memphis Grizzlies, the
amenties of a big city while not

having to be in Tennessee.

Nashville doesn't
really face that so much.

Other cities don't
necessarily face.

And there are cities that do.

But that's where I think
people sort of say the

Memphis-Nashville comparison
on these pilots breaks down.

There's some unique issues.

Arkansas is right across
the river -- same thing.

You can base something in
Marion and take advantage of,

without paying any
taxes, the Memphis big city.

Yeah and that's
just a challenge.

It's a daily challenge.

There's a great
team at work now.

You know a lot of people have
to understand why the Haslam

administration sort of
reconfigured the way teh

department of economic and
community development was set

up.

They went to these base camps.

People might not
even remember it.

But nine camps across the state.

That's one of the reasons.

Because the folks
who are here, get it.

They know.

They know what we're dealing
with here which maybe different

from what they deal with in
Nashville or Johnson City or

some other place.

So it's more customized to
the realities we have here.

And it's working.

I mean we've had some
great developments.

Like I said, about 140,000
new private sector jobs.

The expansion we're gonna have.

And of course that's in
Covington and Tipton County.

But regionally speaking,
it'll be the largest ice cream

manufacturing
facility in the world.

They're consolidating
all their North American, yeah.

And so there are a
lot of good things.

Did you work that
in to the deal?

Later off line.

We talk about work force though.

You know, two big projects
-- Electrolux and Mitsubishi

They're ramping up.

But you know already, I
think the director of HR from,

I believe it was Electrolux and
it might have been Mitsubishi

recently said they're having
trouble hiring because these are

not factory jobs in
the old sense of,

you know, picking up a
widget and dropping a widget.

I mean they're
pretty high tech jobs, actually.

And pretty well paid
jobs in terms of..

Does that concern you?

And is that something where
the state through community

colleges, through whatever, can
work more closely to get skilled

workers in to
these new facilities.

And we are.

If your viewers haven't heard
about Drive to 55 and LEAP,

the Labor and Education
Allignment Program that I

authored and passed
this year or in 2013.

Both of those are designed to
help Tennesseans simultaneously

work, earn and learn so that
they get a certificate or degree

while actually engaged and on
the job trainined whether it's

an apprenticeship on the job
they already have alligning the

education sector to work with
local employers and say -- Well

if your employees
are doing this,

this and this on the job, did
you know that that would qualify

them for a certificate in
advanced manufacturing or this

or that.

We're working
closely with Unilever,

with Electrolux, with the
Bodine plant in Jackson.

I don't think a lot of
folks realize that next year,

all engine blocks made for
Toyota motor vehicles in North

America will be made
in Jackson, Tennessee.

Yeah, I haven't
seen any of that.

And I follow
stuff pretty quickly.

And we're still
three years running.

Yeah.

Number one in automotive
manufacturing in the nation

right here in Tennessee.

You talk about programs.

You talk about, you know, the
state working and the schools

working.

You must have some
Republican revenue in the house.

There's some people very
conservative who really

basically view any
government program as bad.

So you're speaking here as
majority leader and saying this

is a good program.

This is where the
state should be involved.

This is where we're
working with business.

But you must have some folks.

I mean all
Republicans are not the same.

All Conservatives
are not the same.

There are
different interpretations.

And when you've got..

You know I've met them up there.

People who just think everything
government does is bad.

Except their job.
[laughter]

And their perdiem.

That's right.

How do you manage that?

Because it's not a
ubiquitous group.

Right.

It's more of an
art than a science.

I try to listen a lot and
respect positions like those

differing opinions.

And I think as a result, we tend
to end up with a better work

product in the final analysis.

But by and large with a
few percentage degrees of

difference, we are all
pulling in the same direction.

I mean we are number one in
the Southeast for job creation,

the state of Tennessee.

We have the lowest per capita
debt of any state in the nation.

Ther's a lot that is hard to
argue with that kind of success.

So you haven't felt
pressure or undo pressure from,

say, a tea party wing?

I mean the media
loves to say that.

Tea Party's pushing Republicans
farther to the right and farther

to the right.

No, I've found
some misperceptions.

I've found some lack of
information and lack of

understanding sometimes from
different sectors where they

don't know, perhaps we haven't
communicated effectively enough

all the good things that are
happening become a success

that's hard to argue with.

We've reduced the size of
government every year in the

last three years.

We've cut taxes -- not only the
taxes on food but the death tax

is being phased out by 2016.

We repealed the gift tax.

Really, you know, hundreds of
millions of dollars in tax cuts.

All the things that the
most conservative among us..

In other words, workers
comp was a big priority.

The reform or
whatever you think about it.

But it was meant to be business
friendly and recruit people in

and reduce the complications.

We've gone 20 minutes.

We've barely talked
about the schools.

It is your signature
legislation for better or worse.

I think you would
say for better.

Are you happy
with, satisfied with?

What is your take on the state
of kind of the deconsolidation

of the schools and the evolution
of where we were and where we

are.

I'm happy that the
municipalities are moving

forward with
neighborhood schools.

It's what their citizens and
parents of these children wanted

all along.

I think that the education
that's closer to the kids and

their families is gonna
be better for education.

It's frustrating, sure, that it
took three years instead of one

or two as originally outlined in
our legislation to accomplish/

But I think we're all gonna come
out better for it in the final

analysis.

And I find very few
people who disagree with that.

There's been a
sort of a, you know,

a metamorphosis if you will
of what used to be the city of

Memphis schools.

We're not ending up with
just the inverse of what we had

before because what was Memphis
City Schools had a lot of

difficulties that have now
been purged if you will.

And you know because
we've talked about it a lot.

And sometimes, you know, viewers
get frustrated when we talk

about the schools so much.

But it's just hundreds
of millions of dollars.

It's sort of the future.

It's an economic
development issue.

It's a recruitment issue.

It's a population shift issue.

So, it's just been, you know, a
tremendous story with all these

different angles.

And I do hear people say --
Well we're just back to where we

were, suburban
schools and city schools.

But it's really not that
because on so many levels,

it is five or six
different suburbam schools.

And Millington is a
very different place than

Collierville.

Different income levels
and different residents and

different economic base.

The city school
system has been..

I think most people who will
calm down and kind of look at it

say it's been
pretty transformed.

You got the state A-S-D running
the worst schools and making

some head way.

The city has put in this new
innovatino zone type district

within a district thats
making some head way.

And all these charter schools..

I mean I've said it.

I guess I'm
editorializing for a second.

Are gonna change the
face for better and worse.

Not all are gonna work out.

But over the next
five, ten years,

it's a whole different deal.

There's a whole lot
more flexibility.

The schools, the delivery system
I think as a result will be,

for lack of a better term, more
nimble in it's ability to meet

the particularized needs to
the students they're teaching.

We learned the hard way
that one size doesn't fit all.

And that's really all we
advocated for the last ten or 15

years is we needed the freedom
to be able to individualize

teaching to get to kids where
they need it most and in the

ways that they
understand and will advance.

And we're now seeing, you know,
Tennessee is in the lead right

now nationwide in
advancement in test scores.

And we're really
making great strides.

But there's a lot
more work to do.

If you talk to Chris Barbeck and
folks at the Achievement School

District, they'll
tell you that right now,

Memphis Tennessee is
known as teacher town.

This is the place that
teachers want to be.

Memphis Teacher Residency
Program is moving it to

Crosstown.

And that's another
thing that, you know,

there was so much going on with
schools and education reform

that, you know, everyone would
say -- Well thats Norris Todd,

the bill that you authored.

But actually, there were
all these parallel issues of

changing, you know, the way
tenure and seniority and the

negotiating.

Again, teachers
unions don't like it.

I won't take a stand on that
but it was a radical change that

sort of got missed, the change
in the way teachers would be

paid, signed, negotiate
contracts had nothing to do with

Norris Todd.

It just happened
at the same time.

That's right.

And we needed to move up.

I mean we're going from
almost at the bottom of the pile

nationwide.

We're now moving on up.

And that's what we need to do.

And we've got a
lot further to go.

We got just a
minute and a half left.

You -- Annexation moritorium.

You chair that commission.

I think you guys just recently
came out and said let's keep

that moritorium in
place for another year.

It's all part of the old public
chapter 1101 and the growth

planning act.

And now whether the general
assembly agrees with that or

whether they forge ahead to
amend the law to allow everybody

to vote on annexation rather
than annexation by ordinance.

I mean there are a lot
of us who favor that.

Favor which?

Favor the right to vote.

I'm one of them.

But as chairman of the
advisory commission,

I also realize that
their collateral issues and

ramifications that go along
with that with the city's been

counting on it's right to expand
in an urban growth area and all

of a sudden, the general
assembly takes it away.

What if any affect does that
have on the city's growth plan,

you know?

Just a couple more.

Just 30 seconds here.

Guns, guns in bars,
guns in restaurants.

Where else are we putting or
not putting guns in the next

session?

Any ideas?

I think we keep them where ever
folks have the right to keep and

bear them.

But are there any new places
that are gonna be allowed?

Somebody will file legislation
about it because they always do.

But the second
amendment will be upheld,

I assure you.

And any..?

Lasy year there was some big
funding I think you were very

proud of for the medical
school here at UT and for the

University of Memphis.

Anything more on that front?

No, we continue to work on
higher ed though and stay tuned.

Have me back and I'll tell you.

We will.

Thanks for joining us.

Thank you for joining us.

Join us again next week.

Goodnight.

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PROVIDED BY WKNO - MEMPHIS.