The Tennessee economy is largely driven by agriculture, manufacturing, and tourism. This translates to a large farming industry, automotive and food processing plants and of course, whiskey. Tourist hotspots like Nashville, Memphis, and Gatlinburg contribute greatly as well. Most of state funding (80%) is from sales tax and the excise franchise tax.
The good news: Tennessee is required by the State Constitution to pass a balanced budget each year. In doing so, Tennessee's fiscal health rates among the best in the nation with Moody's issuing Tennessee a top Aaa rating concerning our general obligation debt. Tennessee's low cost of doing business and a pro-business regulatory climate, coupled with a no state income tax provision (also in the Constitution), makes it an ideal location for business to move here.
The not so good news: Tennessee is heavily subsidized by the federal government with roughly 40% of Tennessee's budget coming from Washington DC, ranking Tennessee 3 rd in the nation receiving federal funds. These funds for various reasons could go away at any time which would leave a gaping hole in the state budget. It is imperative we address this issue now creating a plan to identify backup resources and funding to maintain quality of life for Tennesseans.
Further, Tennessee relies heavily on a very high sales tax which is not only disproportionate to poor people but can fluctuate in times of a recession making it difficult to budget for programs such as Health Care, Education, Social Programs and Corrections. With no steady stream of funding, such as a state income tax, which is not allowed under the Tennessee Constitution, public policy initiatives for programs such as the ones listed above consistently rank in the lower tier of states.
Below are issues I believe can strengthen our economy and workforce as we move forward keeping Tennessee's economy strong.
Living Wage
The federal minimum wage is $7.25 an hour and has not been raised since 2009. This amount is no longer a living wage in the United States and the minimum wage has not caught up with the cost of living since the late 1960's. Tennessee is one of only five states that has not adopted a state minimum wage, keeping with the federal standard of $7.25 an hour. Tennessee needs a living wage for our citizens working in hourly wage jobs.
A living wage is an investment. An investment in an employer's business, an investment in the employee, an investment in the community and an investment in the state's fiscal health. For the employer it increases productivity, morale and improves employee loyalty. For the employee it means income to pay for basic living expenses and reduces barriers to affordable housing and social inclusion. For the community, a living wage leads to increased consumer buying power, growing the local economy and promoting the values of the business. For the state it keeps individuals off government support and poverty programs.
Equal Pay
In 2022, a woman earns .81 cents to every dollar a man earns. Women are being paid less than men due to no attributable reason other than gender. In other words, the median salary for men is roughly 19 percent higher than the median salary for women. According to payscale.com, calculating presumptive raises given over a 40-year career, they find that women stand to lose $900,000 on average over a lifetime.
Moreover, the gender pay gap is wider for women of color, women in executive level roles, and women in certain occupations and industries. There are also barriers to advancement and representation of women in leadership in the workplace.
While it is true the difference between the earnings of women and men has shrunk, it has only been an incremental amount each year. I am proud to have co-sponsored legislation to reduce this gap but there is still much work to be done until this gap is closed and I will continue to promote and sponsor legislation that supports equal pay for women.
Affordable, Quality Child Care
How are working parents handling their childcare needs? With nearly 300,000 children under age six in Tennessee a vast majority of toddlers and preschoolers are enrolled in paid childcare. In fact, for every $1 the state spends on affordable, quality childcare we would get $16 back having a parent fully engaged in the workforce.
The government can address affordable, quality childcare in a few ways. Tennessee has the Smart Steps Program providing childcare financial assistance to low-income families and families who are working on post-secondary education. We also have a childcare certificate program for teen parents enrolled in high school. We need to maximize state and federal dollars that are available for low-income working families. The state can adjust subsidy reimbursement rates covering the cost of quality childcare. I plan to introduce a resolution to require the Department of Human Services to study the financial rates needed to ensure we are maximizing what is available to us and report back to the General Assembly.
In addition, childcare workers deserve to earn a living wage, as these are people dedicated to the care of our children while parents work to support their families. There is no greater trust a parent can be given to a person than the trust of their child's welfare. Tennessee needs high quality; affordable childcare and we need it now. I plan to introduce a bill to require a living wage for childcare workers.
Predatory Lending
There are more payday loan establishments on Lebanon Pike in our District than there are Waffle Houses, McDonalds and Starbucks COMBINED.
The payday loan industry is nothing short of legalized loan sharking. A short-term payday loan may charge more than 390% interest along with fees, locking consumers into long-term expensive debt. I have received and returned campaign donations from organizations representing payday loan companies. It is my view that this industry preys on the poor and those in emergent, unexpected need, drawing them into a cycle of debt nearly impossible to overcome.
I have sponsored legislation, and will continue to fight this industry, to curb the practice that all too often traps people in cycles of debt and drains local economies.
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