Government & Legal Update

Government Update: With Delta Variant, COVID-19 has Political Staying Power

As the Tennessee General Assembly wrapped up its legislative session for the year in early May, COVID-19 cases in Tennessee were around their lowest levels since the onset of the pandemic. With vaccines widely available, and much of the state’s most vulnerable citizens already fully vaccinated, it seemed the worst of the coronavirus was surely behind us. While hopefully that’s still the case, a recent spike in infections across the country and in Tennessee due to the “Delta” variant has kept COVID-19 in the headlines and on the desks of state policymakers. Despite these recent developments, Tennessee’s economic recovery appears to remain in full swing, seemingly held back by vaccine skepticism or a shortage of workers, depending who you ask.

In July, a majority of Tennessee Senate Republicans signed onto a public letter urging Tennesseans to get vaccinated. Among the signees included Lt. Gov. Randy McNally (R-Oak Ridge), Majority Leader Jack Johnson (R-Franklin), and the GOP Caucus Chairman Ken Yager (R-Kingston). A short excerpt:

“Unfortunately, efforts to get more people vaccinated have been hampered by politicization of COVID-19. This should not be political. Tennesseans need factual information to make educated decisions regarding their health. … Every life lost to this virus is tragic. The COVID-19 vaccines save lives. Again, we strongly urge all Tennesseans to study the facts, talk to your doctor and get vaccinated.”

Unemployment Data and Changes to Tennessee’s Unemployment Benefits

In June, Tennessee’s unemployment rate had receded almost back to pre-pandemic levels, a full point lower than the national average. Tennessee’s 4.9% unemployment rate was down from a high of 15% last spring. Jobs in the leisure and hospitality sectors and low wage jobs, hit the hardest during the pandemic, appeared to be recovering. But a new problem emerged in media reports across the state: employers have had trouble finding help.

A May 23rd U.S. News & World Report headline proclaimed, “A Stifling Worker Shortage Threatens Nashville’s Recovery.” The article cited a somewhat surprising statistic: there were 166,706 unemployed Tennesseans and more than 250,000 advertised vacant jobs in April according to a state report.

The data, both empirical and anecdotal, would seem to support Governor Bill Lee’s decision that, beginning July 3, Tennessee would forego additional unemployment insurance payments to workers financed by the federal government. Indeed, the Governor cited the same statistic when pressed on the decision.

“We have a quarter million jobs in this state that are unfilled, and we do have employers all across the state who desperately need workers,” said Lee. “We know that people want to work, and we want to make that pathway for them. We’re working on a number of initiatives through our Department of Labor and Workforce, but we analyze the data and we think this is the right move for the state.”

Business groups largely praised the policy change in Tennessee and other “red” states. With the 2022 gubernatorial election around the corner, it also may have been the right political move. A May 2021 poll by Vanderbilt University indicated that most Tennesseans support removing incentives that might discourage people from reentering the workforce. Legislation to reduce the duration a person can be eligible to draw unemployment benefits from 26 weeks to somewhere between 12 and 20 weeks (indexed to the unemployment rate) was supported by 68 percent of Republicans and 59 percent of Independents participating in the poll. The bill, codified as Pub. Ch. 560, was a major priority for House Speaker Cameron Sexton (R-Crossville) last session.

That’s not to say everyone is happy with the changes made to the state’s unemployment benefits by the GOP-controlled legislature and the governor. Democrats in Nashville and Washington have uniformly panned the decision to forego millions in federal aid as misguided. A paper by analysts at JPMorgan Chase & Co. Institute suggested that, although almost half (48 percent) of workers make as much or more money on unemployment benefits than at their previous job with the $300 federal supplement, such funds “were not holding back the labor market recovery in a very significant way.”

In late July, seven individuals sued the Governor in federal court seeking a reinstatement of the $300 federal supplement. The program, authorized by Congress under President Biden’s American Rescue Plan, are scheduled to end on September 6.

What Pandemic? Revenue Collections Outpace Projections

Tax revenue collections by the Tennessee Department of Revenue have significantly exceeded budgeted projections through 11 months of the fiscal year. (June is the eleventh month of the fiscal year 2020-21.) Collections for the months of April, May, and June alone were $1.4 billion more than projected. Below are a few fiscal stats courtesy of the Tennessee

Department of Finance and Administration in its press release announcing June collections:

• General fund revenues were more than the budgeted estimates in the amount of $357.1 million and the four other funds that share in state tax revenues were $15.2 million more than the estimates. • Sales tax revenues were $173.2 million more than the estimate for June and were 22.64 percent more than June 2020. For eleven months, revenues are $1,656.9 million higher than estimated. The year-to-date growth rate is 14.86 percent. Remote sales and marketplace facilitator laws contributed $50.2 million to sales tax receipts for the month and for the year, online sales tax revenues represent 35.27 percent of all sales tax growth to the state. • Franchise and excise tax revenues combined were $193.4 million greater than the budgeted estimate in June, and the growth rate compared to June 2020 was 45.06 percent. For eleven months, revenues are $1,044.4 million more than the estimate and the year-to-date growth rate is 49.01 percent. • Gasoline and motor fuel revenues for June increased by 18.38 percent compared to June 2020, and they were $5 million more than the budgeted estimate of $104.8 million. For eleven months, revenues are less than estimates by $6.1 million. • Motor vehicle registration revenues were $0.9 million more than the June estimate, and on a year-to-date basis, revenues are $16.4 million more than the estimate.

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As mentioned above, Governor Lee will be on the ballot next year, along with all nine U.S. House seats, all 99 Tennessee House seats, and 17 of 33 Tennessee Senate seats (oddnumbered districts). The legislature continues to await necessary data from the 2020 U.S. Census in order to begin the once-a-decade redistricting process. Census data necessary for apportionment decisions have been delayed because of COVID-19. Tennessee is among 22 states that are explicitly required to utilize decennial census data for legislative and/or congressional redistricting.

We will take a more detailed look at redistricting process and upcoming races in future issues, but let me take this opportunity to thank you for your continued and future support of InsurPACTN. Your generous support is critical to our efforts in Nashville to protect independent agents and the communities they serve. Thank you! About the Author

Trey Moore is the Government & Legal Consultant for Insurors. Moore operates Trey Moore Consulting in Nashville and was formerly senior public policy counsel for Bass, Berry & Sims. Prior to that role, he had nine years of experience in government relations with Acadia Healthcare, BlueCross BlueShield of Tennessee and others He is a native of Gallatin and a graduate of Sewanee and Nashville School of Law. u

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Association Update

Evans and Gresham Named to Big "I" National Committees

Insurors National Director Cindi Gresham, CIC, CISR and member Mel Evans, CIC have been appointed to the Big I Finance Committee and Big I Diversity Council respectively.

Gresham is the president of Boyle Insurance Agency in Memphis and is an Insurors Past President and former Insuror of the Year award winner. She has previously served on multiple Big I National Committees.

Evans is the president of InsureFitRM in Knoxville. He is entering his third term on the Diversity Committee and has previously served on Insurors state committees as well.

Maddox Insurance Adds Parish

Huntingdon-based Maddox Insurance has announced that Tim Parish has joined the agency as a producer. He has a Bachelor's degree in agribusiness and a Master of Arts degree from Freed-Hardeman University, and will graduate from John A. Gupton College in December. He is licensed in property, casualty, life, and health.

Reliance Partners Adds Paluzzi as CTO

Chattanooga-based commercial transportation and logistics insurance agency Reliance Partners has announced that Mario Paluzzi has joined the agency as Chief Technology Officer. Paluzzi will oversee the development of Reliance Partners' proprietary technology initiatives and spearhead the agency’s innovation strategy to drive solutions in the trucking and freight insurance industry.

Prior to joining Reliance Partners, Paluzzi established, led, and deployed industry-leading technology teams and transformative innovations across high-growth startup environments as well as multi-billion dollar enterprises. Paluzzi spent 10 years at Coyote Logistics overseeing technology, strategy and delivery. In October 2020, he joined Logistics Dynamics as Chief Information Officer.

Insurors Adds Durham for Education

Insurors is excited to announce that Teresa Durham, CPCU, AIC, AU, CIC has joined the Association staff as the Insurance and Education Specialist. She will be working to assist members with various insurance industry questions as well as coordinating CE efforts.

Durham is a Nashville native where she earned her Bachelor's degree from Trevecca Nazarene University in Management and Human Relations. She most recently worked as the Commercial Lines Account Manager and Licensing Coordinator for James A. Rothberg & Associates in Nashville. She has 39 years of experience in the insurance industry serving in various roles as an underwriter and account manager.

She may be reached at tdurham@insurors.org or 615.515.2607.

Cutchin Named as an Agent of the Year

Brett Cutchin of Lipscomb & Pitts - a Higginbotham Company - in Memphis was recently named as a 2020 Agent of the Year by Insurance Journal magazine. With real estate accounts of all types across the country, real estate is the largest segment in Cutchin’s book of business. Habitational risks represent about half of his real estate book. He also handles construction related accounts. A third area of his concentration is tough to place accounts.

Cutchin graduated from Florida State University with a degree in risk management and insurance. While at FSU, he was president of the insurance society and also won the George Nordhaus scholarship. He began working at Lipscomb & Pitts in January 1994. Cutchin is currently the agency’s commercial lines president, as well as its largest producer.

Insurors Members Named in Top 100 Agencies

The 2021 Insurance Journal list of Top 100 agencies included multiple Insurors members. Ranked by 2020 total P&C revenue, the members listed included: AssuredPartners, BroadStreet Partners, Commercial Insurance Associates, Fisher Brown Bottrell, Higginbotham, HUB, Patriot Growth Insurance Services, Scott Insurance, and Sunstar Insurance Group.

Congratulations to all these high performing agencies on their recognition! u