Economic challenges facing Tennessee were the center of discussion last week  when  Tennessee State Treasurer David H. Lillard, Jr. spoke to a group of DeKalb County government officials and Leadership DeKalb students last Tuesday night in a meeting in the basement of the courthouse.
Among the topics discussed were the current state of the economy, concerns about the state retirement plan, how the pending federal healthcare program could affect the state, and the cost of higher education.
When an attendee inquired about the stability of Tennessee Consolidated Retirement System, the state’s pension plan, Lillard told the assembly that Tennessee’s plan is “doing much better” than a lot of other states.
The retirement fund now contains approximately $33.5 billion, with 40 percent of that amount in fixed income accounts such as bonds and similar securities, and is funded at about 91 percent.
“That puts us at about the 10th of 11th highest fund in the United States,” Lillard said.
“Unlike many other treasurers, we don’t send our money out to be managed. We manage the money ourselves on a conservative basis,” he went on.
“We sustained losses in the plan, but so far we’ve been able to stay ahead of the trend.”
Upcoming national health care reform laws were addressed as well, and Lillard said that if the new federal law is found to be constitutional, it could be detrimental to Tennessee’s finances.
"If it does come out as being constitutional, the whole program, then there are a couple of big things we'll need to look at in Tennessee," Lillard shared.
"One is whether Tennessee will operate an insurance exchange,” he continued.
“In that bill, one of the concepts is either each state or the federal government, if a state refuses do to it, is to operate an insurance exchange for citizens in that state.
“The concept is that private insurers will offer their products in this exchange making it easy to compare policies, compare coverage, compare strength of companies, etc., and buy that,” he explained.
“The other concept is just the cost that the state will have. Under the federal health care legislation, the federal government does not pay for all the costs of the insurance.
“I wish they would get in the deal to pay for 100 percent of everything they send down the pike as a state or local government mandate,” Lillard admitted.
“You can look at the Medicaid program. The TennCare program. That's a federal/state program and it’s largely controlled by federal regulations.
“The federal government pays two thirds of it and Tennessee pays roughly a third of it. The current estimate that we have in state government is that it will increase state expenditures about $1.2 billion between the years 2014-2019.
“That's a little more than $200 million a year. So that's another one of those back of the envelope budget challenges. If the supreme court does uphold the legislation, Tennessee state government is going to have to figure out a way to deal with that cost," Lillard continued.
"Governor Haslam and his people have been going around the state and having meetings with medical providers and stakeholders in Tennessee about whether Tennessee should run an exchange or whether we should let the federal government run it.
“There is some cost in running an exchange. It's beneficial perhaps but it does have some requirements to it. My understanding is the feedback from this is that most people who are stakeholders, including citizens, providers, and insurance companies, would prefer the state of Tennessee run an exchange in Tennessee rather than have the federal government run it. Again, that decision has not been made at this point," Lillard concluded.
The issue of funding for higher education was also discussed.
The states college system appears to be on the brink of losing many middle-class student over financial concerns.
Universities, community colleges and technical schools have found that for the first time in Tennessee higher education history, appropriations make up less than 50 percent of their overall budget.
“Tuition and fees are going up,” Lillard said.
“It ranges depending on the college, but it’s around 10-11 percent a year, and it’s compounding annually.
“We’re reaching the point where, for a child born today in Tennessee, he or she, 18 years from now, when they want to enter college at a state university in Tennessee, will not be able to afford it…if they’re from a middle-income family, unless they have saved substantial money or they’re lucky enough to get a scholarship,” Lillard explained.
Lillard was elected to the position of Treasurer by the Tennessee General Assembly on Jan. 15, 2009.
Lillard has had experience in corporate finance, municipal finance, governmental budgeting and related fields.
Lillard is a graduate tax attorney who received a Master of Laws in Taxation from the University of Florida in 1983. He also holds a Bachelor of Arts and a Juris Doctor degree in law from the University of Memphis.
He is listed in several editions of The Best Lawyers in America, including the 2009 edition, and holds an "AV" rating from Martindale Hubbell, the highest designation for legal ability and ethics.
He served as chairman of the Shelby County Board of Commissioners in 2007-2008 and as a Shelby County commissioner from 2002 to 2009.
He also served in 2006-2007 as president of the Tennessee County Commissioners Association.
From 1993 to 2002, he was a Shelby County Election Commissioner.
He is a former Speaker of the House and Governor of the Tennessee Intercollegiate State Legislature (TISL) and has served as an officer and member of the board of directors for the Tennessee Intercollegiate State Legislature Foundation.
The Treasury Department is one of three legislative agencies within State government.
Its major functions include receiving and disbursing public funds, managing all State investments, including the pension fund, administering three major employee benefit programs, including the Tennessee Consolidated Retirement System, the Deferred Compensation Program, and the Flexible Benefits Plan.
   The treasury also operates the Unclaimed Property, College Savings (Section 529 Plans), and Small and Minority-Owned Business programs. and oversees the risk management program, handling and adjudicating all claims made against the state.