BusinessTN

In 1983, Gov. Lamar Alexander studied lobbyists’ doings on Capitol Hill and found the state’s business community so riven by self-interest that it wasn’t of much use in addressing its own important needs, much less those of the state. “They were more interested in their tax breaks than in coalescing around the need to improve public education,” Alexander says. “That’s why I founded the Tennessee Business Roundtable.” Comprised of founders and CEOs of the largest companies in Tennessee, the new organization quickly earned a reputation for setting aside the special interests of its individual members in an effort to enhance Tennessee’s business climate as a whole. Such unity ran counter to the historical norm in Tennessee at a time when businesses routinely used the state to damage each other and used lobbyists to protect the status quo. Unlimited in its access on Capitol Hill, TBR became a force, notching such victories as the Better Education Program (BEP) and Workforce Development.

Today, this elite group consists of 150 top corporate luminaries representing more than 100,000 employees and a $5 billion annual payroll. Yet, many lawmakers are hard-pressed to identify a single issue TBR has championed in the past decade. They describe TBR as a dinosaur whose power and influence is waning. One lawmaker, who serves on a handful of business-related committees and subcommittees on the Hill, says TBR “hasn’t come to me in years. We know they still exist. But they are letting someone else carry the ball. They’ve kind of taken a back seat.” Another lawmaker says that these days TBR “doesn’t really stand for anything other than as a gathering place for celebrity CEOs of the state.”

What happened? Many of the lawmakers sampled, both Democrat and Republican, believe that membership turnover has taken a toll on the organization, creating a situation ripe for special interests within the group to seize a more central role. At the same time, TBR’s ever-evolving stances on taxation and education haven’t helped, splitting its ranks and weakening the organization’s ability to influence lawmakers. As a result, what began as a fraternity that insisted on spending restraint and educational reform has through the years been compromised by the status quo culture prevalent on Capitol Hill. So compromised, in fact, that many of its own members have begun to question the future viability of the organization.

Changing of the Guard
Several of TBR’s founding fathers have retired in recent years. In many cases, those entrepreneurs were replaced by executives who came into existing businesses and perhaps didn’t fully appreciate how regulations and taxation can impede efforts to build a business from scratch. More and more, TBR’s membership is comprised of individuals who may have never experienced the sick feeling that arises from knowing payroll is coming due and there isn’t money in the bank to pay it. Absent that rudder, say some disgruntled members, TBR’s current batch of chieftains have increasingly used the organization as a caretaker of their own special interests. TBR’s current president, general contractor Ray Bell of Ray Bell Construction in Brentwood, is better recognized on Capitol Hill as the face of the state’s road builders, a group with its head firmly lodged in the state trough. TBR Vice President Darrell Akins, CEO of AkinsCrisp Public Strategies, a public relations firm with offices in Knoxville, Oak Ridge and Nashville, handled various state government accounts during the Sundquist era, including large portions of a multi-million dollar advertising contract with the Tennessee Department of Economic and Community Development. (Like several other Sundquist-related arrangements, Akins’ contract is now under investigation.)

In marked contrast to the TBR of old, Bell is the sole representative of the organization today with the personal contacts and regular presence at Legislative Plaza to have sway on its behalf. Bell has working relationships with more than 100 of the 133 lawmakers on the Hill and is closely aligned with powerful House Speaker Jimmy Naifeh. Almost by default, Bell’s sway in TBR has waxed as the organization has aged. To his credit, Bell has shepherded TBR authoritatively, even if the direction taken hasn’t always pleased all TBR members. In 2001, when TBR’s executive committee debated whether to remain outspoken in support for Tennessee’s right to work law, a law TBR’s founding fathers would have fought tooth and nail to protect, Bell was a lone forceful voice demanding TBR’s continuing support. Still, as strong as Bell has been as a leader, TBR, an organization founded on an ideal of directed consensus, would be better served if its actions weren’t dominated by a single voice, particularly a voice with personal interests to protect. “We all have our own special interests,” Bell says. “I have to look after myself and my industry. But the top objectives of TBR, which include tax reform and education, are points I’m very serious about. Those are TBR’s main things, and they are also my main things.” These “main things” are precisely the key points of dissension among TBR’s current members.

A House Divided
Two years ago, much to the dismay of a substantial portion of its membership, TBR’s executive committee endorsed a state income tax, a complete turnabout from the organization’s stand against the tax in the late 1980s. Some dissenting TBR members construed Bell’s firm stand in favor of an income tax as an individual attempt to prevent passage of a higher gas tax that would have directly affected the road building industry. Passage of an income tax also likely would have spared road builders some of the deep budget cuts made to the state transportation budget in 2002. Bell denies such motives, citing merely a desire to improve the state’s existing tax system.

The vote of TBR’s executive committee in favor of an income tax was accomplished without proper agenda notification to all TBR members and without a quorum present. At the time, Todd Kaestner, an executive with American Retirement Corp. and a TBR member, told Nashville’s City Paper that the TBR executive committee’s public stance in favor of the tax made it “appear as though the Roundtable is of one mind…That’s my problem.” Kaestner alluded to membership survey results showing 39% opposition to an income tax, adding that TBR as a whole had tabled the issue in recent years due to the lack of a clear consensus. After the vote, at which Kaestner said only half of the board was present, TBR’s executive committee responded to the concerns he and others expressed by initiating a lengthy process to change the organization’s by-laws to accommodate the contested vote. The decision further alienated numerous members.

TBR’s public spat was duly noted on Capitol Hill. It undermined the core of what Cincinnati-based lobbyist consultant Amy Showalter says is vital for advocacy groups of any kind to effectively influence lawmakers—namely to have a “consistent message” supported broadly by a grassroots base of affected constituents. With its veil of organizational unity torn, veteran Tennessee lawmakers stopped viewing TBR as the final authority on issues related to the interests of big business in the state. One TBR member describes the effect of TBR’s income tax divide on lawmakers by saying, “in the aftermath of the income tax debate, legislators are no longer as fearful of the power of TBR.”

A Call for Reform
Neither do lawmakers fear TBR’s voice when it comes to the advocacy of education policy—once TBR’s strongest node of influence. Again, a drift of stance has weakened the lobbying group’s effectiveness. In the 1980s, TBR supported a career ladder in education tying pay with performance. Its leadership publicly laid opposed the policies espoused by the Tennessee Education Association. These days, TBR’s education agenda appears in lock-step with TEA, a migration that has become an additional source of disillusionment for a significant portion of TBR’s current members.

Gordon Fee, retired president of Lockheed Martin Energy Systems in Oak Ridge, leads TBR’s education task force. Fee previously headed Don Sundquist’s “Education Edge” initiative, a workforce training system to which the former governor pledged tens of millions of dollars in state funds. Based on extensive membership polling, Fee says TBR’s current education agenda focuses on addressing teacher quality and pay, funding (in part from private sources) a statewide pre-kindergarten program, increasing funding for higher education and maintaining the school superintendent position as an appointed one. It is an agenda reminiscent of the dogma long promoted by education bureaucrats—that more money is what’s needed to fix the problems that ail public education. “We can always argue that money isn’t everything,” Fee replies, “but in certain cases across the state it is a major concern.”

Conspicuously lacking from TBR’s agenda is a fiery call for reform. Republican lawmakers in particular comment how surprising that fact is given that business groups nationally are often at the vanguard of support for free market challenges to the government-run education system. In Tennessee, that system graduates only 60% of its 8th graders, a full 10% below the national average. No Child Left Behind legislation placed 43% of Tennessee schools on notice. Despite those gruesome facts, Fee willingly owns up to the fact that TBR was “not on the front foray” of legislation creating charter schools in Tennessee in 2002. That legislation, profoundly diluted by the strong arm of TEA, reduced the significance of and raised hurdles for those experimental schools by restricting access exclusively to students from failing public schools. The legislation also bars for-profit entities from operating in Tennessee, and it forces charters to report extensively to local school boards, a critical stab at the very spirit of charters, which, through privatization, aim to bust up the monopoly held by government schools on educational opportunities for lower and middle class families. Despite TBR’s ambivalent approach to charter schools, Fee warns critics not to mistake TBR as an organization that opposes educational reforms. According to Fee, TBR endorses the “Baldridge In Education” initiative, an approach endorsed by “Education Edge” to assist low performing public schools.

A Call to Action
So marked has TBR’s loss of focus become that the group briefly discussed a merger with the Tennessee Chamber of Commerce & Industry, a separate business lobby that counts among its roster many of the companies TBR members pilot. Though TBR’s executive committee eventually passed on the Chamber’s proposed absorption of TBR, sources say the leadership of the organization nearly closed up shop before Bell intervened. “We often agree with the Chamber but not always, and you’ve got to be able to go strictly your own way sometimes,” Bell explains, specifically citing the Chamber’s “waffling” stance on the income tax as one reason to remain autonomous.

Two-year TBR Executive Director Ellen Thornton defends TBR’s modern day prominence, averring that the organization “moves on like it always has.” According to Bell, TBR has “come back a lot in the last couple of years,” although he concedes some people will disagree with that perception. “We still have great inroads,” he says, pointing to TBR’s seat at the table for both the legislatively appointed tax study commission and the TennCare study recently funded by private sources to weigh the future viability of the program. But while the organization clings to parts of its mission through Bell, its membership base appears to be growing increasingly restless. One member who recently jumped ship is Randy Kozak, head of Pioneer Manufacturing in Spring Hill, a maker of loading dock equipment with about 40 employees. Kozak says he left TBR after watching it accomplish little over a two-year period and then pass a vote in favor of an income tax. “When individuals don’t join together to serve the common purpose of the organization but rather get together so the organization can serve their many and varied purposes, then it’s deviating from its original mission, which ought to call its existence into question,” Kozak says. “If an organization outlives its purpose, why have it?”

Why indeed? To most lawmakers, TBR represents a slumbering giant, one that could easily become a force again should it revert to its founding principles. Perhaps a modern-day TBR can experience such a revival now that its members are swimming again under the watchful eye of one of their own lifeguards—Gov. Phil Bredesen, a founder/CEO himself. For the sake of the state’s future business climate, worried TBR members say the renaissance can’t come soon enough.