Tennessee governor calling for businesslike approach to cuts

Tennessee governor calling for businesslike approach to cuts

By: AP

By ERIK SCHELZIG
Associated Press Writer
NASHVILLE (AP) — Gov. Phil Bredesen wants to take a businesslike approach to the budget cuts needed to fill a more than half-billion dollar shortfall in the state’s upcoming spending plan.
“Government shouldn’t be insulated from things that ordinary families and businesses have to deal with in adjusting their expenditures,” Bredesen told The Associated Press in an interview.
Bredesen, a Democrat who ran a publicly traded company before becoming a politician, said layoffs of state workers are an unavoidable component of the cuts.
“If you’re not going to touch personnel costs — which are certainly far and away the largest single cost in state government — you’re not going to do that without tearing everything else up completely,” he said.
The governor has not yet indicated how many of the state’s about 47,000 employees could face layoffs. Lawmakers say the administration is working on ways to offer retirement incentives or buyouts as a way to soften the blow.
Bredesen said he’s not worried that drastic budget cuts will undo the programs he’s initiated since taking office in 2003.
“It would be nice to have every little thing you ever did remain untouched, but I don’t claim everything is perfect,” he said. “And sometimes it’s just a matter of you run your business better in a tight year.”
Bredesen has warned that no area of state government is safe from cuts except for K-12 education. Senate Speaker Ron Ramsey, a Blountville Republican, said he agrees with Bredesen’s stance.
“I have to hand it to him that he’s taken an approach that I think I wanted to take: Just make the cuts that need to be made,” he said. “We will balance the budget with existing revenues.”
Potential areas for budget cuts include:
• School funding: While Bredesen has pledged to cover the annual growth in the state’s school funding formula, he hasn’t said whether he will still dedicate an additional $87 million in cigarette tax money to schools. The Legislature last year approved a 42-cent tax hike on every pack of cigarettes, mostly to boost funding for schools. But the tax money isn’t legally bound to education programs, so it might be one area where Bredesen could find extra dollars.
• Pre-kindergarten: Bredesen has acknowledged that it’s unlikely he will be able to add another $25 million to the pre-K program this year. Senate Republicans — who have been cool to the pre-K program to begin with — are unlikely to want to go along with even a slight increase.
• Higher education: The state is mandated to pay for K-12 education in Tennessee. Not so for higher education. Given that leeway, the state’s public colleges and universities are likely to have to make do without any increased funding — and could even face a reduction in state money.
Lawmakers worry that any drop in funds will equal a boost in tuition, but it’s unclear how much leverage they have to stop it.
“Who has to pay the tuition if it goes up? It’s the same people who are paying $3.50 plus for gasoline and for food costs that have gone up, by one estimate, 10 percent in one quarter,” said House Finance Chairman Craig Fitzhugh, D-Ripley.
Higher education officials have said they planned to keep tuition hikes below 10 percent, but that was before they faced the possibility of state funding cuts.
• TennCare: The state’s expanded Medicaid program that once created the largest pressures on state finances could now serve as a safety valve in tough economic times. Bredesen in 2005 cut 170,000 adults from the program and cut back benefits to thousands more.
Instead of trying to manage hundreds of millions of dollars in annual increases in TennCare costs as he did when he first came into office, Bredesen can now consider delaying plans to expand eligibility to save money.
• Pay raises: Bredesen has backed off his plan to spend $30 million to give state employees an average 2 percent pay raise. House Democrats, meanwhile, have argued that the state could tap reserve funds to give state workers one-time bonuses to defray the lack of a raise and the prospects of layoffs.
Published in The Messenger 5.05.08

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