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State budget cuts hit Tennessee colleges and TennCare as economy falters

State budget cuts hit Tennessee colleges and TennCare as economy falters

Posted: Wednesday, October 8, 2008 9:11 pm
By: AP

  KNOXVILLE (AP) — Faced with a faltering economy and falling tax collections, Tennessee is turning to its public colleges and universities, and its health care programs for the poor to absorb a new round of budget cuts worth more than $106 million.

The 42,000-student University of Tennessee system and the 180,000-student Tennessee Board of Regents system have been told to develop a plan by next week to save $43.7 million.

TennCare, Tennessee’s $7 billion expanded Medicaid program, will have to find ways to save $44 million, while the remaining $20 million in savings will be spread across state government.

The flow of money from Nashville to local governments for K-12 education will not be affected, though no state agency, including the state Department of Education, will be exempt from belt-tightening.

“This is an interim step towards being able to deal with what is a very serious fiscal crisis,” Finance and Administration Commissioner Dave Goetz said Tuesday in a teleconference from Nashville.

The impact on colleges, social service providers and others is not immediately clear.

TennCare spokeswoman Marilyn Wilson said the agency was already working to cut unlimited home care benefits for about 1,000 patients and reduce payments to providers for wheelchairs and other “durable medical equipment” because of skyrocketing costs.

“We are always looking for ways to stretch our resources,” she said. 

“Now, we are looking to stretch them even further because when the economy takes a downturn, we get an uptick in enrollment. And we are already starting to see this.” With colleges and universities, “it will be safe to assume there will be hiring freezes and elimination of unfilled positions,” said Rich Rhoda, executive director of the Tennessee Higher Education Commission.

Tennessee State University in Nashville and Southwest Tennessee Community College in Memphis already were considering layoffs because of decreasing enrollment and budget cuts.

Gov. Phil Bredesen’s administration shaved $460 million off the $28 billion state budget from the start. That included a $56 million hit to higher education, which responded by raising tuition for students.
Published in The Messenger 10.08.08

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