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State appropriating money for Tennessee flood victims

State appropriating money for Tennessee flood victims

Posted: Wednesday, May 12, 2010 9:03 pm

By LUCAS JOHNSON II
Associated Press Writer
NASHVILLE (AP) — Gov. Phil Bredesen will find money to help Tennessee flood victims by using the state’s cash reserves if necessary, the state’s top fiscal officer said Tuesday.
State Finance Commissioner Dave Goetz presented a summary of Bredesen’s budget proposal to the Senate Finance Committee.
He said about $17 million has been identified that can be pulled from different types of funds for emergency use.
Goetz said it’s not yet known what impact the recent historic flooding in West and Middle Tennessee will ultimately have on state spending, but he said state officials are prepared to dip into the rainy day fund if more money is needed.
He acknowledged Tennessee has had to siphon another $100 million from the reserves over what was recommended in January because of revenue loss in the current year. But he said about $330 million should remain in the rainy day fund at the end of the next fiscal year, and another $170 million is expected in TennCare reserves.
Nashville Mayor Karl Dean has estimated at least $1.5 billion in flood damage to the city alone.
“We’re still trying to understand the depth and the nature of the damage,” Goetz told reporters outside the committee.
Committee members got a peek later Tuesday at a Republican proposal that would eliminate $113 million in one-time bonuses for state employees and teachers as part of a plan to close Tennessee’s budget gap.
Republicans were drafting an alternative to Bredesen’s proposal to raise $85 million by lifting a sales tax cap on big-ticket items. The overall projected shortfall for the upcoming budget year is about $150 million beyond what the Democratic governor addressed in his original spending plan.
Most of the GOP plan would move recurring funds to one-time money. For instance, the career ladder program and 401K match for employees would continue for two years before ending.
“They’re not really cutting a whole lot,” said House Democratic Caucus Chairman Mike Turner of Nashville. “They’re taking a lot of things from recurring to non-recurring.”
Turner said he likes some aspects of the GOP plan. But he said he and members of the Democratic Caucus oppose many others, such as cutting employee bonuses.
“I think it’s pretty tough for the House Democrats to vote for it,” he said.
Bredesen told reporters Tuesday evening that he didn’t see any steps in the the GOP proposal that he considered out of the question, though he hasn’t yet fully analyzed it.
“This has some very unpleasant things in it, it’s not my set of priorities, but there’s nothing crazy about it,” Bredesen told reporters at an education policy meeting.
Bredesen didn’t name any specific concerns about the plan. He said work to settle differences would begin with his weekly breakfast with legislative leaders today.
“There are obviously some things in it that I don’t care for,” Bredesen said. “But there always are in the first proposals, and I think we’ll get a lot of them worked out.”
Goetz earlier told reporters that the administration believes state employees and teachers deserve better.
“We’ve had a hiring freeze in place for three years,” he said. “We’re asking our employees to do a whole lot more, and they’ve not had a raise in that period of time,” he said.
Goetz also noted during the meeting that services were being preserved to benefit enrollees of TennCare, the state’s expanded Medicaid program.
Earlier this year, the Centers for Medicare and Medicaid Services said Tennessee could keep some of the reimbursements it makes to the federal government to pay for prescription drug benefits. That helped the state make a one-time appropriation of about $430 million to postpone some cuts.
Limits on non-emergency outpatient visits, physician procedures, and implementation of a $2 copay on non-emergency transportation are among items that will be postponed for a year.
Associated Press Writer Erik Schelzig contributed to this report.

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