Bredesen proposes "painful cuts"
Departmental cuts, employee layoffs, added fees, and tapping the state's reserves are all part of Gov. Phil Bredesen's plan for balancing next year's budget amid an unprecedented time of negative revenue growth and historic-level deficits.
Bredesen unveiled his budget proposal for the FY 2010 -11 last week before a joint session of the Tennessee General Assembly in his eighth and final State of the State address. "This is the most difficult budget I've faced, but it's a common sense approach to ensure we live within our means and leave Tennessee with a responsible, balanced budget," said Bredesen.
The budget, totaling $28.4 billion, represents a 5.1 percent decrease from last year, mostly due to a 13 percent decline in federal revenues that for the past two years have been available to the state through the American Recovery Act. Bredesen's FY 10-11 budget does not include any additional stimulus funds.
He is proposing reductions of about nine percent in most state departments, with TennCare taking the lion's share of the cuts. TennCare's annual budget would be reduced by $200.7 million, more than half of the $394.2 million in departmental cuts Bredesen is recommending.
The budgets of Higher Education, Mental Health and Developmental Disabilities, and the Division of Intellectual Disabilities have reductions of six percent; Children's Services is at five percent; and the Department of Correction is just one percent.
"These are difficult cuts, primarily in some of the most vulnerable areas such as mental health and the intellectual disabled," the Governor said.
Among the revenue enhancement measures proposed is charging local governments forensic service fees for DNA testing. Under the proposed plan, the Tennessee Bureau of Investigations would charge local police departments $20 per exhibit. If DNA testing is involved, another $100 would be added to the cost. The Bureau estimates the fees would generate $2.2 million annually and would preserve the positions of 30 forensic scientists who work in three crime labs across the state.
The Governor is also proposing a new tax on cable services, cable boxes and business telecommunications services, which is estimated to generate some $50 million in new revenue. Of that, $32.1 million will be earmarked for higher education and the rest will be used to avoid about 200 layoffs of district attorneys, public defenders, and probation and parole officers.
The budget also includes a $2 increase on driver's licenses, raising the fee from $19.50 for five years to $46 for eight years. The increase - the first since 1988 - is estimated to generate $9.5 million annually and would prevent the state from eliminating 85 filled trooper positions and 56 filled positions in the driver's license stations. It will also help fund upgrades to the Tennessee Highway Patrol's radio/communication system.
Employee layoffs are also being proposed, but by how many could be determined by whether or not the General Assembly approves Bredesen's plan to use some of the state's rainy day fund to minimize these job cuts.
In addition to not filling 456 vacant positions, a total of 1,363 state positions are targeted for elimination. The Governor said about 1,000 positions should be eliminated "for good business reasons," such as bringing staff ratios in line or closing an unneeded facility. However, the Governor said the remaining 314 positions are jobs "we would strongly prefer not to lose."
He is proposing drawing down $202 million from the Rainy Day Fund to preserve these positions for two years, along with 80 others that are scheduled to be laid off this spring. "At the end of the two years, the economy may have made the layoffs unnecessary, and further it has been our experience that people in those positions are likely to have found other jobs making any involuntary action unnecessary," said Bredesen.
And despite the tough economic times, Bredesen's budget does call for some additional spending. In the area of K-12, his budget fully funds the Basic Education Program, as well as provides for $43 million for some BEP growth.
His budget also includes an $81.7 million contribution to the state's pension system; a one-time three percent bonus for state employees; $23.5 million jobs-incentive package offered through the Department of Economic and Community Development; and $10.9 million to restore land and soil conservation funds that are paid for through the real estate transfer tax.
