Funding board estimates leave some money to dole out
NASHVILLE (AP) — The groundwork for a minor budget struggle between Gov. Phil Bredesen and the Legislature was laid Monday when the State Funding Board adopted its revenue estimates for this year and next.
The money at stake is relatively small — between $15 million and $67 million in nonrecurring funds for the current year, and between $64 million and $112 million next year. But after several years of struggling to make ends meet while needs and wants piled up, even a little bit more money is enough to fight over.
The Funding Board adopted mid-range estimates for economic growth through June 30, 2005. The estimates — which project tax revenue growth ranging from 3.85 percent to 4.6 percent — define how much money the state can budget to spend for the fiscal year ending June 30 and next year.
“It’s been a markedly more pleasant process to have some one-time revenues to use for some things,” said Finance Commissioner Dave Goetz.
The Bredesen administration already has programmed $163 million in one-time money into this year’s budget. Paying for those expenses with recurring income instead the governor’s goal. Bredesen would like to put any money left over into the state’s reserve funds.
State lawmakers also have plenty of ideas of their own about where any additional money should go. One of their top choices would appear to be building projects for higher education. Bredesen has proposed to split paying for those projects between state funding and privately raised dollars, on a 2-to-1 matching basis.
However, many legislators feel such an approach is unfair to smaller schools that don’t have the alumni or community base needed to raise large amounts of money.
Lawmakers are looking for some sort of sliding scale that would provide a greater state match to those schools, such as the two-year community colleges and smaller four-year universities. Building projects are a good target for nonrecurring revenues, as those costs do not come back year after year.
Putting the budget on a strictly recurring basis is a goal that goes beyond the governor’s office. The chairmen of both finance committees have expressed their unease about having nonrecurring funds in the budget to pay for recurring needs, a questionable financial habit that contributed to the state’s financial woes and the downgrading of its credit rating in recent years.
Bredesen squeezed most of the nonrecurring money out of the current year’s budget but was forced to use some because of an unexpected jump in enrollment in Families First, the state’s welfare program.