State lawmakers say TennCare to blame for budget shortfall
More budget troubles appear to be emerging for state government despite last year’s 1 cent sales tax increase that was expected to net the state more than $900 million.
Sen. Jerry Cooper, who has seen many budget battles in the past few years and who co-sponsored a last-minute plan for last year’s increase along with Rep. Charles Curtiss, said the current projections for this year’s shortfall appear to be related to TennCare.
“The bottom line is TennCare, as we know it, is eating our lunch,” Cooper said of $258 million in unforeseen TennCare costs that were found after a study was performed. “That study, which was what we were basing the budget on, was some $250 million-plus, off.
“And then I don’t have to tell you about the economy,” Cooper continued. “People are just not spending money. So depending on sales tax – when you and I don’t go buy stuff at the stores – the budget projections are not there.”
Curtiss said the 1 cent increase was never meant to be a long-term fix. He attributed budget concerns to more expenses for TennCare that were based on an “educated guess,” not being able to take participants off the TennCare rolls when planned, as well as the economy.
“When you’re anticipating what’s going to happen, sometimes you’re not as accurate as you hoped to be,” Curtiss said of TennCare. “I think there were some inaccuracies that there wasn’t as much savings as we anticipated, or in the opposite, there was more expense than we anticipated.”
Curtiss said he is not expecting as controversial a year as last year, which was a year when income tax ideas circulated, when local governments worried about their state-shared revenue and budget proposals were named after animals.
This year, legislators perhaps will be re-evaluating programs, making cuts where possible and taking a look at taxing Internet sales, Curtiss said. Cooper indicated support for Gov. Phil Bredesen’s ideas for budget cuts and eliminating some state positions.
“Gov. Bredesen is taking appropriate steps,” Cooper said. “I think we’re going to re-look at the TennCare program and right now we’re just pouring money into a black hole. A lot of legislators like myself, we’re just tired of that. And so TennCare as we know it today, I would suggest, is going to be changed drastically.”
Cooper said he hoped proposals for state job cuts are applicable to the 6 to 8 percent of the 38,000 state jobs that are unfilled. “I’m hoping that he’s talking about those slots that we have budgeted but there is nobody in those slots,” he said.
Curtiss estimated a shortfall for this year of between $200 and $300 million and said next year’s budget scenario would be difficult to predict, although some estimates are $500 million short.
Tax increases were not high on either one’s list in the short-term future.
“That’s a dead issue, so we’ve got to find a way to operate within our means and look at these big programs like TennCare and make some changes,” Cooper said.
“I think we’ll be trimming back,” Curtiss added. “I think we’ll have to re-evaluate some of the programs we’ve got and decide whether they’re necessary. If they’re not necessary, I think you’ll see some programs eliminated or scaled back and those that are necessary, I think we’ll shore up and make sure we try to keep the same services we’ve got today – and look at different departments in state government and see if there’s a better way to become more efficient.”