K-12, TennCare, Bredesen big budget winners
Only two areas of state government get a significant infusion of state funds: K-12 education and TennCare.
The money pumped into them — $111 million and $350 million, respectively — comes largely from cuts made to other state departments and agencies.
The biggest single hit went to higher education, which had to give up $102 million for the fiscal year beginning July 1, in addition to a $40 million cut to help balance the current budget.
And the state’s colleges essentially get hit with a double whammy once a new state lottery is implemented.
Proceeds of the lottery will fund scholarships that almost certainly will increase the number of Tennesseans seeking to further their educations, but the Legislature didn’t authorize any additional money to help colleges deal with that influx.
‘Higher ed took it on the chin pretty well,’ said Rep. Craig Fitzhugh, D-Ripley and vice chairman of the House Finance Committee.
‘With the additional input of students because of the lottery scholarships we’re really going to have to look at that hard to provide the necessary funding instead of continuing to raise tuition like we have.’
Other losers included roadbuilders, but the Tennessee Department of Transportation’s budget cut of $66 million is only a one-time hit.
Cities and counties have lost for a long time, if not forever, $37.2 million of the tax revenues that the state has typically shared with them.
But their loss is much lower than Gov. Phil Bredesen originally proposed, because he has agreed to alternatives proposed by city and county officials, and by lawmakers.
‘We haven’t hit a home run, but I’d say we had a triple with a couple of guys on base,’ said Bob Wormsley, director of the Tennessee County Services Association, after successfully getting some cuts restored.
Sen. Jim Kyle, D-Memphis, said local governments are actually winners in the budget.
‘It’s going to be very hard to take any more money from them in the future; they’ve limited their exposure,’ he said.
There’s still disagreement between the House and Senate on whether to increase estimates on the value of closing a banking tax loophole in order to restore $1.5 million for cities heavily affected by a cut to the Hall Income Tax money shared by the state.
But that’s a minor aspect of the $21.5 billion budget that lawmakers are expected to give final approval this week.
That makes taxpayers winners, because legislators will finish up their annual session much earlier than in previous years — and without raising state taxes. To balance the budget last year, lawmakers increased a variety of taxes to bring in nearly $1 billion.
There is the possibility that some Tennesseans will have to pay increased property taxes to make up for the city and county losses, but Bredesen and many lawmakers say the local governments should cut their budgets instead.
Perhaps the biggest winner in the entire budget process is Bredesen.
He vowed before taking office in January to pass a budget with no new taxes, no questionable accounting tactics and no protracted battles. Lawmakers, weary after four years of battling over taxes, are going along with most of his proposals with only some minor tweaking.
‘I think what the budget accomplishes is getting the discipline once again to live within the revenues we have and not put on rose-colored glasses and hope for new revenues, like we have, or do silly things like use one-time money,’ the governor said. ‘It gets us back in the middle of the road.’