Bredesen open to employee furloughs to soften layoffs

NASHVILLE -- As Tennessee revenues continued to take a beating, Gov. Phil Bredesen said he is open to measures such as furloughs and contract freezes to soften the need for state employee layoffs.

"I am very willing to look at that," Gov. Bredesen said Tuesday.

But he noted he must make "tough" cuts in the 2010-2011 budget that he presents next year to the General Assembly.

"You really feel a sense of responsibility to the employees as well as the taxpayers, so to the extent possible, I'm going to try to keep people employed," Gov. Bredesen said.

Earlier this week, Tennessee State Employees Association acting President Almous Austin questioned the need for employee layoffs, asking, "Who will provide services to the citizens across the state?"

The TSEA is calling for an "intense examination" of contracts with private vendors. The group's leaders also said furloughs should be a "last resort to prevent layoffs."

Gov. Bredesen will begin public budget hearings Monday and listen as department heads explain where they intend to cut an additional 6 percent from their budgets. They've been warned there are plans to slice off 3 percent more if necessary.

The Bredesen administration on Tuesday released revenue figures for October, reflecting September tax activity.

First-quarter total collections for the year that started July 1 were $101.3 million less than budgeted estimates. Revenues for the general fund, which provides money for K-12 education and many areas of government, was $88.2 million less than expected.

In October alone, Finance Commissioner Dave Goetz said, the general fund was $24.2 million under estimates.

While revenue losses are "somewhat better," Mr. Goetz said he remains "extremely concerned" about shortfalls he believes could hit $200 million to $300 million by June 30.

There are $500 million in reductions in the current 2009-2010 budget that now are being supported by nonrecurring funds from state reserves and federal stimulus funds, he said. Those funds "disappear" on July 1, Mr. Goetz said.

And there are about 500 employee layoffs "baked into the current budget," he said.

House Democratic Caucus Chairman Mike Turner of Nashville, an advocate for state employees, said Gov. Bredesen is "working on some things to make these cuts as easy as he can. He's looking at things that might prevent some layoffs. But this is a bad budget."

Not everyone believes revenues are running as badly as the administration says they are.

The General Assembly's Fiscal Review Committee released its own figures that estimate the first quarter shortfall at only $7.23 million. The panel's staff and the administration differ on how much money must come in each month to maintain annual projections.

Meanwhile, U.S. Rep. Zach Wamp, R-Tenn., who is running for governor, recently told Republicans in Nashville that he doesn't expect the state's fiscal condition to improve much any time soon. He urged Gov. Bredesen, a Democrat who cannot run for re-election, to begin cutting next year.

"I fully expect to be sworn in and have to continue laying people off," Rep. Wamp said, according to a transcript from Nashville public radio station WPLN-FM.

"And I hope it's 'continue' instead of we have to lay them all off because they didn't start the process early enough to have an honest-to-goodness, nonrecurring balanced budget."

Noting that Rep. Wamp is running for governor, Gov. Bredesen said, "everybody's got their ideas when they're doing that."

"I've really tried to preserve jobs when I could," the governor said. "I've been willing to lay people off, but this is a very tough time to go out and try to find a job."

He said he has used federal stimulus funds to help where he could.

"Come the spring, there will be some layoffs," Gov. Bredesen said. "Hopefully, the economy will be in better shape then and people will have more options at that point."