published Monday, December 5th, 2011

Tennessee workforce falls about 10% since 2008

An exterior view of the Tennessee State Capitol building.
An exterior view of the Tennessee State Capitol building.
Photo by The Tennessean /Chattanooga Times Free Press.

NASHVILLE — The lingering aftershocks of 2008’s Great Recession are changing the face of Tennessee government, particularly its size. Most state functions are operating with almost 10 percent fewer workers now than before the downtown.

Data compiled by legislative analysts shows there were 47,102 full-time positions supported by the general fund in the pre-recession 2007-08 budget. That has fallen to a projected 42,856, or about 9 percent, in the 2012 state budget that took effect July 1.

The information is based on annual figures for the last five budget years compiled by the House and Senate finance committees and the Office of Legislative Budget Analysis.

Figures exclude the Transportation Department, which is funded separately. That department lost 6.24 percent of its workers during the period and has 4,667 in the current budget.

Higher education employees also weren’t included in the analysis.

“Having fewer state employees is rough,” said Robert O’Connell, executive director of the Tennessee State Employees Association.

“Fewer employees mean fewer services,” O’Connell said. “That’s just the way the math goes. When the people of Tennessee see the potholes not being filled and see kids in the middle of the night not being rescued from bad situations [by state workers], they’re not going to like that one bit.”

The recession and the ensuing modest recovery have pounded revenues in Tennessee and other states. Tennessee legislative analysts estimated the share of the budget funded by state taxes and fees dropped some $1.5 billion between fiscal year 2008 and FY 2012.

Federal stimulus funds helped, but most of that money is now gone, and Congress is showing little appetite for providing more aid.

Tennessee revenues are improving — this year’s 4.5 percent estimates are turning out to be more like 5 percent so far in the state’s $31.6 billion budget.

But they still are expected to come in short of FY 2008 levels until next year.

Ripple Effects

The face of state government is changing in other ways as well, sometimes for budgetary reasons and sometimes not.

For example, the state’s Department of Mental Health plans to shut down Lakeshore Mental Health Institution in Knoxville and outsource patient care to private providers. Haslam’s mental health commissioner, Doug Varney, said the patients can be handled more cost effectively that way.

Some 375 employees would lose their jobs, although officials say they should find work with private providers or elsewhere in state government.

Last month, Gov. Bill Haslam directed state agency heads to prepare plans to slash 5 percent from their budgets. He also called for abolishing any state position that has been vacant for more than a year.

In response, Children’s Services Commissioner Kathryn O’Day proposed shutting down the Taft Youth Center in Pikeville. That would cost some 200 jobs, but O’Day said the teenage offenders could be served more cost effectively at the other four state-operated centers.

O’Connell said employee numbers have been slashed in past recessions but eventually rebounded.

“I’m a little worried now that the money just isn’t there; it’s a political stance. There’s no doubt the money’s improving,” O’Connell said.

Haslam has emphasized that state government officials should question all services to decide whether they are a state responsibility and if they could be done more efficiently or outsourced.

TennCare

The impact of cuts is felt in other areas such as grants and, increasingly, by TennCare providers.

After concluding hearings last week on the upcoming 2012-13 budget, Haslam said he will focus on maintaining state funding for local education and increases in areas ranging from TennCare to state employee health costs.

“The revenue picture is better, but we have increased funding obligations,” Haslam said.

Haslam said the current budget anticipated $300 million in new revenue but faces some $500 million in needs for built-in costs. And that doesn’t include $160 million in nonrecurring funding for “core” services that goes away July 1.

Those core services are considered especially sensitive. They include areas such as mental health peer support centers, although mental health officials hope to spare cuts there. Together, the shortfall and funding loss represent a $360 million gap.

Tennessee and primarily TennCare, the state’s version of Medicaid, have been helped considerably by a 4.52 percent assessment on hospital revenues.

But Uncle Sam owes the state $82 million for TennCare services, which Congress has not agreed to pay.

On Jan. 1, the state will cut 4.25 percent in reimbursements for group-home operations at Chattanooga’s Orange Grove Center, which cares for severely mentally retarded people, many of whom also have health issues.

Orange Grove Executive Director Kyle Hauth said if the reduction goes through, it “will have devastating implications for Orange Grove, more specifically people who are served in our intermediate care facilities.”

TennCare officials say Orange Grove and similar providers could face another 5.5 percent in reimbursement cuts.

Darin Gordon, TennCare’s director, told reporters last week that TennCare has experienced six years of cuts and is running out of options.

“Each year it’s going to get more challenging,” he said, noting many states long ago began slashing provider reimbursements.

Haslam said he hopes that shuffling priorities will help avoid the full 5 percent cuts he’s asked agencies to plan for.

Still, the Republican governor is banking on revenue growth, not tax increases, to fill gaps.

“I sure don’t see any kind of tax increase,” he told reporters last week. “I don’t see that as a possibility at all in [next] year’s budget.

“I do think, hopefully, we’ll see some real revenue [growth]. We’ve seen some encouraging signs there.”

about Andy Sher...

Andy Sher is a Nashville-based staff writer covering Tennessee state government and politics for the Times Free Press. A Washington correspondent from 1999-2005 for the Times Free Press, Andy previously headed up state Capitol coverage for The Chattanooga Times, worked as a state Capitol reporter for The Nashville Banner and was a contributor to The Tennessee Journal, among other publications. Andy worked for 17 years at The Chattanooga Times covering police, health care, county government, ...

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nucanuck said...

Public wages and benefits are higher than the private sector. Those wages and benefits should be re-aligned before cutting more positions. State workers won't like that, but that is the new reality.

December 5, 2011 at 1:18 a.m.
Nosense said...

Nucanuck Public wages are not higher than the private sector, at least not for professionals. However, you are spot on with the benefits and defined benefit pension plans. 30 days off a year is pretty sweet too. Defined benefit plans will eventually bankrupt the government. As people live longer these are not sustainable. The government needs to wake up.

December 5, 2011 at 9:08 a.m.
crazytrain said...

I am a state employee. I started working in April 1973 right before I graduated from high school. I made less than $3000.00 a year. It took me 30 years to make $30,000.00 a year. I hope to retire in June 2012. If I do, I will be drawing less than the 2011 poverty level of $10,890 for a family of 1. I've worked hard and have raised 2 children without child support from my ex-husband. I resent your implication that we make a lot of money and have a wonderful retirement. I do appreciate the fact that I will be able to draw retirement...I realized there are many people who do not have any. I don't know quite what you mean by a defined benefit pension plan. Also, I don't know where you got that we get 30 days off a year. We get 12, 13 days a year paid holidays. The state employees that make any money are department heads and commissioners and assistant commissioners who for the most part are appointed directly by the governor. So if you have any beefs with state employees, take it up with them.

December 5, 2011 at 3:55 p.m.
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