published Monday, February 7th, 2011

Haslam warns 'easy money' for budget woes gone

  • photo
    Gov. Bill Haslam listens to a question during his first news conference on Wednesday in Nashville. (AP Photo/Mark Humphrey)

NASHVILLE -- Tennessee Gov. Bill Haslam says the "easy money" answers to budget problems have been used up and that dealing with the recession's aftermath and a loss of federal stimulus funds is going to hurt.

"We have to now go back and make those hard decisions, and I think they're even harder than I thought they would be," the Republican governor said last week as he finished four days of public hearings on the state's 2011-12 budget.

The state has "made a lot of cuts and decreased services in a lot of areas already," Haslam said, noting that "when you go cut something, the easy money is first."

Last week, heads of 26 agencies trooped before Haslam, outlining their best efforts to identify additional cuts of 1 percent to 3 percent to plug a $185 million deficit and create room for other needs.

Proposals ranged from laying off state troopers and releasing felons from prison more quickly to slashing community services for the mentally ill and ending spiritual and social counseling for dying Medicaid patients and their families.

The state already has cut $1.5 billion from the budget over three years, and some agencies have lost close to 25 percent of their funding. But about $900 million of those cuts were staved off through use of state reserves or federal stimulus funds, which largely will disappear July 1.

BY THE NUMBERS

Here are some of the proposals to cut state spending up to 3 percent:

TennCare

* $26 million: Cut provider reimbursements another 1.5 percent

* $14.9 million: Cut payments for C-section births

* $ 14.5 million: Stop paying for end-of-life emotional, social and spiritual counseling for patients and families

* $8.4 million: Cut payments to emergency room doctors for non-emergency services

Safety

* $6.5 million: Shut down privately operated Whiteville Correctional Facility

* $6 million: Slash state contracts.

* $5.7 million: Release some felons 60 days earlier if they complete re-entry programs

* $3.3 million: Pay less to local jails that house state prisoners

* $2.4 million: Cut 35 positions in Tennessee Highway Patrol

* $2 million: Cut staff at youth development centers

* $900,000: Eliminate 26 positions at driver license centers

Health

* $1.39 million: Abolish 14 positions, reduce payroll equity

* $1.18 million: Cut out hemophilia program and shutter two primary care clinics

Education

* $375,000: Contract for early intervention visits for disabled children through age 2

* $300,000: Reduce funding to connect schools to the Internet

* $250,000: Cut recurring funding for seven public television programs

Source: State agencies

Haslam must present his budget proposal in March.

Jim White, executive director of the General Assembly's Fiscal Review Committee, said the governor and lawmakers must figure out how much money they will have and what essential services it will buy.

"The result of that process may be government is no longer able to do some things it has done in the past that people have come to assume that government will do," White said.

The state's overall current budget is estimated at $31.3 billion. White's office in December estimated the state general fund, which bankrolls most state services except for transportation, will collect about $8.4 billion in this fiscal year.

Haslam's predecessor, Democrat Phil Bredesen, avoided large cuts to the Basic Education Program funding formula for K-12 schools. Haslam said last week he intends to do the same, which would take about $70 million in additional spending.

But that ups the squeeze on other areas of government.

The mental health department, for example, already has been cut by about 23 percent. Stimulus funds delayed $11.54 million in cuts, but that money is ending. Another 3 percent cut would total $4.6 million, mostly for community mental health and alcohol and drug abuse programs.

Haslam said he has pushed for a "top to bottom review" of what the state does, but acknowledges that can't happen in time for the upcoming budget.

"But I think it is the way [to address problems]. ... It's not just about the dollars. It's about how and what we're doing."

Higher education also has taken hits.

Rich Rhoda, executive director of the Tennessee Higher Education Commission, told Haslam last week that state colleges and universities cut $286.7 million, or 23 percent, since fiscal 2008-09.

Stimulus funds and state efforts that temporarily offset those cuts are going away, he said, and long-term funding trends don't look good.

For example, over 10 years, enrollment at four-year institutions rose 22 percent while state appropriations dropped 33 percent, Rhoda said. Fees and tuition went up 74 percent.

And then there's TennCare, an $8 billion-plus state and federally funded program that provides health care for the poor.

Starting July 1, roughly $1.17 billion in cuts is scheduled to kick in unless hospitals agree to keep and enlarge a hospital assessment fee that draws down matching federal dollars for the program. TennCare officials say that will bring caps on hospital stays and other restrictions on care.

Tennessee Hospital Association President Craig Becker said hospitals will accept raising the present 3.52 percent assessment to about 4 percent. That would raise about $400 million, Becker said, and eliminate previously slated 7 percent cuts in provider reimbursements.

But the TennCare Bureau has proposed another 1.5 percent rate cut and called for an end to funding for counseling for terminally ill TennCare recipients.

Haslam said he's not counting on money from a larger assessment fee.

"If that [assessment fee] doesn't come through, we would either have to cut that much service or come up with some other revenue source which I don't have," Haslam said. "We're not going to have a tax increase this year."

Contact Andy Sher at asher@timesfreepress.com or 615-255-0550.

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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jpo3136 said...

The first thing Governor Haslam did was not enforce environmental laws in a way that provided him and his businesses a massive tax break. Does no "easy money" mean that he's out of gifts for himself?

The cuts outlined in the sidebar are despicable.

Fund education. Fund safety. Fund basic humanitarian and medical assistance for out Tennesseeans who are suffering. Many of them are old. They need help.

Not funding caring: that's what it means when it says cut end of life and grief counseling services. Just disgusting. What a reprehensible, selfish, and disgusting decision. Provide people with some basic regard when they are in need of help from the state. Anything less is below the basic humanitarian minimum we expect from our elected officials.

I am just shocked that this person has been elected Governor. This is appalling. What a disgusting summary of poor decisions. We need an immediate and dramatic reversal on all of these ideas, outlined above.

A shocking and disgusting performance, already; and, barely a month into his term.

We do not need another Bush administration affecting our state. Get a better plan now. This is just disgusting.

February 7, 2011 at 1:02 a.m.
dendod said...

This is a realistic way to approach the budget. That's something Democrats will never identify with. Some of these posters are just unhappy with the "CHANGE". The Republicans will get this state on a realistic road. Whiners are just that, whiners.

February 7, 2011 at 7:52 a.m.
acerigger said...

"The Republicans will get this state on a realistic road."

Yeah right, just like they did for our nation's economy. How foolish can you be?

February 7, 2011 at 12:20 p.m.
Humphrey said...

how many republicans want their children to be able to go school and go to college? The state has cut college funding 23% in the last three years! That is why tuition has gone up so much. Public university employees haven't gotten a cost of living or merit raise in 10 years! The universities have done nothing but cut. Eventually that will catch up. And the desire is to have more college-educated citizens in Tennessee to attract those foreign employers like VW. So the state can give them tax breaks. Same thing with law enforcement. Want to throw the book at criminals and lock them away? That takes money. And highways, medical, etc. Here's the thing, and some of y'all don't like it and refuse to understand it, but Tennessee's tax structure is regressive - it focuses on sales tax. So it taxes poor people a greater percentage of their income than the richer - and if you can just go out of state to buy those purchases and take those vacations, the state gets nothing. That's not a sound financial plan to fund the services this state needs. It isn't. It would be better to have a flat rate tax on everyone's income than to have a sales tax that fluctuates so much depending on spending. The poor man is going to have to buy his groceries, but the rich man doesn't have to spend his extra dollars if things are looking tight, and that makes it impossible to have a predictable sound budget.

February 7, 2011 at 2:30 p.m.
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