Tennessee: Bredesen says money from stimulus still will require state cuts

Tennessee: Bredesen says money from stimulus still will require state cuts

February 12th, 2009 by Andy Sher in Local Regional News

NASHVILLE - Gov. Phil Bredesen said Wednesday that, despite money from a tentative congressional stimulus compromise, major cuts still may be required in Tennessee's budget.

Those could include some employee layoffs, the governor said.

"The stimulus package, particularly the Senate's stimulus package, which I think is the model for the compromises that were reached today, actually will require significant cuts in the state budget," Gov. Bredesen told reporters.

The state has been looking at slashing up to $900 million in state spending to deal with dwindling tax collections in the current national recession.

Still, Gov. Bredesen said, the congressional compromise should "certainly take some of the hard edges" off Tennessee's cuts.

The $789 billion congressional legislation hammered out Wednesday by U.S. House and U.S. Senate negotiators provides billions to states for infrastructure projects such as roads, as well as money in areas such as food stamps and special education, proponents say.

Gov. Bredesen said the Senate bill provided about $900 million less to Tennessee than the House version. Among other things, the Senate slashed $628 million in so-called fiscal stabilization funds intended to help states' budgets. One category largely eliminated would have provided $484 million to Tennessee and given officials wide latitude in how they used it.

Figures provided by state Finance Commissioner Dave Goetz show the measure that passed the Senate would have provided $3.6 billion to Tennessee while the House-approved bill would have provided the state some $4.89 billion - a $1.26 billion difference.

Commissioner Goetz said he understands the compromise is "substantially like" the Senate's bill. But officials want to see the actual bill to ascertain its effects, he said.

Meanwhile, Gov. Bredesen said legislation filed this week in the General Assembly should give the state more flexibility to move employees, change work hours and implement furloughs to avoid some layoffs.

The Tennessee State Employees Association was gearing up to fight the measure, but officials worked with employees and lawmakers to stave off the battle. Gov. Bredesen said employees now appear "supportive of the stuff that we're doing."