NASHVILLE - State departments and agencies have been ordered to draw up plans to cut their budgets by five percent next year and hold off on proposing new spending unless they reduce a like amount in another area.
"The uncertainty of the economy is a concern and suggests that base reductions greater than indicated earlier likely will be necessary in 2012-2013," Finance Commissioner Mark Emkes explained to agency heads in his Aug. 22 letter.
He said that assuming 3 percent growth, a base reduction of five percent, or $270 million, could be required to balance the budget next year.
But the Haslam administration is continuing to try to spare the state's Basic Education Program funding formula as well as pre-kindergarden programs, according to the letter, which states these programs are being "held harmless" from reductions in discretionary base spending.
In his letter, Emkes pointed out that departments are already losing $160 million in one-time funding for "core services" and that the five percent cuts would come on top of that.
Emkes said he was "kindly requesting" agencies eliminate all positions that have been vacant for longer than a year and cut budgeted recurring grant and professional contract funding scheduled to revert for more than a year.
State agencies recently had to submit plans detailing how they would cope with up to a 30 percent reduction in federal spending. Gov. Bill Haslam has said he doubts federal spending, which amounts to about 40 percent in the current $30.8 billion budget, would be reduced that much but the state needs to be prepared.
Read more in tomorrow's Times Free Press.