The Haslam administration has predicated its 2016 budget on the Tennessee economy growing at a rate of between 3 and 4 percent.
That expected growth rate, together with $200 million in cuts the governor suggested in his February State of the State address, was anticipated to give him the $33.3 million spending plan the General Assembly passed during the recently completed session.
Republican Gov. Bill Haslam speaks at the state Capitol in Nashville on April 23, 2015.Barring something unforeseen, that growth rate would give the Volunteer State record revenue for fiscal 2016, following the record revenue it is on track to have for 2015.
That's all good, right? Well, yes and no. The record revenue is good, of course, but the costs of K-12 public education and health care increase more than revenue -- even in a strong revenue year.
So, because the cost of K-12 public education and health care are mandated, the allocation for higher education, road construction and any other priority -- minus any budget acrobatics -- conceivably should decline every year. That doesn't happen every year in real numbers, but all other funding becomes more difficult.
That's what state Sen. Bo Watson and state Rep. Gerald McCormick maintained in discussing the funding of various aspects of the budget in a meeting with Times Free Press editors and reporters Tuesday. Specifically, they were referring to the increased money legislators put in the budget for teacher salaries, benefits and liability insurance, only to have the state face a lawsuit from Hamilton and several other counties over the lack of getting their full share of the Basic Education Program formula.
"They should drop the lawsuit and come to the table," said McCormick, noting the lawsuit was filed a day after Gov. Bill Haslam met with the heads of large-school districts. "They're not helping kids."
In fact, Watson noted, "if they are suing, they are suing the taxpayers."
If such a suit is continued and eventually lost by the state, McCormick said, higher education and many other important social services in the budget would have to be slashed in a state that appears to have no interest in raising taxes.
An important caveat to that nightmare scenario, Watson said, is finding out why it is that education and health care costs grow faster than other budget items.
"That," he said, "is the challenge."
That's a national as well as a state problem and one that must be solved for more sustained growth in both governments.