Tennessee Gov. Bill Haslam's $33.3 billion budget for fiscal 2016 includes planned pay increases for both K-12 teachers and higher education employees, along with $165.8 million worth of infrastructure commitments for Volkswagen's planned expansion here in Chattanooga. But it also recommends spending cuts of $200 million in a number of other areas -- including the elimination of 559 state employee positions.
Boldly, the plan fully funds the state's Complete College Act at $25.7 million and will change how colleges and universities are paid. Rather than paying for each enrolled student, institutions will be rewarded for moving students toward graduation.
The proposal anticipates state revenue growth of $300 million. One source of revenue increase would bump the state's Health Maintenance Organization tax from 5.5 percent to 6 percent to bring in another $33.5 million for the state's TennCare health insurance program for low-income Tennesseans.
Haslam plans to capture other new recurring revenues either through natural growth of existing taxes or closing off corporate tax "loopholes."
This is the same Republican governor who recently asked the GOP-controlled Tennessee General Assembly to expand Medicaid in Tennessee by using the Affordable Care Act -- Obamacare -- and its federal Medicaid funds to extend health insurance to 280,000 low-income, working Tennesseans. His request didn't even make it out of committee, and thus did not receive a vote during a special session called just to consider the move. The option was a no-brainer. Tennessee would spend $1.7 billion over the next several years and gain $22.5 billion.
But Haslam, in this his State of the State address Monday, didn't beat up on the lawmakers. Instead, he appealed to their better and nonpartisan angels.
Health care costs are still "eating up too much of our state's budget and impacting the federal deficit and nation's debt," Haslam told lawmakers. "According to the Congressional Budget Office, if we maintained health care costs at their current levels, which we know are inflated, for the next eight years -- just kept them flat -- we'd eliminate the nation's deficit. To do that, we can't keep doing what we have been doing."
Haslam told the state lawmakers: "I hope we can find a way to work together to address those problems."
Let's hope they do have some better and nonpartisan angels.