Tennessee Senate, House likely at odds over budget

Tennessee Senate, House likely at odds over budget

June 14th, 2009 by Andy Sher in Politics State

NASHVILLE -- The Republican-controlled Senate hopes to put its version of Tennessee's 2009-10 budget up for a floor vote Tuesday, but in the evenly split House, Democrats already are calling major components of the GOP plan dead on arrival.

"I think the Democrats are in lock step on the budget," said House Democratic Caucus Chairman Mike Turner, of Nashville, adding he believes at least some Republicans will join them.

He said there "obviously will have to be some compromises, but what they (Senate Republicans) have proposed, even with the changes, is not something we can consider."

Lt. Gov. Ron Ramsey, R-Blountville, the Senate speaker, said he expects the GOP version will pass in the Senate, where Republicans have a 19-14 majority.

"I hope we come to some kind of an agreement," Lt. Gov. Ramsey said of the House and called the bill that emerged from the Senate Finance Committee "a very good budget."

"It uses the basic premise that you don't spend money that you don't have and, even in the worst case, you don't borrow money you don't have," Lt. Gov. Ramsey said, citing continued declines in state revenues.

The political situation is far different in the House where there are 49 Republicans, 49 Democrats and a Republican speaker, Rep. Kent Williams, of Elizabethton, who was elected by Democrats.

While Rep. Williams has supported Republicans on issues such as gun rights, he said last week he largely backs Democratic Gov. Phil Bredesen's budget. House Democrats do too, although they have differences with the governor over how many state employees must be laid off.

Rep. Williams said he rejects Senate GOP proposals such as the speeding up of many cuts already specified by Gov. Bredesen and the elimination of proposed bonds for projects such as the UTC library.

"As you know, the administration's been working on this budget now for five months. I think they have a little more expertise than the Senate or the House," he said. "For us to come and, you know, just take that budget and throw it in the trash is ridiculous."

Rep. Williams said he hopes the House will move on the budget this week.

Senate Republicans' plan calls for $100 million in net reductions by accelerating cuts in fiscal year 2010, which begins July 1. The cuts would go into effect Oct. 1 if revenues continue to fall below projections, which Democrats say already has occurred.

UTC LIBRARY IN LIMBO

Republicans also reject Democratic Gov. Bredesen's call to issue $350 million in bonds for bridge repair or replacement as well as about $138 million in bonds to keep higher education building projects, including a UTC library, moving.

House Republican Caucus Chairman Glen Casada, of College Grove, acknowledged Republicans can't prevail in the House if Rep. Williams and the Democrats work together.

"They've got 50 votes, but it's just disappointing we can't get them to be a little more frugal with the taxpayer dollars in a down time," he said.

But while Rep. Turner says some Republicans will come on board, Rep. Casada said he believes 49 House Republicans will stick together.

"I've talked to every Republican, and they like not doubling our indebtedness," Rep. Casada said. "They like deleting the tax increases that are in there, and they like kicking in the cuts if we don't meet our revenue numbers."

Senate Republicans rejected $8 million in taxes proposed by Gov. Bredesen but accepted more than $150 million in other tax increases.

After Senate Republicans last week unveiled their own plan, it drew a stinging condemnation from Gov. Bredesen who labeled as "stupid" some aspects, such as eliminating $16 million in funding for a West Tennessee "megasite" industrial development park.

The GOP move came just as the governor was about to jet off to Europe to pitch the site during an economic development trip. Senate Republicans restored the funding.

Senate Democrats, meanwhile, are criticizing sharply the acceleration of cuts in areas such as the elimination of a $375,000 grant for the state's poison control center, operated by Vanderbilt University.

Meanwhile, the GOP has set itself up for another confrontation with the governor, rejecting his call to shift $22 million in prekindergarten funding from lottery proceeds, which are running below projections, to a recurring general fund appropriation. Republicans instead shifted the funds to one-time funding out of a lottery reserve.

Gov. Bredesen called it a "precursor to trying to get rid of it (pre-k) entirely, and I'm not going to let that happen. That (veto) would certainly be something I would consider."

Battling budgets

With the start of Tennessee's 2009-10 fiscal year just weeks away, Democratic Gov. Phil Bredesen and the Republican-controlled Senate have different ideas about the budget. Here are some differences:

n Cuts: Gov. Bredesen's budget shifts $750 million in recurring funding to nonrecurring funding with actual cuts spread out in FY 2010, FY2011 and FY2012. An estimated $250 million of those cuts would occur during FY2010. Republicans want to accelerate the 2010 cuts and make them effective Oct. 1 if funds aren't available.

n Higher education capital projects: Senate Republicans reject the governor's effort to issue $138 million in bonds to fund previously approved building projects. The list includes the planned $47.5 million UTC library. Eliminating the projects could save the state about $15.3 million annually in debt service. Republicans say there is contingency funding, but Democrats charge it is a smokescreen.

n Taxes: Republicans have rejected Gov. Bredesen's call for raising $2 million through user taxes on cable boxes and another $6 million by raising taxes paid by businesses for telephone service to the same level as those paid by residential users. But Republicans accepted other tax increases, including raising HMO premium taxes from 2 percent to 5.5 percent, which will generate an additional $136 million for TennCare. They also accepted a Bredesen proposal to transfer collection of business gross receipts taxes from county clerks to the state, generating an additional $21 million for the state and $25 million for counties through greater efficiency.

n Bridge bonds: Republicans' budget version rejects the governor's call to issue $350 million bonds, backed by a federal revenue stream, for bridge repair and replacement.

n Prekindergarden programs: Republicans have disagreed with Gov. Bredesen's effort to shift existing lottery funding for pre-k to recurring general fund revenues. If that happens, the governor said he may veto the budget.