NASHVILLE - House and Senate leaders said Wednesday they struck an agreement on the state's $29.6 billion spending plan for 2009-2010 that slashes recurring state expenditures but uses bonds to meet higher education construction commitments such as the new UTC library.
The state-funded portion of the budget, including items such as federal spending, would drop from $13.5 billion in the 2009 budget, which ends June 30, to $12.1 billion in the budget that begins July 1, according to Bredesen administration officials.
"I think it's pretty locked in," said Sen. Andy Berke, D-Chattanooga, of the deal. "We're passing for the most part the governor's budget. I'm pleased we were able to include a lot of projects like the UTC library which will bring the jobs of today and tomorrow to the district and the state."
Rep. Gerald McCormick, R-Chattanooga, agreed, saying, "there has been a deal struck on the budget that would protect the UTC library, and the Volkswagen supplier training funds are not in danger. I think we've been reassured that's OK."
The Republican-controlled Senate earlier had refused to go along with bonding the higher education projects. That drew concerns from UTC Chancellor Roger Brown, who said it would generate 600 jobs. Hamilton County Commission members passed a resolution urging local lawmakers to support funding.
Lawmakers planned to have the budget on the House and Senate floors late Wednesday night and believed they had the votes for passage, barring unforeseen circumstances. But before taking up the budget, the House and Senate continued to fight over other issues.
Members hope to conclude their annual session today.
Regarding the budget deal, lawmakers said they resolved a dispute over Gov. Phil Bredesen's plan to issue $350 million in bonds for 200 bridge projects. Bond issuance would phased in over four years, depending on available federal funding.
Meanwhile, Gov. Bredesen would be required to slash programs by another $55 million if state revenues continue to fall. Senators insisted on the provision.
"We are requiring the governor to make up to $55 million in cuts if we don't meet our revenue projections that were given to us June 3," Lt. Gov. Ron Ramsey, R-Blountville, the Senate speaker, said.
House Republican Caucus Chairman Glen Casada of College Grove called the reductions "just good budgeting."
He called the agreement a "compromise I know the state Senate will be happy with." He noted the plan will provide an additional $4.5 million to the Department of Children's Services and $5.5 million to offset planned reductions in mental health community services funding.
Yet another agreement, insisted upon by the House, goes along with Democrat Bredesen's plan to fully fund pre-kindergarden funding out of recurring general fund expenditures. Senators had opposed that.
Earlier Tuesday, the House approved a major bill changing various laws and also providing the state an additional $136.5 million through increasing the state's 2 percent tax on HMO premiums to 5.5 percent. Total new revenues from tax increases or more efficient tax collections total about $240 million, Finance Commissioner Dave Goetz said.
Commissioner Goetz said the budget envisions cutting $750 million in recurring funding in programs over the course of fiscal year 2010 but envisions using some $520 million stimulus funds to provide a "soft landing" so the cuts won't have to be made immediately.
The budget also uses some of the state's "rainy day" fund to cover shortfalls in the current budget year and into next year as well.
Commissioner Goetz said the $29.6 billion budget would be $2.2 billion less without the influx of federal stimulus funds.