By Chas Sisk
The Tennessean
Tennessee is preparing to cut its budget by $45 million to $160 million next year under plans being put together by the outgoing administration of Gov. Phil Bredesen.
In the first step toward writing the state budget for the year that starts in July, Finance and Administration Commissioner Dave Goetz has asked state agencies to trim their spending plans by 1 percent to 3 percent. The cuts will be needed even though the state expects a rebound in tax collections, Goetz said.
The new cuts would be far smaller than the 9 percent reductions for some departments in this year’s budget. The reductions are needed because the state Legislature failed to approve new taxes and fees called for in the administration’s budget proposal for this year, Goetz said.
The Legislature approved a state budget this summer of $29.9 billion for the fiscal year that ends June 30, of which $12.8 billion was covered with state tax dollars.
In a letter to department heads sent late last month, Goetz estimated that the state’s revenue would grow by about 4.5 percent in the fiscal year that starts July 1. But that still will leave the state short of its spending obligations by about $45 million.
The state could fall shorter still if revenue grows less than projected. Growth of just 3.5 percent would leave it $160 million in the hole, Goetz said.
Contact Chas Sisk at 615-259-8283 or csisk@ tennessean.com.