NASHVILLE — The Bredesen administration will need to make at least $75 million more in cuts to its proposed 2010-11 budget, Finance Commissioner Dave Goetz said Monday.
The figures are based on a best-case scenario of revenue losses under a range of estimates adopted earlier in the day by the State Funding Board.
Mr. Goetz said he also anticipates another $25 million budget blow as a result of flagging cigarette sales, bringing the total additional losses to $100 million.
“We are continuing to lose money. Now we’ll have to figure out how to propose $75 million in additional reductions in a very tough budget to begin with,” he said. “And that’s at a minimum, at the most optimistic end of the range. That’s going to be a hard thing to do.”
PDF: Recommendations adopted by the State Funding Board GENERAL FUND REVENUE ESTIMATES* Best case FY 2010 — -1.78 percent* Worst case FY 2010 — -2.31 percent* Worst case FY 2011 — + 2.05 percent* Best case FY 2011 — + 2.3 percentSource: State Funding Board
Mr. Goetz said it is too early to say whether more employee layoffs will be needed. Last week, the Bredesen administration began mailing 853 layoff notices to state employees, although officials note that many are for business reasons unrelated to the recent recession’s impact on state revenues.
Things could be worse: Under the State Funding Board’s worst-case revenue scenario adopted Monday, the state would be faced with trimming the budget by another $140 million, Mr. Goetz said.
That is on top of $150 million the state anticipates cutting.
Earlier in the day, Mr. Goetz and the three other State Funding Board members met and quickly agreed on revenue growth and loss figures.
“It’s our best guess where we’ll be,” state Comptroller Justin Wilson said.
Losses in the general fund, which provides money for most functions of state government such as education, are projected at -1.78 percent to -2.31 percent in the current fiscal year. In the new budget that begins July 1, revenues are projected to grow at from 2.05 percent to 2.3 percent.
Under the rosiest of scenarios, the general fund would be $8.364 billion by June 30, 2011. Under the worst-case scenario, it would be $8.29 billion.
Mr. Goetz said that in the 2010 budget that ends June 30 the general fund shortfall will grow to about $77 million, and tobacco tax losses will be about $20 million in the current budget that ends June 30.
Because it is so late in the 2010 fiscal year, about $100 million from the state’s Rainy Day reserve fund “in all likelihood” would be used to plug the hole, he said. The state’s Rainy Day contingency fund previously was projected to be about $530 million on July 1. Other reserves in areas such as TennCare bring the total to about $900 million, he said.