The first big issue has surfaced in our Tennessee governor’s race between Republican Bill Haslam and Democrat Mike McWherter. That issue is state finances, and it came up in their first debate last week.
The next governor will have difficult leadership decisions on “taxing and spending.”
GOP candidate Haslam had a significant financial warning: “We have a billion and a half dollars that was in this year’s budget that won’t be available for the next governor.”
Democrat McWherter tried to minimize the problem: “You know, Bill wants to terrify you into thinking our budget is going to be in a huge hole once the federal stimulus runs out.”
Senate Minority Leader Jim Kyle – a Democrat – said, “I would say it is an overstatement to claim doom and gloom, but I think it’s also optimistic to claim that everything is fine.”
Senate Finance Committee Chairman Randy McNally – a Republican – said falling revenue and various obligations created a $1.5 billion “shortfall” in Tennessee’s nearly $30 billion budget. “We’ve addressed that through cuts,” he said – but he noted there is still a deficit of $185 million to face the next few years.
So here we have four views.
Adding to the puzzle is the fact that we don’t know where the economy is going.
Will there be economic growth that will ease the problem? Or will the recession continue, or even get worse, increasing the size of the problem?
No one knows for sure how much tax revenue will come in, or how much less money there may be.
Fortunately, we don’t hear any responsible voice calling for higher state taxes.
The General Assembly’s Office of Legislative Budget Analysis has reported that Tennessee revenue has fallen $1.2 billion over the past two years.
What will happen during the administration of the next governor?
It should be evident that the next governor – and Tennessee’s taxpayers – will be facing some difficult and very sensitive economic decisions.
It is easy for a political leader to manage financial affairs when economic boom produces lots of “easy” tax money coming in. It is very difficult for any political executive when money is short.
We are going to need a practical, responsible governor to deal with Tennessee’s financial challenges when he takes office in January.
We believe Haslam, who has had realistic governmental and financial experience as mayor of Knoxville and in the private sector, is better equipped to be governor of Tennessee in difficult economic times.