State to cut 2,000 jobs

On May 8, 2008, in News 2008, by Mark Norris

Bredesen to offer voluntary buyouts

By ERIK SCHELZIG • Associated Press •
May 8, 2008

NASHVILLE — Gov. Phil Bredesen on Wednesday announced Tennessee will eliminate more than 2,000 state jobs, or 5 percent of the work force, as part of an effort to shore up the state’s budget.

Bredesen, a Democrat, said he will begin offering voluntary buyout packages in June in an effort to eliminate 2,011 jobs. If not enough workers take up the offer, involuntary cuts will follow.

Bredesen, who said the cuts are necessary because of the severity of the state’s budget outlook, acknowledged that large staffing cuts are unusual in state government.

But “most companies — if they could get through it with a 5 percent reduction in the work force — would consider themselves lucky indeed,” he said.

Bredesen ran a publicly traded company before entering politics and has often espoused a businesslike approach to running state government.

Officials with the Tennessee State Employees Association praised the decision to make the buyouts voluntary.

Making the cuts voluntary will help avoid a need to navigate the state’s complicated civil service rules for laying off workers. Bredesen said the buyouts will cost the state “tens of millions of dollars” and the amount for each worker will likely be based on how many years of service he or she has.

“We’re going to do this in a way that is respectful of them and try to minimize the impact on any employee,” Bredesen said.

Bredesen will present a more detailed revision of the state’s budget plan in an address to lawmakers on Monday. He says the new plan will assume a budget shortfall of $468 million, but that he will propose no new taxes to bridge the funding gap.

“We need to be prepared for some lean times ahead,” Bredesen said. “Realistically we are not at the bottom of this yet, and fundamentals continue to deteriorate.”

Other cuts will include no new pre-kindergarten classrooms. He also said money from the new cigarette tax hike won’t be used to increase the funding formula for schools.

Plans to expand eligibility for TennCare will also need to be scaled back, Bredesen said. The governor in 2005 cut more than 170,000 adults from the state’s expanded Medicaid program amid escalating costs.

The staffing reductions will represent a savings of about $64 million in state money each year, Bredesen said.

State Finance Commissioner Dave Goetz said the buyouts will target the 6,000 or so state employees with at least 30 years of service.

“It’s going to be harsh no matter how you do it,” Goetz acknowledged.

Critics have said the state’s $750 million “rainy day” reserves should be tapped to keep the layoffs from happening.

“I think if we were smart, that we would use the reserve funds to plug the gap for at least a year, and do what’s best for employees,” said Rep. Mike Turner, D-Old Hickory. “We may be able to save some jobs. We’re about to put some people out on the street, and they have families.”

But Bredesen said he’s against that move for fear that the budget picture could get worse in following budget year.

Bredesen’s buyout proposal is drawing bipartisan support.

“He’s presented it as an absolute necessity,” said Senate Republican Leader Mark Norris, of Collierville. “The voluntary buyout provision is what makes it somewhat less painful.”

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