House, Senate budget battle near

On June 15, 2009, in News 2009, by Mark Norris

Bipartisan plan largely would follow Bredesen’s suggestions on cutting

By Tom Humphrey,
June 15, 2009

NASHVILLE – Several sideshows and no small amount of political maneuvering are at play in an impending clash between the House and Senate over how far, how fast and where to shrink the budget of Tennessee state government.

If things go as loosely planned, the clash will officially commence Tuesday morning when Senate Republicans adopt what Democrats have begun calling “the stupid budget,” using an adjective Gov. Phil Bredesen first used in describing some aspects of the GOP plan.

The Republican budget bill then heads to the House, where a somewhat hostile reception apparently awaits. The House has a shaky 50-49 Republican majority if you count House Speaker Kent Williams, who is permitted to meet with the House Republican Caucus though banished from the GOP by the state party.

“That whole litany of cuts they (Senate Republicans) made didn’t make any sense to me,” said House Finance Committee Chairman Craig Fitzhugh, D-Ripley, on Friday. “It’s sort of penny-wise and pound-foolish.”

Fitzhugh said House leaders have worked on a bipartisan basis to develop an alternative plan that, in general, will follow Bredesen’s recommendations with some reductions in the cuts proposed by the governor.

That, of course, would sharply contrast with the Senate plan, which goes beyond Bredesen in making additional cuts.

The reduction in cutting, Fitzhugh said, is possible under a scenario involving fund shifting and, perhaps, use of more reserve money and even some revenue-generating measures.

He declined to provide specifics but did say that one revenue proposal advanced by Bredesen but killed in the Senate might have a chance of passage in the House.

That proposal would raise the tax paid by businesses on long-distance phone calls to 9.5 percent, the same rate now paid by residential phone customers. Increasing the business rate from the current 7.5 percent would generate an estimated $6 million.

The Bredesen budget calls for spending more than $1 billion less in the 2009-10 fiscal year, which begins July 1, than the 2008-09 budget did when adopted.

But Senate Republican Leader Mark Norris of Collierville says the governor’s plan is still based on overly optimistic projections of revenue while the GOP plan is “reality-based.”

The Republicans have retreated from a few major cuts proposed last week that some saw as a political blunder, most notably the idea of axing development of an industrial development “megasite” and solar energy generation plant in West Tennessee that would rely mostly on federal stimulus money rather than state dollars.

The GOP move triggered widespread criticism, especially among West Tennesseans who feel their region already has been shortchanged by the state in economic development. Megasites in East and Middle Tennessee have received more than $1 billion in state funding with nothing comparable, until now, in West Tennessee.

Senate Finance Committee Chairman Randy McNally, R-Oak Ridge, says the GOP plan still follows a theme of reducing expenditures on “bricks and mortar” while preserving as much money as is reasonable for programs directly impacting people.

Still, the Republicans do go beyond Bredesen in cutting social programs and other areas, at least in timing. The Bredesen budget, in effect, places a host of programs on notice that funding will be eliminated in the fiscal year beginning July 1, 2010.

The GOP plan changes about $67 million in such spending into “accelerated cuts,” making them effective July 1 of this year, although some could be restored if there is an unexpected increase in state tax collections by Aug. 31.

As a sideshow, Democrats on the Senate Finance Committee tried to fight one of the accelerated cuts – $375,000 going to support a statewide “poison control center” operated by Vanderbilt University. The center provides a toll-free phone line that people can call for quick medical advice if, for example, a child drinks a potentially hazardous substance.

A Vanderbilt spokesman said the cut amounts to about half of the center’s annual funding and, if implemented, would mean program termination. All Republicans on the panel voted to retain the cut; all Democrats voted to remove it.

Outside social programs, Economic and Community Development Commissioner Matt Kisber says the GOP plan would effectively take $5.1 million in economic incentive funding promised to the Volkswagen plant near Chattanooga and transfer it to a job-training program at Eastman Chemical in Kingsport.

Republicans dispute Kisber’s interpretation of their plan, the Chattanooga Times Free Press reported.

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