By Associated Press,
February 28, 2010

NASHVILLE — Tennessee Republican lawmakers are taking Gov. Phil Bredesen up on his challenge to find other ways to fund higher education and save 200 state employees’ jobs.

Earlier this month, the Democratic governor told lawmakers to approve his plan to eliminate a tax exemption on cable bills or find another means of funding.

The proposal to lift the tax break on the first $15 of a cable bill is part of Bredesen’s plan to raise about $49 million in new revenue a year. The state is being sued by the satellite TV industry because it doesn’t get the kind of tax break that cable does.

Prosecutors, public defenders, foresters and probation and parole officers could lose their jobs if state leaders can’t come up with more revenue. About $32 million of the proposed new revenue would go toward higher education, and the rest would be used to preserve the jobs.

Senate Majority Leader Mark Norris said a number of options are being tossed about, but he said one involves possibly reducing some of the debt the state authorized for capital projects. The Collierville Republican said the total interest on all the debt authorized last year was about $160 million, but he said state officials “authorized a lot more than they have used.”

“I’ve continued to work … to see how much debt has been authorized but never issued,” Norris said. “By canceling some of that old debt, we can free up some of the reserves by law we’ve been required to set aside, and thereby free up cash.”

He said he’s not sure exactly how much that would be, but estimates “several tens of millions” of dollars.

Democratic Sen. Lowe Finney of Jackson said he’s open to looking at different proposals, but Norris’ concerns him because it may adversely affect the state’s credit rating.

“It’s hard to say exactly whether or not that would be a good move,” Finney said.

In addition to Norris’ plan, House Republican Caucus Chairman Glen Casada of Franklin said his colleagues have found a couple of places for possible increased revenue.

One proposal would generate about $3 million by billing the federal government for “health services provided in our education” through the Department of Education instead of the Department of Health. He said another option could generate several more million by tweaking the way the state collects property tax sales.

“There are some hard choices to make,” said Casada, adding that House Republicans plan to provide more details about their funding proposals this week.

But fellow Republican Rep. Stacey Campfield of Knoxville said on his blog that there may not be a political will to fight the governor on the budget in an election year.

“So far it seems the general consensus is to pass the budget, blame the governor, go home and campaign,” he said.

While some Republicans look for alternate means of funding, many Democrats are searching for ways to mitigate some of the severe cuts Bredesen has proposed to TennCare, the state’s expanded Medicaid program that covers about 1.2 million enrollees.

The governor has said he needs to cut $201 million from TennCare to balance the state budget. The proposed cuts include capping many TennCare recipients’ annual benefits at $10,000 and limiting them to eight outpatient procedures.

“We cannot afford to ignore these issues,” said Rep. John Deberry, D-Memphis. “When it comes to health issues, we have to intervene.”

TennCare officials said last week that some of the deepest cuts may be averted because of a recent decision by the Centers for Medicare and Medicaid Services could allow the state save some $120 million in reimbursements it makes to the federal government for prescription drug benefits.

House Minority Leader Gary Odom, a frequent critic of the administration on health care issues, said he believes whatever is necessary needs to be done to “protect our most vulnerable citizens,” which may mean dipping into the state’s cash reserves. Between the rainy day fund and TennCare reserves, there’s currently about $900 million available.

“To me, it makes no sense to make those kinds of hard judgments when you’ve got money in the bank,” said the Nashville Democrat.

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