Guest editorial: State must face the financial truth

On November 13, 2009, in News 2009, by Mark Norris

Tennessean.com By Mark Norris State Senate Majority Leader November 13, 2009 Other Views The governor begins his annual administrative budget hearings next week. Whether his last soiree through the state’s beleaguered books will be a cursory review or will, instead, face the truth and realistically deal with the challenges Tennesseans face remains to be seen. […]

Tennessean.com
By Mark Norris
State Senate Majority Leader
November 13, 2009

Other Views

The governor begins his annual administrative budget hearings next week. Whether his last soiree through the state’s beleaguered books will be a cursory review or will, instead, face the truth and realistically deal with the challenges Tennesseans face remains to be seen.

Earlier this year, Senate Republicans tried to proceed with budget cuts in a responsible way based upon the forecast decline in revenue. We called it the Truth or Consequences budget. We thought it best to face the truth — that Tennessee was enduring the worst economic downturn in modern history — and brace against the consequences of continuing to borrow and spend. We built in a contingency. If the governor’s forecast of revenue growth failed to materialize, we would accelerate cuts the governor himself had identified, but deferred, in hopes the economy would improve. This angered the governor so much that he resorted to calling Republicans “stupid.”

The governor preferred to ignore what everyone knew: that revenue would continue to decline. By projecting revenue growth of about 1 percent in the new fiscal year beginning July 1, the governor delayed the inevitable. He implemented what he called his “cash preservation plan” — to save cash by borrowing more. As a result, the state’s debt service — the interest on what we have borrowed — has nearly doubled from $167.9 million to $319 million annually. And he used non-recurring federal stimulus money to pay recurring obligations.

Cuts were inevitable

The moment of truth has arrived, and it is time to face the consequences. The facts are these: Tennessee has now had 17 consecutive months of declining revenue in the worst economic downturn in modern history. Tennessee was $1.2 billion in the red a year ago, and it is going to be worse in 2010. With $227 million in cuts already made, $526 million in more cuts on paper but postponed at the governor’s insistence, another $350 million in additional cuts will likely be necessary just to balance our books. In Tennessee, unlike Washington, we are required to balance our books every year.

Democrats have a way of suspending disbelief. They knew the truth and didn’t believe revenue would increase to meet the governor’s budget any more than Republicans did. But they found it more politically expedient to mislead the public than deal with reality.

Tennesseans suspended disbelief because the governor said it was “stupid” not to. The media was complicit. When organizations like Vanderbilt’s Poison Control Center confronted the reality that funding would eventually be cut even under Bredesen’s budget, they blamed Republicans — not Bredesen. When the human resource agencies were told they, too, would ultimately be cut under Bredesen’s budget, they indignantly demanded copies of it because “no one ever told them that.” When medical schools were told the cuts were not a matter of “if” but “when,” they said Bredesen’s budget would protect them.

It has not protected them. Delaying the inevitable gave many a false sense of security, which may have done more harm than good. We amended the final budget to require the administration to notify each recipient of state funds in writing that cuts were coming.

To date, this, too, has not been done.

Page 1 of 212