Don’t get cold feet on cutting budget

On May 18, 2010, in News 2010, by Mark Norris

By Senate Majority Leader Mark Norris, Tennessean.com May 18, 2010 Balancing Tennessee’s annual budget is more of an art than a science. Doing so, while nurturing a fledgling economic recovery, demands discipline and determination. It takes discipline to stick with the four-year plan presented by the governor and passed by the General Assembly last year […]

By Senate Majority Leader Mark Norris, Tennessean.com
May 18, 2010

Balancing Tennessee’s annual budget is more of an art than a science. Doing so, while nurturing a fledgling economic recovery, demands discipline and determination. It takes discipline to stick with the four-year plan presented by the governor and passed by the General Assembly last year and the determination to balance our budget without raising taxes.

This year, during his State of the State address, the governor urged us to stay the course. “We have a good plan,” he said, “and I think it is important that we stick with it and not get our heads turned by the possibility of more one-time money.” He likened it to “the way sensible families have to manage through these times.”

Despite this admonition, last Thursday, the commissioner of finance and other administration officials rolled out a revised budget that does not “stick with” the plan. It raises the sales tax, taxes cable television subscribers and increases your driver’s license renewal fee by almost 50 percent. It fails to fully fund education and reflects the termination of more state employees.

Strangely, despite the elimination of more than 2,000 state jobs, the budget includes a 3 percent bonus for remaining state employees totaling $160 million. Given the recent natural disaster, could this sum not be better spent, if at all, on the recovery? For example, a one-time match for disaster relief could help local officials avoid city and county tax hikes.

Republicans preferred the original plan, or something closer to it. Giving state employees a bonus now, when many state workers and Tennesseans in the private sector are unemployed, seems unrealistic.

It’s no time to raise taxes

Unemployment is widespread in Tennessee, running up to 20 percent in some counties. There are not many privatesector industries or small businesses that haven’t felt the impact of the economic downturn. Whether it is closures, layoffs, pay cuts or other tough measures, businesses have made the necessary, but never easy, changes to try and stay afloat.

In March, The Tennessean reported that personal income in Tennessee had fallen for the first time in more than 60 years: “Tennesseans saw their personal incomes slide lower in 2009 for the first time in 60 years, a reflection of lost jobs and companies taking cost-containment measures such as furloughs and salary cuts.”

Is this really the time to raise taxes? To tax Tennesseans at their television sets? To give bonuses to state employees? What kind of family budgets like that?

Last week, Senate Finance Chairman Randy McNally presented for discussion an alternative proposal backed by Republicans designed to offset the governor’s tax increases by cutting spending rather than raising taxes. Although it cancels the state employee bonus, the plan does not include massive layoffs or sweeping pay cuts for state employees. This is not unprecedented. During the recession of the early 1990s, even Democratic Gov. Ned McWherter put pay raises for state employees on hold for four years.

The Republican proposal continues funding essential educational and safety programs and cuts the deficit between recurring and non-recurring dollars by more than half — still well within the spending plan adopted last year and originally advocated by the governor. It is a disciplined approach to economic recovery.

Unlike many other states, Tennessee has resisted the temptation to spend beyond its means. If we are to continue to be fiscally responsible, we must be determined to stay the course. Saying no isn’t always easy, but it is often necessary.

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