 |
|
|
|
Rainy Day Fund Could Aid Budget Governor says size of shortfall doesn't require tapping reserves
While Tennessee officials talk about how to plug a large hole in this year's budget, the state continues to accumulate money in a rainy day fund set aside for just such a problem. The state is expected to end up as much as $240
million short in the general fund by the end of the fiscal year on June
30 because of lagging sales, business and cigarette taxes. Gov. Phil Bredesen and several state legislators say they don't want to tap into the fund this year because the size of the budget shortfall doesn't require such a step, although some aren't so sure. "We're going to have something of a shortfall this year, which I think we can easily accommodate,'' Bredesen said this week. "I'm not worried about this year. Next year will be tight."
Bredesen said he was working on a belt-tightening plan to get the state through the year without dipping into reserves. The state Division of Mental Retardation Services earlier this month began taking steps to trim spending. Contract agencies were told the state would cut payments by 5.7 percent for services agencies provided in October. "That is going to bear close scrutiny because those programs are important,'' said Senate Republican Leader Mark Norris of Collierville. "Some people may think they are easy to pick on, but those people can't get lost in the shuffle." Trimming programs might not be enough to prevent dipping into reserves, said House Majority Leader Gary Odom, D-Nashville. "I think that's a possibility,'' Odom said. "I know the governor doesn't want to do that, but he is going to have to impound money if that's not the case to get through this year, depending on how the revenue continues to come in." 'Pork' draws some blame Some say the state would not be in this fix if the governor and legislators hadn't spent so much of the surplus in June when they were finalizing the budget. "Rather than spending responsibly, they spent it like drunken sailors,'' said Drew Johnson, president of the Tennessee Center for Policy Research, a conservative think tank. "That's the reason there is a shortfall today, because of fiscal irresponsibility. Johnson pointed to $20 million that legislators set aside for projects around the state, "exorbitant" raises Bredesen recommended for top state officials, and renovations and additions at the governor's mansion as examples of needless "pork." "The entire budget is filled with wasteful spending, from state-owned golf courses to TennCare fraud,'' Johnson said. "Before we either raise taxes or drain the rainy day fund, the governor and legislators need to look seriously at the wasteful spending that's rampant in the budget." States other than Tennessee are having similar problems that have been caused by an unanticipated slowdown in tax receipts, said Jordan Head, a policy associate with the National Association of State Budget Officers. About 15 states are showing budget shortfalls this year, she said, largely from lagging sales tax collections caused by general cooling of the economy. "It's kind of off all over,'' she said. "There is not really a regional pattern or geographic pattern." |
