Gov. Phil Bredesen has laid his proposed budget on the table for the 2010-2011 fiscal year and now its up to state legislators to pass, tweak or overhaul it.

Monroe County's state senator, Randy McNally, R-Oak Ridge, serves as chairman of the powerful Senate Finance, Ways and Means Committee.

At this point, McNally thinks relatively modest modifications to the governor's budget may be the order of the day by the time the state House and Senate act on the budget later this spring.
"I don't think we will overhaul it," the veteran state senator said.

The decline in the state's revenue during the national recession has been well documented and there are no painless solutions to come up with a balanced budget as required by the state's constitution, many state lawmakers concede.

"It's certainly the most difficult year any of us can ever remember," McNally said.
The governor's budget, proposed during his State of the State address made last week to the 106th General Assembly, calls for the use of $277 million of the state's $900 million "rainy-day" or reserve funds while making major cuts in the TennCare program and cuts in state departments.

"It's nothing more than the common-sense principle that we're going to adjust our expenses to match our income, and we're going to be very careful about using money from our savings account so we can keep it healthy," Bredesen said. "It's the way sensible families are managing through these tough times, and while the numbers for state government are much larger, the principle is exactly the same."

McNally acknowledges the poor economy makes dipping into reserve funds a necessity, however he said the proposed $277 million draw down is likely the biggest dip into the reserve funds he could support.

McNally said you never know when disasters could strike and he wants funds on hand for future years.

Bredesen's proposed budget calls for the elimination of more than 1,800 state positions, however the number of actual layoffs could be less than 400 people.
But the governor also calls for giving state employees a one-time 3 percent bonus, since they haven't had a raise in three years.

The use of reserves will minimize some of the cuts that were proposed for state departments including Education, Health, Mental Health, and Children's Services, the governor said. Bredesen also proposes using reserve funds to preserve 394 state jobs that would have been eliminated as a result of the tough economy.

Bredesen said his proposed budget fully funds the Basic Education Plan, the state's funding formula for education, and the increased contribution to the state's pension system recommended by actuaries and adopted by the treasurer. Outside of those areas, the budget reflects reductions of about 9 percent in most departments.

The budgets of Higher Education, Mental Health and Developmental Disabilities, and the Division of Intellectual Disabilities have reductions of 6 percent, Children's Services is at 5 percent, and the Department of Correction is just 1 percent, the governor said.

The governor's proposed $28.4 billion budget for the fiscal year beginning July 1 does not call for an income tax or sales tax increase, but it does call for an increase in fees for drivers licenses and a new cable TV tax.
The fee for drivers licenses would increase from $19.50 for five years to $46 for eight years under the governor's plan.

According to published reports, the governor has asked to remove the sales tax exemption on the first $15 on cable TV bills.
Bredesen said the move is only fair and equalizes the playing field with satellite companies, which already have the tax.

Bredesen's drivers license fee increase and cable tax is designed to raise $50 million in revenue to go toward high education and saving prosecutors, public defenders, probation officers and weather forecasters from significant layoffs.

But many Republicans have come out against any new fees and taxes during a slow economy and McNally said the fees and taxes could well be a major sticking point.
Bredesen's 2010 State of the State Address and materials related to the proposed budget can be found at www.TN.gov.

tommy.millsaps@advocateanddemocrat. c om | 337-7101