Harwell Forecasts Cuts to Budget, Business Regulations in 2012

With four months to go before she gavels the House of Representatives back into session, Speaker Beth Harwell says she expects the Legislature to spend next year reining in the state budget and easing regulations on small businesses.

Earlier this week, the Haslam administration finished drafting a contingency plan of $4.5 billion in budget cuts the state could make if federal funds to Tennessee were reduced by as much as 30 percent.

“They’re never pleasant. I don’t want to see them come, but everybody’s got to step up to the plate,” said Harwell, R-Nashville. “They do give us that opportunity to take a critical look at what we’re doing with our money, with the taxpayers’ money.”

Gov. Bill Haslam will use the contingency plan to make the case to the three major credit bureaus that the state can weather federal budget reductions and should keep a high bond rating.

The plan outlines scenarios for 15 percent and 30 percent reductions in federal funding. A Congressional “super committee” is brainstorming ways to save $1.2 trillion over 10 years, with a deadline of Nov. 23.

The state’s contingency plan “will give us some idea of what we could rein back in,” Harwell said, although she added she does not have any specific cuts above and beyond the anticipated federal reductions in mind.

Hal Rounds, an active member of the Tea Party movement, says reductions are a great idea, but the state should be careful to ween itself off of current spending.

“Whenever you cut spending, somebody was getting that money, and that’s going to hurt some people,” said Rounds, who lives in Fayette County. “You can’t just assassinate what things are being spent on.”

The Legislature is also expected to focus on rolling back unnecessary or duplicative government regulations that hamper operations or the possibility of job-creation at small businesses — a recurring theme at the governor’s roundtable chats with business leaders. State officials are also expecting Congressional hearings on federal regulations to be held in Tennessee later this year.

The Haslam administration hopes to finalize a list of business regulations to target later this fall. Last week Haslam said it was too early to say what would make the list, but that he’s heard a lot of complaints about the state’s regulations on worker’s compensation.

Harwell, who leaned on the governor’s goal of making the state the best in the Southeast for high-quality jobs, said reducing regulations needs to be part of that effort.

“I think this Legislature is dedicated to reviewing what regulations we currently have in place on our small businesses to make sure that all of them are absolutely necessary,” Harwell said.