Governor Set to Unveil State Budget Proposal

Gov. Bill Haslam is scheduled to pitch his roughly $30 billion spending plan to lawmakers on Capitol Hill Monday evening. During the annual State of the State address before a joint session of the Tennessee General Assembly, the governor is expected to outline his fiscal priorities and policy vision for the coming year.

It’s unclear exactly what the governor’s budget for fiscal year 2013 will look like. But Haslam and his staff have consistently said it will include some cuts.

Lt. Gov. Ron Ramsey told reporters Thursday he doesn’t expect many surprises in Haslam’s proposed budget, which lawmakers will spend the next weeks and months delving into and fine-tuning before they adjourn to hit the campaign trail.

Ramsey warned, though, that the various government program constituencies shouldn’t get too excited by the state’s growing tax revenue.

“I think there will still be cuts in this year’s budget, but compared to what we’ve been through the last two or three years, it’ll be easier,” said Ramsey.

The state anticipates collecting about $300 million more in tax revenues next fiscal year than this year as the economy continues to recover. However, rising costs mandated by state or federal law in education, TennCare and pensions will mean roughly $500 million in additional expenses this year, according to the administration.

“Our job (in state government) is to provide the very best service that we can at the lowest price,” Gov. Haslam told civic and business leaders in Cookeville Monday. “People every day depend on the State of Tennessee to go get a driver’s license and not have to wait in line forever, to make sure that I-40 out here is safe, to make sure TennCare is provided for our most needy families.”

Over the last six months, state agencies have handed several cost-cutting proposals to the governor’s office. One plan showed how Tennessee government departments and personnel would acclimate if the feds lopped off 30 percent of their Volunteer State spending. The resulting $4.5 billion budget contraction would require state government to lay off 5,100 of its roughly 40,000 employees. That plan acted mainly as a test exercise to prove to federal bond rating agencies the state is not overly dependent on federal dollars, according to the Haslam administration.

The other budget requests, presented during a series of budget hearings around the state in November, revealed how each department would cut 5 percent from yearly spending, with many departments writing off unfilled jobs.

With the state’s financial future looking rosier now than it did when the governor asked for those cuts, Haslam has signaled he’s willing to make some fiscal moves that previously he’d said weren’t in the cards for 2012. The administration is indicating tax cuts are now a possibility — like  trimming back the food tax, which would mean the government eating up $18 million less of Tennesseans’ aggregate food purchases. Another priority for the administration is raising the exemption on the estate tax — sometimes referred to as the “death tax” — which would mean a $14 million reduction in state revenue. The governor has also suggested allocating $6 million toward anti-crime measures annually.

“We’re all just kind of sitting on pins and needles waiting to see what the governor will recommend in the budget,” Board of Regents Chancellor John Morgan told the Higher Education Commission Thursday. “We’re very hopeful that this is going to be a good year for our education budgets, which would be a very pleasant experience given the string of the last several years, which had not been so good.”

Haslam has hinted a willingness to put money in his budget to check the immigration status of people collecting government entitlements like food stamps, which would cost $5.8 million, according to a 2011 estimate.

The governor has asked each commissioner to conduct a “top to bottom” review to identify how each would rebuild their organization to find efficiencies and better determine what services state government should be providing. Whether or how the governor will build the results of those studies into state government in the next year is not known.

The governor will unveil his budget plan at 3 p.m. followed by his State of the State address at 6 p.m.

Here are stories we’ve written about state agencies’ budget proposals:

Board of Regents

Bureau of Investigation

Department of Correction

Department of Education

Department of Health

Department of Tourism

Department of Transportation

Departments of Economic and Community Development, Financial Institutions, Labor and Workforce Development, and Safety and Homeland Security

Departments of Safety and Homeland Security, Human Services, Intellectual and Developmental Disabilities, Labor and Workforce Development