Outlining his proposed budget before a joint session of the state’s General Assembly on Monday, Gov. Bill Haslam said Tennessee is “in a place of strength” as it emerges from the recession.
“We have a long history of fiscal restraint that crosses party lines,” said Haslam, a Republican elected to the state’s highest office in 2010. “We have been deliberate about not spending money that we don’t have and in making a concerted effort to save for the future.”
With that, the governor sketched out his plan to spend $32.7 billion dollars over the coming fiscal year, the largest budget in the state’s history. “We are well-positioned to continue to invest in a thoughtful, strategic manner,” he said.
The Haslam administration’s proposal, released earlier in the day to reporters and lawmakers before he unveiled in publicly, calls for “fully funding” education, a hefty investment in government construction projects, more money for staff and training in the state’s troubled Department of Children’s Services and inject the state’s “rainy day” reserves with $100 million by the end of the 2013-14 fiscal year.
Also included is a 1.5 percent raise for state government employees, teachers and higher education staff. The administration has plans to reduce the total size of the state government’s workforce by 299 positions, from 44,185 to 43,886.
Haslam is also asking state lawmakers to approve another round of tax cuts for Tennesseans, including further reduction in the state’s grocery tax, from 5.25 percent to 5 percent, and an increase in exemptions for seniors.
“We are proposing to cut the Hall Income Tax even further this year by raising the exemption level for people over 65 from $26,000 to $33,000 for individuals and from $37,000 to $59,000 for joint filers,” said the governor. “We are also providing tax relief for low-income seniors, veterans and the disabled by fully funding the growth of the property tax relief program.”
At the same time, the state expects to collect and additional $17 million in revenues from Tennesseans who will be paying sales tax on their online purchases from Amazon.
Haslam, who often notes that most governors tend to want to tout education as their highest priority, spent a significant portion of his speech extolling the education reforms he’s championed in the past two years, and pitching his policies for the coming year.
“We had the second largest increase in state K-12 expenditures of all 50 states in fiscal year 2012,” Haslam said. “The average increase was nearly 3 percent. Ours grew almost 12 percent in state education funding. Education is another example of how in Tennessee we’re distinguishing ourselves as different from the rest of the country.
“We are literally putting our money where our mouth is, even when other states haven’t done so through tough budget times,” Haslam continued. “Our administration’s three budgets have certainly supported our commitment to public education, but I also think it is important to note that we’re not just throwing money at it. Dollars alone don’t lead to improvement. There has to be a plan. Along with strategic investments, we’re pursuing real reform in education that is producing results.”
The governor said he’ll be supporting “another option for school choice” to add to the state’s expansion of charter schools last session in the form of a voucher or “opportunity scholarship” program that would “allow low-income students in our lowest performing schools a chance to to receive a better education.”
“I expect this proposal will be hotly debated, but after taking a careful look at the issue and how a program might work in Tennessee, I believe a limited approach that gives more choice to parents and students stuck in difficult situations makes a lot of sense,” said Haslam.
The “Tennessee Choice & Opportunity Scholarship Act” and is sponsored by Gerald McCormick and Mark Norris, Republican majority leaders in the House and Senate, respectively. It would limit eligibility to 5,000 students at first, then grow to 20,000 students by 2016.
Haslam’s budget proposes $307.3 million “capital outlay projects in higher education.” The governor also announced a new “Drive to 55” initiative aimed at raising the number of Tennesseans who go on to earn degrees of some kind after high school. “Only 32 percent of Tennesseans have earned an associates’ degree or higher. That’s not good enough,” he said. “Our goal is to move the needle so that Tennessee is on track to raise that number to 55 percent by 2025.”
The governor said health care continues to be one of the biggest challenges facing the state. TennCare is projected to cost $350 million more this year than last year, he said. “That increase takes into account the higher cost of medical care, more people who qualify for Medicaid in tough economic times, and primarily, the impact of the Affordable Care Act,” said Haslam.
Haslam didn’t say whether he will push for expanding Medicaid, which is also encouraged under Obamacare, and that he’s “hesitant to commit additional dollars to Medicaid when it’s already eating up so much of our budget, and we have to remember what the state went through seven years ago when it made the difficult decision to cut a lot of people from the TennCare rolls.” However, he didn’t close the door entirely on the prospect, either.
“Most of us in this room don’t like the Affordable Care Act, but the decision to expand Medicaid isn’t as basic as saying, ‘No ObamaCare, No expansion’,” he said. “I plan to gather all of the information possible to understand the impact on our budget, the impact on community hospitals, the impact on health care in Tennessee, and the impact on our citizens. This decision is too important not to do that.”
The governor’s budget calls for “upgrading nearly 200 case manager positions” at the children’s services department, which he said “won’t just be a matter of paying current employees more, but raising the qualifications for those positions.”
At both the end and the beginning of Haslam’s nearly 45-minute speech he contrasted the workings of the Tennessee Statehouse with the public’s perception of deep dysfunction in the nation’s capital. “Tennesseans don’t want us to be like Washington. They don’t want continuous conflict,” he said. “They do want principled problem solving.”
“People are disheartened by what happens – or it’s probably more accurate to say, what doesn’t happen – in Washington,” the governor said near the end. “Here in Tennessee, we’re willing to make the tough decisions. We’re willing to put politics aside and really focus on what’s right for our state and citizens. That makes us different, and we shouldn’t lose sight of those unique qualities.”