State Revenues Sagging as Governor Opens Budget Hearings

Gov. Bill Haslam kicked off the administration’s annual fall process of publicly discussing state agency budgets in preparation for delivering his fiscal operating proposal to the Legislature after the new year.

As in years past, the governor is asking agencies to submit scaled-back contingency proposals in addition to their full funding requests. This year Haslam said he’s directing all state departments to make a “good-faith effort” at projecting “what a five percent cut would look like.”

“The reality is with the state budget, when you look at the increases that we know about — the big drivers of that being TennCare increases and BEP increases — that basically sucks up every new dollar of revenue that we get, prior to even giving any bit of raise to a state employee, or any of the other things that we would like to do,” said the governor. “As a consequence it’s always important that we go back to every department and say, ‘Where can you take some costs out so that we have the chance to restructure things to provide for the ability to do some new things if we choose to.”

Haslam said he hasn’t yet decided what will or won’t get cut in the coming budget cycle. But he anticipates some of the program rollbacks identified by department chiefs could be “very severe in nature.”

“To cut five percent is hard,” said Haslam. “But we do that to have the discussion to see what the potentials are for us as we look at the budget.”

Haslam told reporters Tuesday that the 2014-15 cycle is shaping up to be “our hardest budget.”

The most recent estimates show lower-than-expected revenues for the state. In the first quarter of the current fiscal year government collections were $101.2 million less than the budgeted estimate. “The general fund was under collected by $96.6 million and the four other funds were under collected by $4.6 million,” according to a Tennessee Department of Finance and Administration press release issued last week.

Haslam said Tuesday, “This’ll be the first time that we don’t have our revenues exceeding our forecast. The reason that’s an issue is not only do you lose it for the existing year, but your base is smaller going into the next year, so there’s kind of a recurring effect to that. I think it’ll just make our decisions all that much harder.”

The department hearings over the next several days can be viewed here. The schedule going forward is as follows:

Wednesday, November 13, 2013

  • 9:30-10:30 a.m. Correction
  • 10:30-11:00 Tennessee Bureau of Investigation
  • 11:00-11:30 Military
  • 1:00-2:00 Safety
  • 2:00-2:30 Finance & Administration
  • 2:30-3:00 Human Resources
  • 3:30-4:30 Intellectual and Developmental Disabilities

Thursday, November 14, 2013

  • 10:00-10:30 General Services
  • 11:00-11:30 Revenue
  • 1:00-1:30 Agriculture
  • 1:30-1:40 Media availability with the governor

Friday, November 15, 2013

  • 9:00-9:30 a.m. Education Lottery
  • 9:30-10:00 Veterans Affairs
  • 10:00-10:30 Financial Institutions
  • 10:30-11:00 Labor
  • 11:00-11:30 Environment
  • 11:30-12:00 Commerce & Insurance
  • 1:00-2:00 Higher Education

Monday, November 18, 2013

  •  1:00-2:00 p.m. Children’s Services
  • 2:00-3:00 TennCare
  • 3:00-3:10 Media availability with the governor
  • 3:30-4:00 Tourism
  • 4:00-5:00 Economic & Community Development

Monday, November 25, 2013

  • 2:30-3:00 p.m. TDOT