More Revenues Means More Spending

Gov. Bill Haslam said Tuesday his conversations with legislators “have been very positive” regarding his budget proposal that will be addressed head-on in the next few days.

Haslam, capitalizing on a recent increase in revenues, unveiled an amendment this week to his original $30.2 billion budget plan announced in March. It includes $71.3 million in disaster relief funds after recent storms and flooding.

The state recently announced net positive growth of 1.7 percent in revenue over last year for April, taking in $1.264 billion, which was $600,000 more than budgeted. It was the 13th consecutive month of positive growth.

Based on new estimates of increased revenues, Haslam has filed a supplemental appropriations amendment that includes the disaster relief and restored funds for various health-related programs.

“Everybody likes it when you can spend more. We were going to have to make some cuts, particularly some of the TennCare cuts. None of us liked it. I didn’t like the mental health cuts myself,” Haslam said Tuesday. “So having the extra money, almost everyone is going to see that as a good thing.”

The funding priorities in the amendment listed by the administration include:

  • $4.7 million for the Department of Intellectual Disabilities Services restoring residential rates.
  • $1.9 million for mental health services for Northeast Tennessee through the Mountain State Health Alliance.
  • $8.5 million to restore rate reductions for TennCare mental health providers.
  • $5 million for the Memphis Regional Medical Center, Nashville General Hospital and Jellico Community Hospital.
  • $3.5 million for smoking cessation help in TennCare.
  • $6.9 million for programs at Meharry Medical College.
  • $220,000 for debt service on construction bonds for a $22.6 million, 108-bed state veterans’ home in Clarksville.

Haslam said Tuesday he believes an approach of being open about funding has been beneficial.

“I think the fact we’ve been up front all along with, ‘Here’s the money we have,’ when the extra money came in, we were very specific about what it was and what we were going to spend it on,” he said.

Haslam said the biggest financial surprise handed the state was money owed to Tennessee from the federal Centers for Medicare and Medicaid services.

The amendment anticipates reimbursement of roughly $82 million in Medicaid funding errors. It is projected to cover $15.7 million for nursing home funding; $7.9 million for TennCare services including lab, X-ray, dental and transportation services; and $3.4 million for home health provider services. Meanwhile, $15.9 million for capital outlays in higher education are expected.

Other priorities in the budget amendment listed by the administration are $19 million for lottery scholarships in summer school; $5 million for the University of Memphis to operate the Lambuth campus in Jackson; $21 million for building maintenance; and $16.5 million for what the administration calls “a potential major economic development expansion project,” without elaboration.

Haslam reiterated warnings this week, however, about non-recurring funds, saying the budget includes $160 million in non-recurring money that will not be available next year.