Legislature Unanimously Approves State Budget

The Senate passed a $30.8 billion budget on Saturday, making it a clean sweep in the Tennessee General Assembly, with both chambers unanimously approving a budget that could have easily been a contentious battle given the state’s economic constraints.

The House approved the budget 96-0 on Friday.

Republican Gov. Bill Haslam and lawmakers benefited from recent revenue increases that allowed Haslam to restore many cuts that mattered most to Democrats, and in the end the bill was still roughly 3.9 percent less than the previous year’s budget. The state is constitutionally obligated to pass a balanced budget.

Haslam, in his first year as governor, had stated relentlessly during his campaign that the state was going to suffer massive losses of federal economic stimulus money, and his estimates on that count proved fairly accurate. All told, the state will have about $1.8 billion less in federal funds than a year ago, and of that total about $1.4 billion was attributed to the loss of stimulus funds.

There is no tax increase in the budget, although it includes a hospital assessment fee of $449 million meant to draw down double that amount in federal funds.

The most problematic issue between the House and Senate had been the Senate’s reluctance to extend unemployment benefits another 20 weeks for about 28,000 people. But the extensions prevailed in the Senate on Saturday, after leadership reached an agreement on Friday with Haslam’s involvement.

The administration’s budget outline is based on a revenue growth rate estimated at 3.7 percent for the fiscal year that begins July 1 and projects revenue growth of 4.5 percent for 2012-13 and 5 percent for each of the following two years.

Those projections are in stark contrast to the revenue patterns in the last term of Democratic Gov. Phil Bredesen. The state’s revenue figures at one point had reached 22 consecutive months of negative growth in sales tax collections during the nation’s economic downturn.

The recent rebound enticed Haslam to submit an amendment to his original budget presentation from March. The added revenues allowed for devoting $71 million for disaster relief following recent storms in the state, $8.5 million to restore cuts to mental health providers in TennCare and millions more to restore other health care cuts.

Haslam was also able to budget for reimbursement of about $82 million in federal funding errors that affected TennCare, the state’s Medicaid program.

The budget, SB2090/HB2139, includes a 1.6 percent increase in pay for state employees.

One notable cut that stands is the elimination of the local planning division in the state Department of Economic and Community Development.

Democrats expressed their appreciation for many of the restorations to the budget bill.

“I must say, I’m very pleased with the bill,” said Rep. Craig Fitzhugh, D-Ripley, the House Democratic leader.

“We applaud the majority party for the budget and the governor for the proposal of it and for acceding to our requests on a lot of different things.”

Fitzhugh especially noted his appreciation for restoration of TennCare funding and the extended benefits for unemployment, which will cost the state about $3.1 million to draw down about $60 million at the federal level.

Fitzhugh said the budget is actually bigger than last year but doesn’t appear so because of the lack of stimulus money.

Lt. Gov. Ron Ramsey said it was the first time in his memory a budget had passed unanimously.

“I’d like to congratulate Governor Haslam,” said Ramsey, who ran against Haslam in the Republican primary last year. “He did a good job of presenting this budget, and I think it took care of most of the problems.

“And we tried to include those across the aisle in our discussions.”

The lack of a single vote against the budget was attention-grabbing.

“No red lights, and I take great pride in that,” said Sen. Mark Norris, R-Collierville, the Senate majority leader.

Norris, who carried the bill for Haslam in the Senate, took time on the Senate floor Saturday to thank Democrats who worked with Republicans to craft the legislation.

“It’s very inside baseball, but that’s something that has never been done in my 12 years,” Norris said after the vote. “It always sort of hurt my feelings, if you really want to know the truth. We all worked together. Even though we’ve had the majority for several years in the Senate, when the previous governor was in office they would never acknowledge our work on the budget, so I wanted to share that appreciation today, even though they have only 13 members. I appreciated the collaborative effort.

“I spent a lot of time on that budget all year long down in the basement. I’m really … I’m tickled.”

“The governor presented an excellent budget,” said Rep. Charles Sargent, R-Franklin, chairman of the House Finance Ways and Means Committee. “That was one of the highest vote counts on a budget in a long time.”

Speaker of the House Beth Harwell agreed with the call to include unemployment benefits, which will draw down the extra money.

“I think it was the right thing to do,” Harwell said. “It was money that was just sitting there. I think it was good for our state to pull it down. I think it will be spent in this state, and that’s going to produce sales tax revenue.”

The Senate vote on the benefits was 20-11.

“There was always a pretty solid level of support,” Norris said of the unemployment issue. “These are people who were employed, after all. Yes they’re unemployed now, but these are people who lost their jobs. These are former workers who are still looking to regain their worth.

“I have several counties — Lauderdale, Tipton, Dyer, Shelby — that are well above the national unemployment average, and this is sort of their last best hope.”

Norris noted the state’s commitment to helping fund economic expansion projects and portrayed the unemployment vote in that light.

“With the funding in this year’s budget for new economic development projects, it will take a little time for those projects to come on line,” Norris said. “We are helping companies expand and create new job opportunities, and I’m hopeful that these 28,000-30,000 people will be the beneficiaries of that new work. It takes time.”

Ramsey was among Republicans who voted for the extension.

“That’s one I could argue either side of,” Ramsey said. “I can see why that needed to be extended. I wish it hadn’t been, in a way. At the same time, there are those in our caucus, too, that represent those rural areas that have better than double-digit — about 20 percent — unemployment, so I understand that. People are truly looking for jobs. Do I wish we didn’t have to do this? Absolutely. But I can see both sides.”