Health Care NewsTracker Tax and Budget

Health Department Offers Up 7% Budget Reduction

Some Tennessee state government agency bosses are approaching Gov. Bill Haslam’s budget hearings with the idea of grabbing at additional handouts beyond what he’s indicated the state may be able to afford.

But the Department of Health is offering instead to lend Haslam a hand as he grapples with fiscal uncertainty.

The agency is offering to hand back $40 million if budget realities require it, Health Commissioner John Dreyzehner told the governor during a hearing last week.

“While we fervently wish these reductions were not necessary to propose, our economy and lack of further sources of non-recurring funds suggest regrettably that they are,” Dreyzehner said.

Dreyzehner’s office is suggesting scaling the department’s current $566 million budget back 7 percent next year.

The bulk of the cuts, about $25 million, would come from a drop-off of federal and state one-time funding for programs such as those that address shaken baby syndrome, epilepsy, diabetes, smoking cessation, and breast and cervical cancer.

The rest would be made by eliminating unfilled positions, shifting around state and federal dollars and chipping away costs in other programs.

Dreyzehner said these cuts would pose the “least impact” but contends continuing to encourage Tennesseans to live healthy lifestyles with fewer funds will be more challenging.

What’s still unknown is exactly what kind of cuts may come from Washington. At this point, state officials have based the Health budget on an assumption of $242 million in federal funds, comprising a little less than half the overall budget.

Earlier this year, the agency along with the rest of the state’s departments prepared contingency plans for up to 30 percent cuts in federal funds.

Haslam said he anticipated significant cuts in the Health Department as the one-time funds expire.

“We’re relying on a lot of one-time money, and we kind of all saw this cliff coming, or whatever you want to call it, but the reality’s now upon us,” the governor said at the conclusion of the hearing.

“Some of these are more painful than others, and our pledge to you is we’re going to work to do what we can to minimize that,” he told the commissioner.

The governor expects to bridge a $400 million budget gap this year as expenses in education, pensions and other programs outpace revenue growth. He is expected to present a roughly $31 billion budget plan early next year.

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