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Inclusion of Funding in the Budget for Roane State Acclaimed by GOP

Press release from the Tennessee House Republican Caucus; May 1, 2012:

NASHVILLE, Tenn.—With the passage of the Fiscal Year 2012-13 budget for the State of Tennessee, lawmakers from Anderson and Roane Counties are touting their successful effort to secure vital funding for Roane State Community College’s Oak Ridge campus.

Representative John Ragan (R-Oak Ridge) said that the budget includes $1 million to finish the 3rd floor of the science technology building of the Oak Ridge campus of Roane State Community College and $500,000 for a University of Tennessee at Knoxville Forensic Science Center in Oak Ridge. Ragan said the projects were a top budget priority for the local delegation to give students access to high quality science programs in Oak Ridge.

“These funds will be used to complete a much-anticipated building, opening up new academic opportunities for more students,” said Ragan. “More and more people are recognizing the value of an education from Roane State. We are also pleased to get the Forensic Science Center which is considered among the best in the nation in that field.”

Senator Randy McNally (R—Oak Ridge) stated, “The project is very important in completing the new Allied Health and Technologies Building at our Oak Ridge campus. It will assist us in meeting the demand for health science programs which are critical to many students at this campus.”

Senator Ken Yager (R—Harriman) remarked, “The additional funding will allow the health science programs to grow and enable the college to continue to provide quality educational opportunities to students. I am pleased that we were able to amend the budget to include these much needed funds.”

Representative Julia Hurley (R—Lenoir City) concluded, “Roane State continues to prove it is a high quality institution that is committed to improving its facilities and offering top-notch educational opportunities to all individuals. I am proud to see this important funding included in the budget.”

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House Dems Unveil ‘Alternative’ Plan for State’s ‘Excess Money’

Democrats in the House of Representatives are looking to dish up a bigger slice of tax cut for Tennesseans who purchase their groceries in the state.

During a Legislative Plaza press conference Thursday, Democratic Leader Craig Fitzhugh, caucus chairman Mike Turner, D-Old Hickory, and other party members laid out a plan to put ballooning state revenues toward restoration of rations to existing government programs in addition to further reducing the state’s tax on food items.

The Democrats’ “responsible alternative” to Gov. Bill Haslam’s budget offering hinges on their calculations that the state has “over $200,000,000 in excess revenue not being accounted for in the administration’s budget.” Fitzhugh said the $200 million figure Democrats are using is based both on higher-than-expected revenue collections over the past year, and the assumption that the economy will continue improving.

“I am not saying you should spend it all, but a budget should have the plan for what you are going to do with it — if you are going to place it in the rainy-day fund, if you are saving it for a project next year, if you are going to refund it in the way of tax reductions, something,” he said. “It should have some plan attached to it — that’s the whole purpose for having a budget.”

“The economy is better, but it is certainly not out of the woods yet,” added Fitzhugh, a banker and lawyer from Ripley. “And to just sit on $200 million dollars doing nothing except earning a treasurer’s rate, which as we know is not much right now, it seems not as responsible as we could be.”

The Democrats unveiled a roughly $100 million wish list of government programs and spending they’d like to see added to the new state budget, including more money for college scholarships, community colleges, technology centers, TennCare, K-12 education and assistance programs for the disabled.

“The alternative budget is balanced; it does not use all the excess revenue available and maintains a $50,000,000 contribution to the state’s rainy day fund. The plan also calls for using cash in lieu of proposed bonds on capital outlay projects, saving taxpayers 30 percent to 40 percent in interest rates over the life of the bonds,” according to a press release issued by the House Democratic Caucus.

“It’s not just spending for the sake of spending — it is spending that we have done before,” said Fitzhugh.

And they want to phase in a full 1-penny-on-the-dollar cut in the grocery tax over the next four years.

Earlier this month the House of Representatives voted 96-0 to cut Tennessee’s tax on grocery purchases from 5.5 percent to 5.25 percent. The Senate’s version of the measure  hasn’t yet reached the chamber floor. Gov. Haslam has indicated he’s open to cutting the grocery tax further in coming years should the economy keep improving.

House GOP Caucus Chairwoman Debra Maggart said Thursday the majority party isn’t too interested on first glance in the extras Democrats say they’d like to plate up in the 2012-2013 budget.

“As usual, when additional money comes in, the first thing Democrats want to do is find new ways to spend it,” the Hendersonville Republican said through a spokesman. “While they have a right to propose initiatives for worthy causes, (House) Finance Chairman Charles Sargent has worked with the administration to develop a comprehensive balanced budget plan that cuts taxes and reduces wasteful government spending while meeting the priorities of Tennesseans.”

Fitzhugh indicated it probably wouldn’t shock him if Republicans don’t adopt the Democrat’s alternative budget. Nevertheless, he noted that at least with regard to the grocery-tax cut that’s already passed in the House this session, Republicans were initially resistant to the plan before ultimately coming around to support it.

“I don’t want to get ‘D’ and ‘R’ here, but the original food-tax proposal was a ‘D’ proposal,” Fitzhugh said during the press conference.

The House Democratic leader later told TNReport.com that while Republicans and Democrats may differ philosophically over the relative equity and benefits of large, targeted tax cuts for the few — namely, cutting the estate tax, which the House also voted to do last week — versus lightening burdens like the food tax that all Tennesseans bear, both parties agree that it’s always good to find ways to encourage Tennesseans to shop here rather than across state lines.

Justin Owen, president of the free-market Beacon Center of Tennessee in Nashville, said his organization is primarily interested in finding creative and sustainable ways to “cut government spending, not enhance it,” so they don’t find the Democrats’ proposals for increased program funding all that appetizing.

“When government collects more revenues than projected, it should return it to taxpayers, not spend it,” he said. And as far as the debate over what kind of tax cut ultimately provides the state with greater economic benefit, “a food tax cut will not make anywhere near the economic impact as eliminating the death tax or rolling back the Hall tax (on stock income and dividends),” Owen said.

But the Democrats’ idea of increasing the size of the food-tax cut certainly ought to be considered seriously, he said.

“Cutting the tax on food to be competitive with bordering states is a worthy endeavor,” Owen said. “A lower food tax could potentially lead to other states’ residents shopping for groceries in Tennessee rather than the other way around.”

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Governor’s Budget Amendment Prompts Bonanza of Spending Requests

Lawmakers have a wish list up to $500 million in projects and programs long — a pipe dream they’ll have to whittle down to about $5 million, says Senate Majority Leader Mark Norris.

The governor included $5 million in legislative expenditures in his budget, and now lawmakers are clamoring for a piece of that available money. The proposals include projects specific to lawmakers’ districts and attempts to fund favored bills or existing state programs.

Norris said it’s too soon to say what lawmakers will decide to spend that available money on, but said they so far don’t see making many changes to the governor’s proposed budget and accompanied amendment.

“Given that we only have about 1 percent of what’s requested available, all of them will not make it,” said Norris, R-Collierville. “Though worthy, there’s not enough taxpayer money available to fund everything that people would like to see us fund.”

Senate lawmakers began combing through the requests this week in a budget subcommittee and expect to decide next week which of those proposals will actually be funded.

“People think there’s more money,” said House Finance Committee Chairman Charles Sargent, R-Franklin, who said his office has 350 funding requests, an increase from last year’s 150 requests.

Before lawmakers can go home for the year, they need to approve a budget. Gov. Bill Haslam proposed a $31.1 billion spending plan, which the Republican-driven Legislature is so far keen on.

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Haslam’s Budget Amendment Aimed At ‘Right-Sizing,’ Not Reducing, Government

Gov. Bill Haslam ran on the mantra of reducing the size of government, but acknowledges his most recent edits to the budget don’t completely achieve that end — at least when it comes to adding back spending he originally said he’d cut.

And he says that’s OK because his goal is more about trying to “right-size” state government rather than shrink it.

“I’m a conservative Republican, and I don’t apologize for that,” Haslam told reporters after moderating a discussion about higher education goals at the Spring College Completion Academy in Franklin Tuesday.

“But I don’t think government’s evil. I don’t even think it’s a necessary evil. I think it’s a critical way that we provide needed services. We just believe in doing that in as small a way and as cost-effective way as possible,” he said.

The governor released his latest round of budget adjustments to the Legislature Monday, such as cancelling $12 million in cuts he built into the spending plan earlier this year.

In total, though, his administration’s budget tinkering doesn’t move the  bottom line much. It saves almost $279 million through projected increases in revenue and budget reductions, but puts most of that back into the budget, to the tune of about $265 million in new spending and backtracking on earlier cuts.

For example, the administration has backed off a $795,000 proposal to adjust class sizes and offer merit pay for teachers, and also deleted a $2 million miscellaneous fund while adding $1 million for land acquisition and maintenance at Radnor Lake State Natural Area in Nashville.

Haslam characterized the changes as “actually adding to the size of government because we’re actually adding costs” that weren’t in his original plan.

But the price tag for next year’s budget still looks to be lower than the current year’s. The proposed budget is $31.1 billion, about $900 million less than this year’s expected bottom line.

Haslam was quick to point out he is still aiming to lower state taxes on inheritances and groceries this year, as are other legislative leaders.

“When government receives more money — which we have, revenues are up — our goal is not to spend that money. Our goal is to return it to the taxpayers, the rightful owners,” said House Speaker Beth Harwell.

She and other House Republicans are pushing for a reduction in the gift tax, which kicks in when someone gives an expensive item like a car or a boat. The move has a $14.9 million annual price tag the governor did not include in his budget.

Neither did the Haslam administration factor in the cost of increasing the exemption to seniors who pay income taxes on their interest from bonds and stock, a plan near and dear to Lt. Gov. Ron Ramsey, who admitted Wednesday he may have to wait until next year to reduce that tax.

“If we give a tax cut, we have to cut somewhere else in the budget to make that happen. We have to have a zero bottom line to make it work,” said Ramsey. “Is it still a priority of mine? Absolutely. But is it as big of a priority as restoring some of the cuts the governor put back? Probably not.”

State tax revenues this year have so far exceeded what the governor built into his budget by $28 million, Finance Commissioner Mark Emkes said, but the governor plans to hold that money, and any other overages, in reserves for future budget years.

“I believe in smaller government,” said Haslam, “but I also think some of those things, some of those services, are really vital ones. … If we can do that under our current tax structure, or our future lower tax structure, than I want to try to do that.”

The night he won his Republican primary in August 2010, Haslam made a point of saying one of the key things the next governor has to do is make government smaller.

“We need a governor that understands that right now, facing the challenges, it’s about shrinking the size of state government and making do with less,” he said.

Alex Harris contributed to this report.

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Haslam Revises Budget Plan

Gov. Bill Haslam’s state government spending plan that he’s offering to the Tennessee Legislature now calls for a slight enhancement to the small food-tax cut he proposed initially, and opts to have taxpayers continue funding certain programs his administration had originally slated for cuts.

The proposal would cut the food tax by an extra nickel per $100 in groceries mainly because it’s easier for retailers to calculate on most cash registers, the governor said Monday.

The state tax on non-restaurant food is now 5.5 percent. The governor originally wanted to drop the tax to 5.3 percent, but now wants it set at 5.25 percent.

“Quite frankly, we just felt like again, if we were going to move it, we might as well do more now rather than later,” Haslam told reporters after talking to 4-H youth participants at the War Memorial Auditorium in Nashville.

The measure would save the average family of four buying $884 worth of groceries each month $26.52 a year. That’s $5.30 more in savings than the governor’s initial proposal.

Haslam’s long-term goal was to drop the tax down to 5 percent over three years, but he says he now wants to accomplish that in two.

The additional cut will slice another $3.3 million from the budget, for a total cost of $20.4 million from the food tax reduction. The tax cut is in addition to the governor’s decision to set a four-year timeline on the elimination of the tax charged when people inherit estates worth more than $1 million a year.

The governor also wants to restore funding to several programs that had been axed because they were paid for with one-time money.

They include these additions:

• $1 million for family support services run by the Department of Intellectual and Developmental Disabilities.

• $4 million from increasing the daily payment to local jails housing state prisoners by $2.

• $3.9 million for Healthy Start and Child Health and Development programs, such as home visiting programs for first-time parents promoting healthy lifestyles and child abuse prevention.

• $1.4 million for peer support centers run by the Department of Mental Health. These facilities act as halfway houses for people transitioning out of hospitals.

• $1 million for land acquisition and maintenance at Radnor Lake state park in Nashville.

The edits come weeks before the state funding board plans to meet to review the latest state revenue and economic trends and predict tax collections for the next year.

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Stock Earnings-Tax Reduction Not Likely to Make Cut in Haslam’s Budget

Gov. Bill Haslam expects to release a list of edits to his budget plan Monday, but is staying quiet about how he wants to spend an unexpected influx of taxpayer dollars collected by the state.

The governor did say he doubts there will be room in his $31 million budget for Lt. Gov. Ron Ramsey’s proposed cut in the “Hall tax” on income from interest and dividends.

“Cutting the Hall tax will probably not be a part of our amendment,” Haslam told reporters Friday at LP Field in Nashville after encouraging youth exercise.

Reducing the Hall tax is one of hundreds of millions of dollars worth of requests his office has received in recent weeks as state revenues grew beyond expectations, Haslam told reporters earlier this week, saying he’d like to plug the excess money into basic service programs that faced cuts or would be funded by one-time money.

“We’re working on the amendment to the budget, and we have very few dollars and we have about $600 million worth of requests,” Haslam said Thursday after speaking with the Tennessee Board of Regents in Nashville.

“We’re trying to go back where we can and address some things we didn’t, couldn’t fit in the budget the first time,” he said.

The Hall tax is a favored tax cut by the lieutenant governor, a Republican from Blountville. Ramsey is backing two proposals reducing the tax on income from interests on bonds, notes and dividends from stock for people over 65 years old — who are now exempt from the tax if they claim less than $26,200 in income as individuals or $37,000 as a couple.

One plan, SB2535, would raise the senior exemption level to keep pace with the rate of inflation, which would mean the state losing out on $1 million a year. The other, SB2536, would up the exemption by $1,000, in turn lowering state revenue collections by an estimated $88 million a year.

Tax collections on everything from buying alcohol, clothing and cars to taxes paid by corporations are up from this time last year, giving the governor $251 million more for the government to spend or give back to taxpayers than originally predicted.

In announcing his first draft of the budget, Haslam said stronger-than-anticipated revenue helped balance out $160 million in one-time federal money leaving the state budget.

But tax revenue has continued to grow beyond expectations.

“As revenues increase, some steps are being taken to reduce taxes, in other words, return some money to the people,” said Mark Emkes, Commissioner of the Department of Finance and Administration.

“Money grows, the government grows, the budget grows. But the idea being that rather than just spend that money… it’s best to give that money back to the citizens of Tennessee,” he told TNReport.

The governor now is behind two tax cuts: reducing the tax on food from 5.5 percent to 5.3 percent, and phasing out the tax on inheritances worth more than $1 million. He also said he was weighing House Republicans’ idea of eliminating the tax on gifts.

Collectively, those reductions would mean $145 million in tax cuts over four years, said House Finance Committee Chairman Charles Sargent, R-Franklin.

“I think every year we need to start looking at reducing taxes. As revenues grow, I think we can reduce taxes by an amount of money so we don’t just keep growing the size of government,” said Sargent.

But that doesn’t mean there aren’t a couple things he’d like to see Haslam add back into his budget, he said, such as about $3 million for family resource centers and $2.4 million for peer support centers.

The governor expects to hand off his latest budget recommendations to the General Assembly Monday, April 2. Emkes plans on presenting those details to legislative budget committees Tuesday.

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Press Releases

Haslam Includes $127M MTSU Science Building in Budget

Press Release from Middle Tennessee State University; Jan. 30, 2012:

MTSU applauds Haslam’s decision to include Science Building in budget

MURFREESBORO—Middle Tennessee State University applauded Gov. Bill Haslam’s announcement Monday night that the University’s $126.7 million Science Building project has been included in his proposed 2012-13 budget.

“We are grateful to Governor Haslam for recognizing the importance of the Science Building project and including funding for its construction in this year’s budget proposal,” said MTSU President Sidney A. McPhee. “As home to the state’s largest undergraduate student population, the Science Building is critical to our continuing efforts to provide Tennessee with graduates ready for the 21st century workforce.

“We appreciate the governor’s leadership, as well as the encouragement and support we have received from the members of the General Assembly, especially our local delegation. And we thank the Tennessee Board of Regents and the Tennessee Higher Education Commission for their help in moving this project forward.”

The new Science Building will provide more than 250,000 gross square feet of teaching, faculty and student research laboratories and collaborative learning spaces. The University’s existing Wiser-Patten Science Hall and Davis Science Building were built in 1932 and 1967, respectively, and have a combined total of only 75,332 net square feet.

In 1968, just after the Davis building opened, MTSU’s student head count was at 6,779. By fall 2011, the University’s enrollment was 26,442. That means MTSU has seen its head count increase almost four times with no increase in space for science education.

At least 80 percent of all MTSU students will take at least one class in the new building, and every student is required to take biology as a general-education requirement.

Science courses offered in the new building will serve academic programs beyond general education, biology andchemistry. Those additional programs include aerospace, agribusiness/agriscience, engineering technology, nursing, physics and astronomy, elementary education, education teacher licensure in science education, wellness and exercise science in health and human performance, human sciences nutrition/food science/dietetics, geology, social work, and recording-industry production technology.

McPhee said the new Science Building will:

  •  enable the University to address needs identified in the America Competes Act by creating additional science graduates to fill high-technologyjobs and teach science and math in K-12 schools;
  • enhance middle Tennessee’s regional economy by providing technical entrepreneurs and researchers who launch small businesses throughideas and research;
  • make MTSU and the state more competitive for federal grants and contracts in all areas of science, technology, engineering and mathematics; and
  • support greater collaboration with Oak Ridge National Labs through MTSU’s new science doctoral programs.

Haslam’s budget proposal included nearly $264 million to fund long-deferred capital-outlay projects in higher education, including:

  •  $126.7 million for the MTSU Science Building, which was confirmed last year as the No. 1 capital priority of the Tennessee Higher Education Commission and the Tennessee Board of Regents system;
  • $94 million for the University of Tennessee-Knoxville’s Strong Hall science lab; and
  • $24.1 million for a simulation center at the UT Health Science Center in Memphis.

MTSU already has received $16.8 million from the state for a campus chilling plant, distribution lines and planning for the Science Building project, as well as $1.7 million for site demolitions and other preparations.

For more information about the new MTSU Science Building, including full-color renderings of theproject, visit www.mtsunews.com/sciencebuilding.

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Governor Set to Unveil State Budget Proposal

Gov. Bill Haslam is scheduled to pitch his roughly $30 billion spending plan to lawmakers on Capitol Hill Monday evening. During the annual State of the State address before a joint session of the Tennessee General Assembly, the governor is expected to outline his fiscal priorities and policy vision for the coming year.

It’s unclear exactly what the governor’s budget for fiscal year 2013 will look like. But Haslam and his staff have consistently said it will include some cuts.

Lt. Gov. Ron Ramsey told reporters Thursday he doesn’t expect many surprises in Haslam’s proposed budget, which lawmakers will spend the next weeks and months delving into and fine-tuning before they adjourn to hit the campaign trail.

Ramsey warned, though, that the various government program constituencies shouldn’t get too excited by the state’s growing tax revenue.

“I think there will still be cuts in this year’s budget, but compared to what we’ve been through the last two or three years, it’ll be easier,” said Ramsey.

The state anticipates collecting about $300 million more in tax revenues next fiscal year than this year as the economy continues to recover. However, rising costs mandated by state or federal law in education, TennCare and pensions will mean roughly $500 million in additional expenses this year, according to the administration.

“Our job (in state government) is to provide the very best service that we can at the lowest price,” Gov. Haslam told civic and business leaders in Cookeville Monday. “People every day depend on the State of Tennessee to go get a driver’s license and not have to wait in line forever, to make sure that I-40 out here is safe, to make sure TennCare is provided for our most needy families.”

Over the last six months, state agencies have handed several cost-cutting proposals to the governor’s office. One plan showed how Tennessee government departments and personnel would acclimate if the feds lopped off 30 percent of their Volunteer State spending. The resulting $4.5 billion budget contraction would require state government to lay off 5,100 of its roughly 40,000 employees. That plan acted mainly as a test exercise to prove to federal bond rating agencies the state is not overly dependent on federal dollars, according to the Haslam administration.

The other budget requests, presented during a series of budget hearings around the state in November, revealed how each department would cut 5 percent from yearly spending, with many departments writing off unfilled jobs.

With the state’s financial future looking rosier now than it did when the governor asked for those cuts, Haslam has signaled he’s willing to make some fiscal moves that previously he’d said weren’t in the cards for 2012. The administration is indicating tax cuts are now a possibility — like  trimming back the food tax, which would mean the government eating up $18 million less of Tennesseans’ aggregate food purchases. Another priority for the administration is raising the exemption on the estate tax — sometimes referred to as the “death tax” — which would mean a $14 million reduction in state revenue. The governor has also suggested allocating $6 million toward anti-crime measures annually.

“We’re all just kind of sitting on pins and needles waiting to see what the governor will recommend in the budget,” Board of Regents Chancellor John Morgan told the Higher Education Commission Thursday. “We’re very hopeful that this is going to be a good year for our education budgets, which would be a very pleasant experience given the string of the last several years, which had not been so good.”

Haslam has hinted a willingness to put money in his budget to check the immigration status of people collecting government entitlements like food stamps, which would cost $5.8 million, according to a 2011 estimate.

The governor has asked each commissioner to conduct a “top to bottom” review to identify how each would rebuild their organization to find efficiencies and better determine what services state government should be providing. Whether or how the governor will build the results of those studies into state government in the next year is not known.

The governor will unveil his budget plan at 3 p.m. followed by his State of the State address at 6 p.m.

Here are stories we’ve written about state agencies’ budget proposals:

Board of Regents

Bureau of Investigation

Department of Correction

Department of Education

Department of Health

Department of Tourism

Department of Transportation

Departments of Economic and Community Development, Financial Institutions, Labor and Workforce Development, and Safety and Homeland Security

Departments of Safety and Homeland Security, Human Services, Intellectual and Developmental Disabilities, Labor and Workforce Development

 

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AG Cooper: More Funding or Lose Lawyers

Attorney General Robert Cooper told lawmakers Tuesday his office lost 14 percent of its lawyer workforce to other offices and firms last year, in part because the state’s salaries for experienced lawyers are not competitive.

That figure was more than double the percentage that left the prior year, fiscal year 2010, Attorney General Cooper said at a meeting of the House Judiciary Committee Tuesday.

“My most important issue in the office is finding the money to keep excellent lawyers that we have, keep them working for the state,” Cooper said.

Cooper underscored his office’s work suing people to bring money into state government coffers.

“In the current fiscal year budget, my office is receiving $24.1 million in state dollar funding. In comparison, just four of our divisions – Bankruptcy, Collections, Consumer, and Medicaid Fraud – returned to the state $33 million in fiscal year 2010-2011,” Cooper said.

According to Cooper, 48 of the lawyers in his office, or about one-third, make between $50,000 and $60,000 a year. Of that one-third, 40 make between $50,000 and $55,000 a year and have up to 10 years of experience.

The median wage per year for lawyers in the Nashville area is roughly twice that figure at $100,320, according to an American Bar Association study of Census and other data.

Cooper said many of the lawyers who left the AG’s office received pay increases between $10,000 and $20,000.

Gov. Bill Haslam has said he is interested in finding better incentives for good employees after several commissioners have complained they struggle to retain quality workers. As part of his legislative package, Haslam has proposed ways to place more emphasis on merit and skills — as opposed to just years with the state — in hiring and promotion decisions.

“The team with the best players wins. It’s just true,” he said at a Cookeville meeting with local civic and business leaders. “So the most important thing we do is make certain we have the very best people.”

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Comptroller Strikes Positive Note on State Finances

Tennessee’s finances may not be perfect, but they’re in “good, sound fiscal condition,” according to the state’s top auditor.

“Let’s not mess it up,” Comptroller Justin Wilson told members of the House Finance, Ways and Means Committee this week.

“To keep in really good shape, the state needs to continue to reduce expenses, and the administration needs to continue to increase the efficiency of operations,” he said.

Wilson said the state needs to focus on rebuilding the rainy day fund, brace for the costs of implementing national health care reforms, maintain the state’s high credit ratings and improve financial reporting.

Source: Tennessee Comptroller's Office

The comptroller offered committee members a snapshot of the state’s finances as the group prepares for Gov. Bill Haslam’s annual State of the State address later this month where he’ll release an estimated $32 billion budget proposal.

Wilson said state government will have to keep an eye on growing expenses such as Tenn Care, K-12 education and pensions. If that doesn’t happen, the state will have a hard time justifying tax cuts or funding capital projects, an area where the state has “fairly severe needs,” he said.

Gov. Bill Haslam has proposed reducing the sales tax on food, as well as lifting the estate tax exemption from $1 million to $1.25 million.

But even though the economic picture is beginning to look better, tax reductions are not a good idea, said Sen. Doug Henry, D-Nashville.

“That is a temptation since collections are up. That’s a temptation that I really think we need to try to avoid if we can,” said Henry. “A day or two of prosperity could be easily offset over the long haul by the carelessness in this area of thinking.”

Wilson said he still expects the state’s finances will return to pre-recession levels by 2014.

State Treasurer David Lillard is expected to make his own presentation to the committee next week that will likely review college savings plans and state pension costs.