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NewsTracker Tax and Budget

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.

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Press Releases

Comptroller’s Divisions Of Bond, Local Finance To Merge

State of Tennessee Press Release, March 29, 2010:

The Tennessee Comptroller’s Division of Local Finance will be merging with the Division of Bond Finance to create the Office of State and Local Finance, effective April 1.

The office will assume all duties and responsibilities of the former two divisions. The Division of Bond Finance has been responsible for managing the state’s debt, including issuance of all bonds, notes and payments of the debt. The Division of Local Finance has been responsible for approving budgets and debt obligations and providing technical assistance for local governments throughout Tennessee.

“This merger allows us to provide efficient services and make government work better in all Tennessee communities and for our investors,” Comptroller Justin P. Wilson said in announcing the change.

The Office will be led by Mary-Margaret Collier, former director of the Division of Bond Finance. Ms. Collier may be reached at 615-401-7872 or at mary.margaret.collier@tn.gov

The new mailing address will be: Office of State and Local Government, James K. Polk Bldg., 505 Deaderick St., Suite 1600, Nashville, TN 37243-0273.

Municipal issuers should file the state form, CT-0253, and other requests with the Office of State and Local Finance at that address.