Republican gubernatorial candidates are giving Democratic Gov. Phil Bredesen good marks for his management of the state budget in tough times.
But they are braced for extremely difficult decisions, and they expressed their approach to the next budget Tuesday at the Bluegrass Yacht and Country Club where the Hendersonville Chamber of Commerce held a forum.
Bredesen last week said the recently approved $28 billion budget plan will leave the next governor in a “good, solid position” and keeps the state “on strong financial footing.”
That’s in contrast to many of the statements that have come from the Republican side of the gubernatorial campaign, where candidates have expressed concerns about the end of stimulus money. Nevertheless, they’re ready to cut, they say.
The consensus is that Tennessee is in excellent shape when compared to other states.
Knoxville Mayor Bill Haslam, Lt. Gov. Ron Ramsey and U.S. Rep. Zach Wamp addressed the budget and other issues in the forum, and in what may be becoming the norm some sharp exchanges surfaced as the candidates distinguish their positions from each other. The primary election is Aug. 5, and early voting begins July 16.
Haslam told the audience there will be no tax increases, which is something all the candidates agree on, and that the expected economic growth will only be 1 or 2 percent this year, adding that the only alternative is to cut back on the expense side.
“Everybody says we want you to run government like a business, until you do it,” Haslam said. “We’re talking about shrinking the budget in a lot of places. I can tell you the first cuts are the easiest.”
But Wamp, although asked about immigration, didn’t let Haslam’s budget-cutting comments go unchallenged. Wamp pointed out that Haslam raised taxes before he cut the budget in Knoxville.
“I don’t want to let this go by, after what the mayor just said,” Wamp said. “He is my friend, and he is a nice guy, and I know his daughter (Leigh) is in the room, and I don’t want to be mean, but when he became mayor, before he cut a dime of spending, he raised taxes 15 percent.
“That’s not the tough work. If you brag about debt reduction without saying I raised taxes 15 percent, it’s not complete. It’s not honest, and that’s the fact about that. These are differences that need to come out as we go down the stretch, because frankly we don’t need anymore establishment moderates running our state.”
Haslam came back, saying, “I’m the only one that’s been responsible for preparing, passing and implementing a budget. If revenues don’t meet expenses that’s been my job.”
Haslam said his predecesssor — he didn’t name him, but it was Victor Ashe — had said the person who succeeded him had no choice but to have a tax increase.
“Now, we have the lowest property tax rate in over 50 years,” Haslam said. “Our budget is less than three years ago, and I am glad to stand by that record.”
The budget issue is clearly the biggest obstacle facing the next governor. All three candidates at the forum credited Bredesen for his management.
“Compared to other states, Governor Bredesen is leaving the next governor in pretty sound condition,” Wamp said before the forum. “I’m grateful for the work he has done on economic development, bringing in new investments in our state, and I’m grateful he has responsibly managed the budget over his eight years.
“And I do believe the state, compared to other states, is in a strong position going forward, even though we’ve got budget deficits (ahead). We actually have the ability to manage those budget deficits in our state without new taxes, which is rare in America today.”
Ramsey was squarely in the middle of the recent budget process and was critical of Bredesen when the governor introduced a list of potential new taxes to get the budget process home. But in the end, the Legislature pushed back enough to claim it balanced the budget with no tax increases, and Ramsey said he was proud of that.
“We left a blueprint on how the next governor can get back to a recurring-to-nonrecurring basis. In other words we’re not using one-time money to finance expenses,” Ramsey said. “I think the Senate was very protective. I’ll hand it to our chairman of finance, Randy McNally (R-Oak Ridge,) who was an ardent proponent of making sure that happened.
“Also the House wanted to dig deeper into reserves, to dig deeper in our rainy day fund, and the Senate held firm on that. So the next governor will at least have some cushion if the economy doesn’t turn around. We all hope the economy turns around and this takes care of itself, but we have left a blueprint.”
Ramsey added that the state is still not out of the woods.
“It’s still going to be hard. It’s still going to be tough,” Ramsey said. “But the next governor will at least have a way to get out of this.”
Haslam, no doubt thinking of those people who say they want cuts but then react when the cuts actually occur, is clearly concerned about the loss of stimulus funds from the federal government.
“I’ll give the Legislature and the administration credit for passing a good budget this year, but there is a lot of money in this year’s budget that is not available in next year’s,” Haslam said. “There are some rainy day funds I don’t think we will be able to draw from next year, some stimulus plan money. There will be a big challenge.
“Relative to some of our peer states, are we in good shape? Yeah, I think we are, and I think a lot of people deserve credit for that. I don’t think anybody should kid themselves. We saw how hard it was to figure out the last hundred-million-dollar gap of this year’s budget, and there’s a billion and a half in revenue in this year’s budget that’s not going to be in next year’s.”
Haslam pointed again to the reaction when the reality of budget-cutting comes.
“Some blueprints have been laid out for how we’re going to deal with that, but that pain hasn’t been felt yet,” he said. “Showing a plan for how we’re going to make cuts and then making the cuts and feeling those cuts is a whole different thing.”