Contact: Darlene
Schlicher
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June 12, 2009
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Senate Finance Committee passes fiscally responsible
budget/
West Tennessee megasite funded under
plan
(NASHVILLE, TN), June 12, 2009 – The
Senate Finance Committee has approved a fiscally responsible budget for the
2009-2010 budget year that borrows less, has a little more protection for the
Rainy Day (savings) Fund and is closer to balancing recurring and nonrecurring
expenditures. The plan, as amended by Senate Republicans, also cuts several of
the governor’s proposed tax hikes, including one on cable television boxes and a
measure to increase taxes on business phone rates.
On job growth, the legislation, as amended by the Finance
Committee, fully funds Haywood County megasite and Solar Farm in West Tennessee,
as well as economic development projects set to establish manufacturing
facilities in the state including Volkswagen, Hemlock and Wacker.
“We face many economic challenges in West Tennessee,” said
Senator Dolores Gresham (R-Somerville). “I appreciate my colleagues support of
the megasite project, which is an investment in our district’s future. At the
same time, I remain concerned about the debt incurred in the budget package.
The amendment adopted by our Finance Committee does drastically trim this
indebtedness back.”
The vote came after Finance Commissioner Dave Goetz told lawmakers
that there was a continued decline in Tennessee’s revenues in May. Goetz said
sales taxes collected in May were 11 percent lower than the yearly average of 7
percent and franchise and excise tax collections were down 40 percent for the
month. Goetz said the revenues fall short of the governor’s revenue predictions
for the budget, which were based on the most optimistic end of the state’s
Funding Board predictions. The Funding Board consists of the state’s top
economic advisors.
“This is a ‘truth or consequences’ budget,” Gresham added. “We
must face the truth about our budget and the serious economic condition of our
state or we will face serious consequences next year. There is a big risk if
the legislature acts as if there is not a problem.”
The plan prioritizes education by fully funding the Basic
Education Program, the state’s funding formula for K-12 education. Pre-K would
be kept at the same level of funding under the plan. It also funds Tennessee’s
higher education at the highest level of funding to draw down approximately $500
million in federal stimulus available through the American Recovery and
Reinvestment Act. In addition, it fully funds lottery scholarships to provide
students with the opportunity to receive a college
education.
Republicans say a list of capital projects will be restored
if state fiscal stabilization funds from the federal stimulus package are
available or if other federal reimbursement match increases free up state
dollars. Last year, the legislature appropriated cash to fund the projects.
However, the governor held them after revenues plummeted. This year, he
proposed the $168 million in cash previously approved by the legislature for
those projects be used to plug the gap in the state budget. In turn, the
governor recommended the state incur debt to fund the projects.
The action will keep Tennessee from putting these building
projects on the state credit card at a time when economic conditions are
unstable. The plan uses the debt service on those bonds, at $23 million per
year, for other critical budget purposes like helping the most vulnerable
citizens in Tennessee, mentally ill and dependent and neglected children in need
of services.
Other highlights of the budget, SB 2355, include:
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Keeping the employee pension fund actuarially sound
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Not accelerating the number of employee positions cut from the governor’s
plan
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Keeping the state health insurance program fully funded
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Funding unemployment benefit increases and extended benefits
“Tennessee cannot act like Washington and just print more money,”
Gresham continued. We must act responsibly as
stewards of the people’s money. We must take a fiscally
responsible approach to make sure we can weather any further deterioration in
our economy.”
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