Term-limited Tennessee Gov. Phil Bredesen (D) unveiled a new budget plan that would cut state spending and use up about $200 million in rainy day funds during his final state of the state address Feb. 1.
Already last year, the legislature approved a spending plan that relied on $450 million in rainy day money, but Bredesen said there would still be about $850 million left in the fund at the end of this fiscal year.
The reserve money would maintain some health and human services programs for two years. "The reason for funding for two years instead of one was to give a new governor some breathing room at the beginning of his or her term, and to give additional time for the economy to recover and perhaps make the cuts a moot point," Bredesen said.
Like other states, Tennessee was spared painful budget cuts last year because of the federal stimulus package. But Bredesen said he did not include any projections for new federal dollars in his new budget proposal, instead reinstating the cuts that were avoided last year.
"There are in essence cuts from two different years becoming effective at the same time," he said.
Bredesen said his plan calls for laying off almost 1,000 workers, a number that would have swelled to more than 1,400 without tapping the reserve funds. It would also restrict capital spending and cut agencies by an average 6 percent.
At the same time, the proposal would give employees a 3 percent bonus, maintain funding for the state's education plan and fully fund contributions to the pension system. Bredesen called for raising the driver's license fee for the first time since 1988 to protect the jobs of 85 state troopers and 56 other employees.
Bredesen used his address to thank lawmakers for approving tight new education standards during their recently-completed special session, and to try to reassure teachers concerned about the changes. He promised to spend "a good deal of time" during his final year in office to improve higher education and challenged the University of Memphis to become one of the top 25 metropolitan research universities.
He also praised the state's child welfare system for becoming the seventh state system to become fully accredited.