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VOL. 123 | NO. 102 | Friday, May 23, 2008

Legislature Passes $27B Budget, Adjourns for Year

By BETH RUCKER and LUCAS L. JOHNSON II | Associated Press Writers

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NASHVILLE (AP) – The state Legislature adjourned for the year after lawmakers passed a $27 billion state budget that cuts jobs and education and health care spending to fill a nearly half-billion-dollar revenue shortfall.

Only one senator and four House members cast “no” votes late Wednesday against the budget package laid out by Gov. Phil Bredesen, who is now expected to sign it into law.

The lawmakers approved offering buyouts to state workers to cut about 2,000 jobs, reduce spending for colleges and universities, give up on adding more pre-kindergarten classrooms and scrimp on increasing money for K-12 education.

Bredesen in January proposed a state budget of $27.8 billion, which was $170 million lower than the current year. But sharply declining revenues since then led the governor to propose another $468 million in cuts.

“We did the best we could do with the budget given the financial condition of the state and given the economy we’re dealing with,” said Sen. Doug Jackson, D-Dickson. “I think it’s a responsible budget and I think it represents a lot of hard work among members of the Senate and the House.”

Sen. Mae Beavers, R-Mt. Juliet, said the budget cuts, which take effect July 1, didn’t go far enough and voted against the measure. Republican Reps. Joey Hensley of Hohenwald, Jimmy Matlock of Lenoir City, Brian Kelsey of Germantown and Eric Swafford of Pikeville also voted against the measure.

“I felt like they’re spending like drunken sailors,” said Beavers, who voted against the budget last year too. “I didn’t agree with a lot of the pork that was in the budget this year, despite the fact we’re laying off state employees.”

Despite little opposition to the spending plan, which takes effect July 1, lawmakers delayed the budget vote until late in the evening so a compromise could be worked out first over changes to the lottery scholarship program.

The staffing cuts – which represent 5 percent of all state employees – are meant to save about $64 million amid a shortfall in the coming budget year that’s approaching a half-billion dollars.

The state buyouts plan will cost roughly $50 million but eliminate about $64 million in recurring spending.

The state will offer packages worth between $23,000 and $47,000, depending on a worker’s length of employment, with cash incentives, 18 months of health insurance benefits and two years of tuition to a state community college or university.

Administration officials have said workers near retirement and those with less than 10 years of service are the ones most likely to take the buyout. The goal is to reduce the state work force by 5 percent, but layoffs will begin in January if enough workers don’t accept the package.

The budget is allocating $28 million toward changes to the lottery-funded scholarship program that make it easier for college students to keep the merit-based HOPE awards. It took two years of negotiations for lawmakers to finally reach agreement on the scholarships.

“Accomplishing these milestones during tough economic times shows that by managing carefully and focusing on key priorities, tight budget years don’t need to stall Tennessee’s progress,” Bredesen said.

Other cuts include $114 million in increases in K-12 education funding, $80 million expansion of TennCare’s medically needy program, $56 million in higher education operating money and $22 million for new pre-kindergarten classrooms.

The budget is setting aside $100 million to help Tennessee land unspecified economic development projects. It doesn’t raise taxes but dips into state reserves to provide a $400 one-time payment to state workers instead of a raise.

“There’s no smoke and mirrors in this budget, and I think this budget is a responsible one. It reflects a lot of tough choices,” House Finance Chairman Craig Fitzhugh, D-Ripley, said.

Lawmakers ended up working without pay Wednesday because they exceeded the 90-day limit for a two-year legislative session. They earn a salary of just more than $18,000 and can collect a $161 per diem during the 90 days to cover food and lodging.

Copyright 2008 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

MORTGAGES 80 320 1,066
BUILDING PERMITS 120 590 2,248