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VOL. 123 | NO. 69 | Tuesday, April 8, 2008

Even Some Popular Bills Likely to Fail In Tough Budget Year

By ERIK SCHELZIG | Associated Press Writer

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NASHVILLE (AP) - Even in good years, lawmakers don't like to hear their proposals have been placed "behind the budget."

In a tight year like this one, that fate might as well be a death knell.

When the House Budget Subcommittee - known in the past as the "black hole" for its ability to kill off legislation - places a bill behind the budget, it means the panel plans to revisit the measure if any money is left after the state's spending plan is set.

This year, officials are planning cuts in continuing programs because of worse-than-expected tax collections - meaning there won't be too many proposals re-emerging from behind the budget.

"It will be a painful year, no doubt about that," said Gov. Phil Bredesen, a Democrat.

That means several proposals that would otherwise have broad support - such as increasing penalties for violent criminals or lowering the state's tax on groceries - will have a difficult time passing this year.

When the governor presented his spending proposal in January, he assumed a shortage of $165 million in the current year. The general fund shortfall stood at $212 million last month - and it's expected to widen before the budget year ends on June 30.

The amount of this year's shortfall will spill over into plans for next year because the state will be starting from a lower base.

"Just as I've tried to caution people when times are good you don't need to go out and spend every dime that comes through, I'd also caution people when times are bad it's just part of the normal business cycle," Bredesen said.

The governor has signaled that he may be willing to whittle down one of his top priorities this year in his plan to add $25 million to the state's pre-kindergarten program to expand access around the state.

Proposals with large and small price tags are likely to be affected by the economic slump.

One bill sponsored by Rep. John DeBerry, D-Memphis, would ramp up prison sentences for people convicted of aggravated robbery. But it would cost an estimated $74 million per year.

Another bill sponsored by Rep. Richard Montgomery, R-Sevierville, would require state health insurance companies to cover the cost of replacement prosthetic limbs. Yet at a cost of $1.5 million to TennCare alone, its prospects appear dim.

Advocates for reducing the state's share of the sales tax on food say they want to press on - especially amid a worsening economy.

State lawmakers last year approved a half-point reduction in the state's tax on most groceries - lowering it to 5.5 percent.

Brian Miller, executive director of Tennesseans for Fair Taxation, said further cuts would help consumers. "Reducing the food tax gives them a little more to spend on food," he said.

Advocates say closing business tax loopholes could help offset the lost revenue of a reduced sales tax on food. But even supporters are dubious about passing the measure this year.

House Finance Chairman Craig Fitzhugh, a co-sponsor of the food tax reduction proposal, said the bill needed to be introduced to keep attention focused on the issue.

"If the bill's not there, we'll never get it done," said Fitzhugh, D-Ripley.

But that doesn't trump concerns over the budget picture, he said.

"Our national economy - which is reflected in our local economy - makes things pretty tough at this time," Fitzhugh said. "So we don't want to do anything that fundamentally harms this state."

---

Associated Press writers Beth Rucker in Oak Ridge and Lucas L. Johnson II in Nashville contributed to this report.


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

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PROPERTY SALES 86 393 21,159
MORTGAGES 94 424 24,785
FORECLOSURE NOTICES 0 93 8,703
BUILDING PERMITS 173 1,010 43,347
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BUSINESS LICENSES 15 90 6,491
UTILITY CONNECTIONS 28 167 13,678
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