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Gov. Bill Haslam presented his State of the State/Budget Address to the General Assembly outlining his proposals to deal with the state’s current budget crunch, while working towards reforming education and making our economy stronger to welcome new jobs to Tennessee.
The $30.2 billion balanced budget is almost $2 billion less than the current 2010-11 budget of $32 billion.
It contains no new taxes and maintains essential government services by focusing reductions in administrative areas to minimize any impact felt by Tennessee taxpayers.
The Governor said the budget calls for the state to spend less money but work harder to stretch public dollars, including making state government more “customer friendly” for Tennesseans.
At the same time, the Governor asked lawmakers to assist in transforming how government works to reflect current economic conditions.
“I want to emphasize that our current financial constraints are not a temporary condition,” said Governor Haslam. “I think what we are seeing in government today really is the ‘new normal.’ Every government, ours included, will be forced to transform how it sets priorities and makes choices."
Tennessee is in better economic condition than most states, many of whom are struggling to stay afloat amid huge budget deficits.
Over the last three years, Tennessee has reduced discretionary spending by 21 percent.
Some of the highlights of the 2011-12 budget include:
• Funding for York Institute in Fentress County is included.
• $300 million will be used for medical inflation for TennCare and CoverKids; to fund the Basic Education Program; for state health insurance premiums and for state employee pay raises of 1.6 percent.
• There will be 1,180 fewer state positions — almost 90 percent of the reductions coming from eliminating unfilled positions and the projects tied to non-recurring state and federal stimulus funds.
• Provides for an average departmental reduction throughout state government of 2.5 percent.
• It restores $69.3 million to the Rainy Day Fund, the state’s savings account, increasing it to $283.6 million at June 30, 2011, and $326.6 million at June 30, 2012. (Before the economic downturn, on June 20, 2008, the fund was at $750 million.)
• $186 million in Economic and Community Development projects, construction of a new $7 million public intermodal facility at Port Cates Landing, which anticipates a $13 million federal grant and $10 million operating grant for the Memphis Research Consortium to encourage collaboration in research and strategy in the health field.
The proposed budget is based on a realistically conservative 3.65 percent revenue growth at $473 million.
Haslam asked the General Assembly to join him in reviewing the state’s boards and commissions to see whether 140 are necessary.
He noted the progress of Senate Government Operations Committee over the past 18 months in looking into the matter.
He also asked the General Assembly to examine how much state government authority through rules and regulations has been shifted to these agencies.
The budget proposal, also called the appropriations bill, now travels to the Finance Committees of both Houses for discussion there. The budget will continue to be a top priority for the remainder of this legislative session.
Education Reform Highlighted
Haslam’s State of the State address also highlighted his legislative agenda which includes several education reform measures designed to prepare students to compete in a globally competitive marketplace.
The proposals include removing the 90-cap limit on charter schools; use of lottery scholarships during the summer term to aid timely graduation from the state’s technical centers, community colleges and four-year institutions; and, teacher tenure reform.
“Every discussion we have about education should always begin and end with what is best for the child in the classroom,” Haslam said. “In education we are blessed with the tools to be game changers for all students. Better teachers; improved school leadership with great principals; standards of academic excellence; parental involvement and students who are challenged to learn – that can and will happen in Tennessee.”