Sailing rough budget waters Tennessee Gov.-elect Bredesen considers furloughs, layoffs, cuts

NASHVILLE — Democratic Gov.-elect Phil Bredesen said employee furloughs and layoffs coupled with across-the-board department cuts will be "on the table" if that’s what it takes to balance the state budget.

"Obviously, the state is once again in a more serious situation than anyone realized in September, October or November," Mr. Bredesen told the Chattanooga Times Free Press last week during an interview at his Nashville office.

"The fact that the revenue estimates were too optimistic, combined with the TennCare issue, those are two significant, multihundred-million-dollar hits to the budget," he said. "I would have thought on July 15 that at least the ship was off the rocks and we had enough money to continue as we were. That clearly is no longer the case."

State Funding Board officials said in December that collections from the 1-cent sales tax increase could fall about $100 million below projections.Meanwhile, expenses threaten to grow. TennCare reforms to remove up to 200,000 people from the health care program remain on hold pending an appeal of a lower court ruling, and U.S. District Court Judge William Haynes last month stopped the disenrollment of Te nnCare recipients. If the decision is upheld, it could cost the state as much as $300 million.

Mr. Bredesen takes office Jan. 18. He’ll have until March 1 to present his budget for fiscal 2003-04, which begins July 1. The adverse turn of events means the ship of state "is still on the rocks," Mr. Bredesen said.

"It’s clear there are going to be some sacrifices this spring as we go through the budget," he said. "My obligation is to submit a budget that is balanced with the resources available. It’s not a tax-increase budget like the last one. That is going to mean some serious belt-tightening. The issue of furloughs and layoffs is on the table. The idea of across-theboard budget cuts for each department, as many other states have done in this environment, is on the table."

State Senate Republican Caucus Chairman Ron Ramsey, of Blountville, said he agrees, by and large, with Mr. Bredesen’s comments, but was surprised the governor-elect was warning of potential layoffs and furloughs before he takes office.

"If we’re able to continue to cut the rolls in TennCare, I don’t think that will be necessary," he said. Gov. Ned McWherter and Gov. Don Sundquist imposed hiring freezes but no furloughs or layoffs during their tenures. In 1986, Gov. McWherter offered retirement incentives to state employees.

Sen. Ramsey said the pending federal court decision on TennCare could make or break the session. "TennCare is the 800-pound gorilla," he said. If the state cannot remove people from the TennCare rolls, then "you’ve got a $250 million problem," he said. "That is huge depending on which way it goes."

Mr. Bredesen said "a lot of sitting governors regard the Legislature as ‘the enemy.’ There are issues out there upon which Democrats and Republicans can agree." He said he believes Tennessee lawmakers "are looking for a different paradigm in how to work with a governor."

Sen. Ramsey predicted Mr. Bredesen’s relationship with the General Assembly, at least for the first year, will be good. "Whether you’re the new governor or the president of the United States, you come in with probably the first session as a whole being a honeymoon period unless something major happens that I don’t foresee right now," Sen. Ramsey said. "But there will be a honeymoon if he presents a budget, as he says, that lives within the revenues."

A quick budget resolution is the best first step toward a good relationship, he said. "The perception is out there that we can’t adopt a budget that is balanced quickly," he said. "So, if we can do that quickly and be out by the end of April, the first of May, the public would have more confidence not only in the legislative branch but also with the administration."

He also advised the new governor to "keep an open line of communication with the Legislature." "We may disagree from time to time. But as long as we are communicating, and we know what those differences are, we’ll be fine," Sen. Ramsey said.

On other issues, Mr. Bredesen said he believes the teacher pay equity issue can be managed. "As I understand the court order, it doesn’t require the pay to be equalized. It requires the BEP (Basic Education Program) to take into account the cost of hiring teachers in those different districts, which to me is an important difference," he said. "I believe that, from conversations I’ve had informally that the plaintiffs, they understand this is something that is going to take place over three, four or five years and not in one year, when we don’t have the money. If the whole price tag is $150 million over four years, that’s around $40 million a year, which is a much more manageable figure."

Mr. Bredesen said he expects a role in establishing a state lottery, although "I understand I’m coming in at the end of the game." "I’ve talked with (state Sen.) Steve Cohen at length about this and what we’re trying to accomplish. Specifically, we talked about the idea of making the money go further by having some sort of means testing. We both feel that is the right way to do," Mr. Bredesen said. "He clearly has an interest in not spending every dime on the higher education piece, by being able to do some of the preschool and capital improvement pieces." Sen. Cohen sponsored the state’s lottery bill.

On medical malpractice insurance, Mr. Bredesen said, "It’s hard to find a malpractice case in Tennessee where there is some outrageous award. What’s happened is people have seen what’s happening in other states and thought maybe that will happen in Tennessee."

Sen. Ramsey said the issue could be a point of contention between the new governor and Republican lawmakers "because traditionally the Democrats side with the trial lawyers. "We can see what is happening in other states, and we don’t want to get in a position where doctors are going on strike and leaving the state, so I think we need to look at that to make sure we never get into that situation."

Mr. Bredesen said he intends to travel throughout Tennessee. "It’s really important to get out of Nashville, get away from the insider stuff and the hothouse up here and talk to people," he said. "Sometimes, it’s uncomfortable because you go to the Rotary Club and a lot of people don’t like what you’ve got to say. But I just think that is the job. To me, the job of any leader has got to be communicating with the public."

Yep, millions to line his buddies pockets. He also took a REAL EXPENSIVE $100G+ vaccation to Europe on our dime.

This equal teacher funding is a SCAM

Teachers' Salaries - Not What You Think

David Coffey, October 9, 2002

Chances are you think the Tennessee Supreme Court ruling on teachers' pay will cost the state an additional $450-$500 million. That's what plaintiff attorney Lewis Donelson wants you to think.

Not necessarily.

There are widely ranging estimates that it will cost from $12 million to $500 million depending on how the Legislature solves the problem.

The constitutional requirement is not for equality in teacher salaries, but rather for "substantially equal educational opportunity." That seems fair.

In fact, Justice Riley Anderson handing down the opinion noted, "The objective of teacher salary equalization is to provide substantially equal opportunities for students, not teachers." (www.tsc.state.tn.us)

Wait. Read that again. Is it about equal teacher salaries or about students? It reads both ways.

But Anderson spells out that "nothing in the law prevents a local school district from supplementing teachers' salaries from its own [funds]." This clearly means that many school systems will choose to pay top dollar and still draw the best teachers. He gives the example of Oak Ridge teachers in 1997 with an average $42,268 while nearby Monroe County paid $28,025, a disparity of $14,243.

So if the disparity is to remain what is the point of the opinion? It comes down to a requirement that the state-funded portion of the teachers' salaries must be reviewed annually and adjusted for costs.

Costs vary by region of the state. For example, the cost-of-living varies by 16% among communities (Tennessee Advisory Commission on Intergovernmental Affairs).

Also, the cost to hire and retain a teacher would be different in Chattanooga, competing with higher paid Georgia teachers, and in West Tennessee where lower paid teachers in neighboring Mississippi, Arkansas and Missouri might cross over.

Now you begin to see the essence of the Court ruling and that it can be satisfied in many ways at many different levels of cost. Teachers' salaries could even go down if the Legislature chooses. Justice Anderson states, "It is not the business of the courts to decide how salaries are funded or at what level teachers should be compensated, for it is the legislature who 'speaks for the people on matters of public policy' such as these."

But salaries will not go down. Competition between the states will assure that Tennessee stays balanced in pay. Currently, adjusted for the cost-of-living, we pay more than our neighbors MS, MO, AR and KY, and less than GA, NC, VA, and AL. (www.aft.org/research/survey01/tables/tableI-7.html) That's balance.

Curiously, the Court did not deny the state's defense that no harm had been done by the present system.

"According to the intervenors' claim, teacher salary disparities have decreased since 1995 when [the previous suit] was decided. In addition, the intervenors allege that student-teacher ratios in the plaintiffs' districts are now lower than the statewide average, and that teachers in the plaintiffs' district have, on average, only about one year less experience than teachers elsewhere in the State. They also claim that student graduation rates and test scores are now about the same, and in some instances better, than statewide averages, and that drop-out rates for students in the plaintiffs' districts are less than the statewide average. The intervenors therefore argue that the plaintiffs are no longer deprived of substantially equal educational opportunities."

Wow! That speaks powerfully for the need for little change. Now let's see what the Legislature does in resolving the controversy. Sounds like fun and fireworks.

Friday's Oak Ridger, save the article. December 27, 2002

David Coffey: As new year dawns, legislative wheels begin to turn

Nobel Laureate Milton Freidman says this about government:

"When a man spends his own money to buy something for himself, he is very careful about how much he spends and how he spends it.

"When a man spends his own money to buy something for someone else, he is still very careful about how much he spends but somewhat less what he spends it on.

"When a man spends someone else’s money to buy something for himself, he is very careful about what he buys but doesn't care at all how much he spends.

"When a man spends someone else's money on someone else, he doesn't care how much he spends or what he spends it on."

With Christmas complete and a new legislative session only weeks ahead, Freidman's comments are timely.

Tired, retired and defeated legislators are already gone. After years of heated debate over impossible income tax budgets, many were ready to just stay home. Others retired considering their ages and the strain of legislative sessions. Some were defeated in the election, but many wisely chose not to run after showing their willingness to vote for an income tax.

The newly elected assumed their offices Nov. 6, immediately after the election.

It's a bright, hopeful new day in Nashville -- new Governor Bredesen, his commissioners and the 103rd Tennessee General Assembly have gigantic chores confronting them. Consider a few: TennCare, higher education, teachers’ pay equity, medical tort reform and the ubiquitous budget debate.

The departing Sundquist administration thought they had brought TennCare under control. But no, a federal judge played Santa and reinstated all who had lost their coverage by failing to show that they are qualified for the benefits. The ruling, if upheld on appeal, will cripple the new state budget with an unexpected burden of more than one-half billion dollars!

Many teachers are expecting a windfall from the State Supreme Court ruling on teacher pay equity (www.tsc.state.tn.us - see Court Opinions, 4th quarter 2002). Maybe they should read the fine print: "The objective of teacher salary equalization is to provide substantially equal opportunities for students, not teachers." The ruling also explains: "It is not the business of the courts to decide how salaries are funded or at what level teachers should be compensated, for it is the Legislature who speaks for the people on matters of public policy, such as these’" Let the legislative battle begin.

So the bright new day in Nashville is tempered with the rumblings of tanks over the horizon. The battle for your tax dollars is about to begin anew.

The record state tax increase of 2002 is already looking strained under calls for more money for health care, higher education and K-12 education.

The fascinating debates of a democracy in action are poised to hit the headlines again. It's the American way. David Coffey is an Oak Ridge businessman and a former member of the Tennessee House of Representatives.

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