TENN: Legislature tempted to dip into two 'sacred' funds

The Tennessean ^ | 1/6/03 | Duren Cheek

[GailA]

Faced with a potential $400 million teacher-pay problem, a potential $300 million TennCare problem and a new tax system not living up to expectations, state lawmakers may try to carve into a couple of sacred cows to balance next year's state budget.

[GailA]

http://www.tennessean.com/government/archives/03/01/27352637.shtml?Element_ID=27352637

Budget could force job cuts, Bredesen says

Associated Press

CHATTANOOGA — Gov.-elect Phil Bredesen says employee layoffs coupled with across-the-board department cuts will be ''on the table'' if needed to balance the state budget.

''Obviously, the state is once again in a more serious situation than anyone realized in September, October or November,'' Bredesen told the Chattanooga Times Free Press in an interview published yesterday and conducted last week 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.

''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.

State officials have said it could cost as much as $300 million this fiscal year if the state does not get a favorable ruling in a current TennCare court case.

A federal appeals court panel in Cincinnati last Thursday issued a temporary order that keeps about 200,000 people off TennCare. On Wednesday, the appellate judges will hear state attorneys argue why the order should be made permanent.

Bredesen, former mayor of Nashville, takes office Jan. 18. He'll have until March 1 to present his budget for fiscal 2003-04, which begins July 1.

The turn of events means the ship of state ''is still on the rocks,'' 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-the-board budget cuts for each department, as many other states have done in this environment, is on the table.'' ........................... State layoffs, deep budget cuts lie ahead, Bredesen says Knox News

[GailA]

Bill Hobbs

by Bill Hobbs

If you have documented proof of the pro- or anti-income tax leanings of the remaining members of the tax panel appointed by Sunquist, Wilder or Naifeh, please send that information here. My email address is listed in the right-hand column. The more members "outed" as pro-income tax, the less credible the commission's final report will be to the general public.

I've posted more commentary on the tax study commission at Polstate.com including why I think the July 1, 2004, deadline for the commission to issue its report is good timing for opponents of the income tax.

[Blood of Tyrants]

Same crap, different year. Despite a $1 BILLION tax increase, they STILL cry about not having enough. Will they EVER have enough?

[Imal]

Tennessee, huh? That's Al Gore's state.

Mr Gore, we need a LOCK BOX!

[JDGreen123]

Ha Ha! We do not claim Citizen Gore. He was born in Washington D.C. and has spent his entire life there. He drops by here occasionaly to woo yellow dog Democrat votes but his sway over them is also on the wane. He should have plenty of time now to invent everything we need i.e. a replacement for the most evil invention (according to Al): th internal combustion engine.

[DannyTN]

Medicare and Medicaid discriminate in the same way against rural areas that Tennessee did with teachers. They pay a lot less for the same procedures if you live in a rural area. I guess the urban areas have more votes.

Another thing that drives Medicare and Medicaid costs up is they focus on where cost increases have been, instead of on how to most effectively give care.
Consequently they have been cutting home care payments because this benefit has grown dramatically since being introduced.

But what they don't realize is that home care prevents hospitalizations and nursing home stays and the cost of home care is very small relative to the cost of the alternatives.

[dirtboy]

But court orders on teacher pay and TennCare must be followed, and the money those orders will require has to come from somewhere.

Amazing that the state which produced Andrew Jackson can't figure out the answer here - tell the court in question to provide the money. Now THAT would be fun to watch.

[DannyTN]

There is no such thing as a lockbox.

You either invest the money or you don't.

If you don't invest the money it loses purchase power due to inflation. If you invest the money, where are you going to invest it. The safest place in the world is considered US government securities. And that is where they put it.

So understand this. All of the social security funds are put into US governent securities. Thats right. The government borrows all of the funds. There never has been anything but a big IOU from the US government.

And there is really not an alternative. You can put it into riskier assets such as corporate bonds and stocks. You might get a higher return, but you also get more risk.

There is no such thing as a lock box. Al Gore Inhaled.

And to create one would be tantamount to burying the funds in the ground and getting 0 return. It would make the funding problem worse, not better. Not only would there be fewer social security dollars because of a 0% return instead of the current 2-3% return, but it eliminate a significant piece of demand for US securities forcing the government to pay higher interest on it's borrowings.

[DannyTN]

It would be fun to tell them the court to come up with the money, yes.

But we might not like the results. Do you really want a court instead of the legislature deciding how we are going to be taxed?

[DannyTN]

One possibility for the teacher pay problem is to shift teachers. Shift some of the higher paid teachers out to the rural schools and shift some of the lower paid teachers in to the urban schools.

That could help equalize the schools without costing the state dollars.

[Coto]

Ain't it the Truth !! !!

Sure is funny - how things are already fallin' into place.

Someone FINALLY has the intestinal fortitude to do some serious work on TENN-Care and - magically - a Federal Judge/Legislator orders that to stop.

Any wagers on when the new Income Tax Chants will be heard on Charlotte ??
(...course...I'll be back there, with the rest of y'all, chantin' against it, too !! !!
I'm the one you used to know as the Alabama Wild Man )

[dirtboy]

But we might not like the results. Do you really want a court instead of the legislature deciding how we are going to be taxed?

That's the entire point of the exercise - the legislature reminding the court that it holds the power of the purse.

[DannyTN]

I think I agree with the court here though.

The rural areas get the shaft because they don't have as many votes, but when it comes to schools there is no reason they shouldn't have access to the same level of education as the big cities.

The legislature can level the pay without bringing the rural teachers up. It's just a much nastier decision to do so.

Same thing in Medicine. The Federal government pays 10%-15% less to treat a patient in a rural setting. But the cost of providing the care is probably more than providing the same care to the patient in the city setting.

I'm not advocating paying more for rural schools or care than you would for the city, they should be equal.

[JDGreen123]

I guess you know about the new anti-crusing laws in Nashville. They extended it up to the Capitol. Everyone knows they put the law in to prevent the horn brigade. It could get ugly next time.

[JDGreen123]

Good historical humor! When Jackson defied the Supreme Court I believe he said something like: "I have an army and the Court dosen't. Let them try to enforce their law." Judges today have become in reality dictators with no means for removal of most.

[JDGreen123]

Of course one idea is that rural counties could raise their property taxes to be in line with Nashville & Memphis. I think each county should let its voters decide how much to invest in education. People within that county know better than anyone what if any extra funding is needed. If they vote for the funding, it comes out of their pockets.

[Timesink]

But court orders on teacher pay and TennCare must be followed, and the money those orders will require has to come from somewhere.

No they don't. Simply ignore them. Who's going to enforce them?

[GailA]

NO Not until they have every last dime you make.

[GailA]

Read about this teacher pay scam here (it's down several post) HERE

[Blood of Tyrants]

Not until they have every last dime you make.

And you are in chains.