Don’t get cold feet on cutting budget

By Senate Majority Leader Mark Norris

Editorial / Tennessean / May 18, 2010

Balancing the State of Tennessee’s annual budget is more of an art than a science. Doing so, while simultaneously nurturing a fledgling economic recovery, demands discipline and determination.  It takes discipline to stick with the four-year plan presented by the governor and passed by the General Assembly last year and the determination to balance our budget without raising taxes.

This year, during his state of the state address on February 1, the governor urged us to stay the course. “We have a good plan,” the governor said, “and I think it is important that we stick with it and not get our heads turned by the possibility of more one-time money.” He likened it to the family budget, “the way sensible families have to manage through these times.”

Despite this admonition, last Thursday, the Commissioner of Finance and other Administration officials rolled out a revised budget that does not “stick with” the plan. It raises the sales tax, taxes cable television subscribers, and increases your driver license renewal fee by almost 50 percent. It fails to fully fund education and reflects the termination of more state employees.

Strangely, despite the elimination of more than 2,000 state jobs, the budget includes a three percent bonus for state employees totaling $160 million for those remaining employees.  Given the recent natural disaster, could this sum not be better spent, if at all, on the recovery?  For example, a one-time match for disaster relief could help local officials avoid tax hikes at the city and county level.

Republicans preferred the original plan, or something closer to it, and we have long advocated a more “reality-based budget.” Giving state employees a bonus now, when many state workers and Tennesseans in the private sector are unemployed, seems unrealistic. The Leaf-Chronicle editorialized against it last week: “When it comes to balancing the budget, there are no easy answers. But bonuses during a bad economy are an expense the state would have difficulty justifying to the taxpaying citizens.”

Unemployment is widespread in Tennessee, running up to 20 percent in some counties.  There are not many private sector industries or small businesses in the state that haven’t felt the impact of the economic downturn.  Whether it is closures, layoffs, pay cuts, benefit cuts or other tough measures, businesses across the state have made the necessary, but never easy, changes to try and stay afloat.

In March, the Tennessean itself reported that personal income in Tennessee had declined for the first time in over 60 years: “Tennesseans saw their personal incomes slide lower in 2009 for the first time in 60 years, a reflection of lost jobs and companies taking cost-containment measures such as furloughs and salary cuts.”

Is this really the time to raise taxes? Is it time to tax Tennesseans at their television sets?  Is it time to give bonuses to state employees?  What kind of family budgets like that?

Last week, Senate Finance Chairman Randy McNally presented for discussion an alternative proposal backed by Republicans designed to offset the governor’s tax increases by cutting spending rather than raising taxes.  Although it cancels the state employee bonus, the plan does not include massive lay offs or sweeping pay cuts for state employees.   This is not unprecedented. During the recession of the early 1990s, even Democrat Governor Ned McWherter put pay raises for state employees on hold for four years.

The Republican proposal continues funding essential educational and safety programs and cuts the deficit between recurring and nonrecurring dollars by more than half – still well within the spending plan adopted last year and originally advocated by the governor in February.  It is a disciplined approach to economic recovery.

Unlike many other states, Tennessee has resisted the temptation to spend beyond its means. If we are to continue to be fiscally responsible, we must be determined to stay the course.  Saying no isn’t always easy, but it is often necessary.


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