Tennessee state agencies prepare for 5 percent budget cuts

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9/2/11, "Tennessee's state agencies told to prepare for 5 percent cuts," KnoxNews, Tom Humphrey

"Tennessee state government agencies have been told to prepare for a 5 percent reduction in their spending of state dollars next year, a move that will follow a recent outline of how they would deal

• with a 30 percent loss of federal dollars.

In a letter to all executive branch departments, Finance Commissioner Mark Emkes also said that no new or expanded funding — with a few exceptions — will be allowed by Gov. Bill Haslam's administration unless the new costs are offset with further cuts elsewhere in their budgets....

About 40 percent of the $30 billion state budget for the current fiscal year comes from the federal government. The rest is in state dollars, though some is from earmarked sources that will not be covered by the new reductions, such as college tuition, and license fees.

The 5 percent reduction will amount to about $270 million, Emkes said.

While the reduction in federal dollars is speculative and intended in part as a way to show credit rating agencies that Tennessee is prepared to cope with a major loss of federal funds, the 5 percent reduction of state dollar spending is far more likely to occur.

Emkes says in a letter to state departments that, even if state revenues grow 3 percent as projected, the state dollar cuts will be necessary.

"Therefore, I am kindly requesting that each state agency submit base budget reduction plans in three parts," Emkes wrote....

The letter says that K-12 basic education funding, pre-kindergarten, "agencies funded by dedicated taxes and fees" and increased spending mandated under current state or federal law will be exempt from the requirement of making cuts to offset any increased spending.

Several programs are specifically mentioned as "held harmless" from the general rules, ranging from college scholarships to annual cost-of-living pay raises for judges, and the CoverKids, CoverRX and AccessTN health care programs.

Legislative leaders have generally praised Haslam for asking state government departments to plan for cuts in both federal and state spending."...

via Instapundit