by Mark Bellinger
NASHVILLE, Tenn. - Tennessee Governor Bill Haslam said he not giving state employees and teachers a pay increase.
Haslam said he is making several cuts from his original budget proposal because of continued declining tax collections. The Republican governor discussed his budget proposal with reporters on Monday.
The leadership in the Tennessee House and Senate met with Governor Haslam's Finance Commissioner Larry Martin Monday afternoon to hear the bad news.
He said revenues are off this year $150 million and next year, the projected short fall is $160 million. It means millions of dollars in cuts, including a $72 million dollar cut eliminating raises next year for teachers and state employees.
"This is just a tough fiscal year, so we're doing the correct thing. We're cutting the budget. That's never easy to do," Republican Tennessee House Speaker Beth Harwell said following the meeting. "It's difficult, but that's what separates us from Washington D.C. We do it."
This past Thursday, Governor Haslam hinted touch choices were on the way.
"Our job is to again try to create the revenue and then control expenses, and when we present the budget amendment it will get a little more difficult," Governor Haslam said. "I'll always think the budget is the biggest challenge, because I always think it's the most critical thing. Budget drives policy and policy drives everything else. That's number one, two and three for me."
He said this year state agencies will use reserve funds and cuts to balance their budgets.
Next year's biggest cuts include: pay increases to teachers and state employees totaling $72 million, a TennCare provider rate reduction of $18.5 million, contract reductions to Families First vendors totaling $4.75 million, reducing the BEP Growth Fund $5 million and decreasing funding for higher education by $12.9 million.
"You know hopefully, I would hope higher education will make these reductions in salary increases and reductions in state overhead costs that would certainly be my hope," said Speaker Harwell.
"It's a difficult process. We're going to have to take a look in great detail as to what's going on, and there may be some other options. into what's going on. We'll just have to see," said Senate Democratic Minority Leader Jim Kyle of Memphis.
State finance officials are scheduled to present the measure to legislative finance committees on Tuesday, April 1, 2014.