Thursday, May 1, 2008

Bredesen: Budget cuts will include state worker layoffs

By ERIK SCHELZIG Associated Press Writer NASHVILLE, Tenn. (AP) -- Tennessee's deteriorating state budget situation will require an unspecified number of state employees to be laid off, Gov. Phil Bredesen said Wednesday. Bredesen, a Democrat, said he doesn't see a way to fill what has grown to be a $550 million hole in the budget for the upcoming spending year without cutting the state's work force. "You just can't get there from here without doing some layoffs as part of that," Bredesen said. The governor declined to say how many of the state's more than 45,000 employees could be affected. But he said the cuts would be in addition to the 160 positions he may have to eliminate at the Department of Children's Services because of a $73 million reduction in federal program funding. "I'm not talking about 20 people or something, I'm talking about some serious change in the number of people who are employed by the state," Bredesen said. "I just want to be honest with people and not give people any false hopes about where we are." Bredesen has asked to address a joint assembly of the Legislature the week of May 12 to lay out details of his proposal for spending cuts. The State Funding Board was scheduled to set final revenue projections for the current and upcoming budget years on Thursday. Jim Tucker, executive director of the Tennessee State Employees Association, criticized Bredesen's decision on the layoffs. "It irritates me that the first thought is to cut people," he said. Tucker argued that the state's $750 million "rainy day" reserves should be tapped to keep the layoffs from happening. "It's raining," he said. Bredesen has resisted tapping into the reserves because he doesn't want to spend the state's savings on recurring expenses - especially when the end of the downturn is not yet in sight. An earlier administration proposal to give state employees the equivalent of a 2 percent pay raise is no longer on tap, Bredesen said. "I wouldn't lay somebody off and give somebody else a pay raise in this environment," he said. The governor said the only area of the budget likely to be spared from cuts will be K-12 education. The budgets for state colleges and universities, however, are likely to be trimmed, he said. "Everything is on the table," state Finance Commissioner Dave Goetz said. "When you have this kind of hole open under your feet, you have to step back." Lawmakers had mixed reactions to Bredesen's layoff announcement. "We shouldn't have to lay off," said Rep. Mike Turner, D-Old Hickory. "I won't vote for the budget if there are layoffs." But House Finance Chairman Craig Fitzhugh, D-Ripley, acknowledged that it will be hard to escape the need for layoffs. "The cuts are going to have to be pretty significant, and where you get significant reductions is in people," he said. "That's the costly part of state government - I think it goes without saying that's going to have to be part of the consideration." House Minority Leader Jason Mumpower, R-Bristol, said he hopes the layoffs will be targeted. "I hope if that's the case, that we can target employees who may be close to the end of a full career who might appreciate some type of early retirement package," he said. Bredesen previously considered layoffs when he came into office in 2003 but did not implement them. His Republican predecessor, Gov. Don Sundquist, was forced to furlough about 22,000 state workers for five days in 2002 amid a contentious debate over a state income tax. The partial government shutdown became necessary after lawmakers failed to meet the constitutional requirement to pass a balanced budget by the July 1 start of the new spending year. Sundquist and Democratic Gov. Ned McWherter used hiring freezes to cut costs during lean times. McWherter also used retirement incentives to reduce the state payroll. Robin Smith, Tennessee Republican Party chairwoman, said in a statement that the layoffs reflect Bredesen's "wishful thinking approach" to state spending. She said this year's budget "was based on a fiscal fantasy that the economic boom would never end." --- Associated Press Writer Lucas L. Johnson II contributed to this report.

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