Thursday, December 18, 2008

State departments get budget-cutting orders

Official orders multi-stage plans By Theo Emery • THE TENNESSEAN • December 18, 2008 State departments received new budget-cutting instructions this week, starting the clock on plans to reduce spending across many areas of government by as much as 20 percent. In a letter to agency heads and budget officers on Monday, Finance Commissioner Dave Goetz asked departments to prepare a multi-stage plan to reduce spending in response to falling state revenues, now estimated to be under projections by as much as $1 billion this year, and possibly $1 billion again next year. Goetz asked departments to first draw up a two-tiered plan to reduce spending by about 15 percent by Dec. 30. The first tier of reductions would be roughly 8 percent. The second tier of about 7 percent would be in case no federal aid is forthcoming to ease the state's budget crunch. After Dec. 30, departments must put together still another plan to cut 5 percent more, in case the state's financial situation deteriorates further. Most departments, but not all, will see cuts. Spending on K-12 education will not be cut, nor will scholarships and other awards from the Tennessee Student Assistance Corporation; salaries and benefits of judges, lawmakers and district attorneys general; Cover Tennessee health programs; and a few other areas.

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