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Wednesday, February 03, 2010

Proposed budget talking points

Here is a brief rundown on the governors proposal for a budget.

2010 Budget Highlights

General Appropriations Bill Overview

• The budget will decrease by 5-6%. This includes:
o $400 million in recurring reductions
o $200 million in recurring reductions in TennCare
o $64 million reduction in higher education
o $16 million recurring reductions in Child Services
o $20 million recurring reductions in non-BEP K-12 funds (Capital projects)
• $200 million in one-time money from Rainy Day Fund and TennCare reserve
o This money will fund various programs for a 2 year period
 Examples: Family Support Services, Coordinated Health in schools
 Roughly 40 programs impacted
 Because there is approximately $800 million in the Rainy Day Fund and TennCare reserve combined, this reduction will leave about $550-$600 million in reserves
 Most of the money is coming from TennCare reserve
• The Department of Safety was prepared to reduce state troopers in 13 rural counties. This will be avoided by:
o A proposal to increase the cost to renew a Tennessee driver’s license.
o Proposal will increase DL cost from $19.50 every 5 years to $46 renewal every 8 years.
 Driver’s license renewal fee has not been increased since 1988.
o In addition, the Dept. of Safety will use the proceeds to purchase new radio equipment
• There will be $47 million in growth for the BEP formula
• $82 million in growth for the Tennessee Consolidated Retirement System to shore up the fund
• TBI will begin charging lab test fees (even to local governments)

Technical Corrections Overview

• Bill will increase revenues by roughly $50 million. It includes two parts:

1. A sales tax on the first $15 of cable TV service Cable is currently taxed at 8.25 percent of the amount over the first $15. Boxes are not currently taxed, only the service. However, it appears satellite TV is taxed at 8.25% as well, but without the $15 exemption
a. Cable providers tax on equipment
2. Tax on real estate investment trusts (REITs)

Additional information:

• $10.9 million one-time money for land conservation
• The budget is crafted from the highest end of the revenue figures adopted by the Funding Board (1.9 growth rate)
• State revenues have plummeted (for a record 19 months)
• BEP is fully protected/fully funded (K-12 is 15% of budget)
• State employees will receive one-time 3% bonus
• As presented, TennCare would be 24% of the total budget (as compared to 34% in 2004)

1 comment:

  1. Cut it more. No rainy day fund. No fee increases


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