Table of Contents

 About The Author

 Introduction

 The Problems

•   Uncontrolled Spending
•   Sum Sufficient
•   Duplication of Services
•   TennCare
•   Legislative Liaisons
•   Incremental Budgeting
•   Bond Indebtedness

 The Solutions

•   Don't Just Throw Money At Education
•   Expect Those Who Use Higher Education To Pay Their Fair Share
•   Plug The Leaks in TennCare
•   End Revenue Projections
•   Cut Unnecessary Capital Appropriations and Improvements

 Total Savings This Year

 Reference Notes

About The Author

Introduction

To understand the current budget situation you must first understand how we got to this point.  Just like in your own personal budget, repeatedly overspending your means inevitably catches up with you.  You may get lucky with a one-time windfall here and an accounting trick there but eventually the day of reckoning will come.  That day is here.

Far too many people have come to look at the government, including state government, as the first resort for their problems instead of the last resort.  Time was when one came to the government only after all other avenues were exhausted.  The government, whether it is local, state, or federal, was never intended to take care of its citizens' every desire and whim.  Government is there to do what the private sector won't, can't, or shouldn't do.  When you think of government in those terms, its scope is easy to contain.

In an article in the Union City Messenger from April 2, 2001, State Representative Phillip Pinion was admonishing the Nashville media, and talk show hosts in particular, for misrepresenting the truth about the state budget.  When Mr. Pinion entered the legislature in 1989, he says the budget was $7 billion.  The current budget, FY2000-2001 spends $18.9 billion, an increase of almost $12 billion, or more than two and a half times what it was in 1989.  Mr. Pinion reasons that a dollar in 1991 is only worth about 74 cents today.  With that logic he asserts that the General Assembly is actually spending less money than they did when he came into office.  "We're running the state on $800 million less today than we were 10 years ago. But why won't that bunch in Nashville say so on talk shows?" he wondered.  Well, Mr. Pinion, because that just isn't true.  Your numbers simply don't add up.

The easiest way to figure government spending is to look at it on a per capita basis.  In other words, how much is the state spending per person in Tennessee.  When Mr. Pinion joined the legislature in 1989, we were spending $1,435 per resident.  When you factor in inflation from the past eleven years, we should be spending $2,014 per person if the governors and General Assembly over the years had been good stewards of our money.  But, they have not.  The current budget spends $3,501 per person or 74 percent above inflation and population growth compared to 1990 dollars.1  Since many in the state like to compare us to our sister state to the east, North Carolina, their 2000-2001 budget spends $3,011 per person while Tennessee spends $3,323 for the same fiscal year.2  Since 1995, North Carolina has also managed to reduce taxes on its citizens by $1.4 billion while we continue to look for new ways to tax.

So, why haven't we done something to curb the appetite for spending.  We did, back in 1977.  Our state constitution was amended to force the General Assembly to tie the rate of growth in the budget to the growth of the state's economy.  Each year, by law, the governor's proposal must include "Tennessee Personal Income" and its rate of growth compared to the previous year along with appropriations growth from the previous year.  According to law, appropriations cannot grow at a faster rate than Tennesseans' personal income.  In the current budget, Tennessee Personal Income rose 5.45 percent yet appropriations rose 13.14 percent!3  Beginning to see the problem?  By now you're probably wondering how they manage to outspend our prosperity if it's written into law that they can't.  Well, there's a little escape hatch that the General Assembly built into the law.  It says: "No appropriation in excess of this limitation shall be made unless the General Assembly shall, by law containing no other subject matter, set forth the dollar amount and the rate by which the limit will be exceeded."4  You see, all they have to do is amend the law. Pretty large hatch, indeed.  As you might imagine, the General Assembly has seen fit to amend this law and spend more money than they're supposed to 10 times over the past 22 years.  The amount of overspending has ranged from just 0.84 percent over budget to 15.09 percent over budget.5One of the ironies is that advocates of a state income tax argue that the income tax is a more stable source of revenue when, by law, our spending is already tied to "Tennessee Personal Income."  Even if we had an income tax, spending has exceeded what that tax would have brought in because 10 times they've voted to outspend the state's prosperity.

Now that we're in this fix, the next logical question is how do we get out of it.  There are some major areas that have to be addressed which you'll find summarized by section below.  For simplicity's sake, this analysis is broken down into two sections: The Problems and The Solutions.  You'll find a dollar figure at the end of each solution section with a grand total of money saved at the end.  There are many roads leading to a balanced budget.  This analysis, by no means, professes to be the only way.  But after reading this analysis, there should be no doubt that there's absolutely no need for new taxes or "tax reform," as some have phrased it.  The crisis, if there is one, is a crisis of overspending, not under- taxing.

The Problems

Uncontrolled Spending

Now we find ourselves back in uncertain economic times.  Once again the Governor and the Leadership of the General Assembly are decrying a looming financial emergency.  At a time of so-called "budget crisis," the Governor manages to come up with a new program for K-12 education that would spend close to $100 million, in addition to teachers raises and other education improvements, ostensibly to teach kids how to read and get kids into state-run daycare by age 4.  All the studies I've seen indicate that we need more parental involvement in the lives of our young children, not more government involvement.  It isn't too much to expect that our schools teach our kids something as basic as reading without having to cough up an additional $100 million.

The newspapers regularly remind us that we face an $800 million shortfall.  What they don't tell you is that the Governor's proposed budget increases spending this year by more than a billion dollars.  The Tennessee budget has increased over the last two years by 20 percent!  Instead of reigning in spending, a budget crisis is declared and state services, especially those to children, are threatened.  It is a shameless ploy which has been perpetrated upon the people of Tennessee one time too many.  Having been frightened into more and more spending with little or nothing to show for it, the citizens of Tennessee have finally called the government's bluff.  Instead of blindly signing a blank check, they are, at long last, calling for some accountability.

They've noted that in the midst of this "budget crisis," the Governor has promised Memphis that we'll spend millions of tax dollars to secure a professional basketball team.  We seem to be wallowing in debt with a hopeless future, school kids facing the prospect of catastrophic consequences. That is until someone mentions professional sports.  Then, all of a sudden, we have plenty of money, enough to accommodate their every need.  The key business involved in bringing a team to Memphis, FedEx, makes $19.4 billion per year.6  That's about three times what Tennesseans pay in taxes each year!  I have a lot of respect and admiration for FedEx.  They are pioneers in their field and we're proud they call Tennessee home but they hardly need state assistance to secure a professional basketball team.  Here we have a company worth more than the entire state of Tennessee asking the taxpayers to fork over hard-earned tax dollars to help them make more money.  What's even more outrageous is the Governor has agreed without even blinking!

This matter of warped priorities is nothing new.  A couple of years ago, the Governor and General Assembly leaders cried "budget crisis" while planning to spend $20 million on new golf courses. When called on the carpet over it, their response was, "well, it's bonded," meaning they would pay for it over 30 years.  That's supposed to make us feel better?  In a so-called time of crisis, the state government is putting golf courses on the credit card.  Instead of paying $20 million we would end up paying more than $30 million.

The plans for extravagant spending are far from over.  My sources inside state government tell me that the next big push from the Governor will be "Universal Lunch."  That's a progressive way of saying the state will provide free lunch for every school child in Tennessee, regardless of income level.  School lunch is already a bargain.  There's no reason why those who are able to pay should have the government foot the bill.

If you still are not convinced that our problem isn't runaway spending, just take a look at some of the departments and their increases in spending in the last ten years.  There is no excuse for the excessive spending and nowhere to hide from the truth that we have a spending crisis and not a budget crisis.

Departments of the Tennessee State Budget
Percentage of increase from Fiscal Year 1990 to Fiscal Year 20007

• K-12 Education - 83%
• Higher Education - 82%
• Health and Social Services - 213%
• Resources and Regulation - 178%
• Debt Service - 118%

General Government - 119%

Keep in mind that these massive increases were during a time when inflation was averaging about 3 percent per year.  As you see, some segments of state government rose an average of more than 21 percent per year!  Clearly this is why we find ourselves in a pinch now.
 

Sum Sufficient

According to a source inside the budgeting process, many departments and agencies inside Tennessee State government operate on what's known as a "sum sufficient" basis.  What this means is that the finance commissioner has the discretion to "adjust" these departments' budgets as the need arises throughout the fiscal year.  This would account for some of the "unbudgeted dollars," as they refer to it, or surplus, as you and I would refer to it, being spent without the consent of the full General Assembly.  The tax revenue is "revised" several times throughout the year to reflect any change in tax revenue different from what was projected.  If the revenues are up then the projection is revised upward and some of this money, according to my source, is being spent via this "sum sufficient" process.  This may partially account for why the recommended budget for 2000-2001 was just under $18.3 billion when that budget was proposed.  However, that same budget, one year later, was estimated at over $18.9 billion, a difference of more than $600 million.  In other words, we proposed to spend one amount but ended up spending $600 million more, after the General Assembly had already signed off on that budget and ended their session for the year.  Without a vote by the General Assembly, over a half-billion dollars was spent.  This seems to be a recurring problem.  The recommended budget for 1999-2000 was about $16.5 billion but by the next year it was estimated at more than $17 billion.8  Indeed, tax revenues and federal contributions do fluctuate throughout the year from projections but this money should be held over to the next fiscal year.  It should never be spent in the middle of the year without the full consent of the General Assembly.
 

Duplication of Services

Like any government entity, there are ways to run it more efficiently.  Eliminating duplicate departments and services is one way to streamline state government and still get the job done.  In Tennessee, we have a Board of Regents and a UT System to oversee our higher education.  On top of that, the Tennessee Higher Education Commission is over both of those departments.  Surely these departments could be consolidated and still provide the same services.

We have a State Department of Personnel which is designed to handle the personnel needs of state government.  Why, then, does each state agency have its own Department of Personnel?

The Council of Juvenile and Family Court Judges provides, among other services, training for juvenile court judges.  However, juvenile court judges are not state judges but county judges.  Any training for them should come out of county budgets.

The Commission on Children and Youth oversees the Department of Children Services yet their objectives are basically the same.  Another layer of bureaucracy could be eliminated by combining these two departments.

These are just some examples of what appear to be government inefficiency.  Unfortunately, for this analysis there is no way to quantify how much could be saved by consolidating some of these bureaucracies. We need to take a serious look at consolidating these parts of the government instead of accepting them year after year only because that's the way we've always done it.  When it comes to spending the taxpayers' money we should question everything.
 

TennCare

TennCare is the big monster that everyone keeps coming back to budget after budget.  It consumes an ever-increasing slice of the budget pie each year.  Its supporters claim that it is more efficient than the old Medicaid program it replaced and on that point they are correct.  On a per-patient basis, TennCare holds its own against most any other system in the country.  Here's the problem.  We have far too many people on it in Tennessee.  Let's take North Carolina, for example.  Their population is 70 percent larger than ours yet we spend more on TennCare than they do on Medicaid.  Their poverty rate is higher than ours, 13.8 percent compared to 12.79, yet almost 1 in 4 Tennesseans is on TennCare10 while only about 1 in 10 North Carolinians is on Medicaid.11  To put it in simpler terms, North Carolina is 70 percent larger but Tennessee has 55 percent more people on public medical assistance. Their system is also county administrated and state supervised, giving more control to the local agencies, but one can argue that this creates another layer of bureaucracy, making the whole system more inefficient.  The truth is, North Carolina spends considerably more per person than Tennessee.  The problem with Tennessee, plain and simple, is there's a disproportionate number of people on the program.  Recent data available on Medicaid and poverty rates show that about 86 out of every 100 poor residents nationwide receive Medicaid.  In Tennessee, that number is a shocking 151 recipients of TennCare for every 100 poor residents.12  You need look no further than that figure to understand why TennCare is breaking the state.
   

Legislative Liaisons

When a committee overseeing a department wants expert advice on the needs of that department they turn to what's known as a legislative liaison.  This person is nothing more than a lobbyist for that particular department.  Their vested interest is solely in seeing to it that the department gets as much money as they possibly can.  A legislative liaison cannot make an objective judgement because they work for that particular agency yet they are routinely called before committees as an "expert."  An objective evaluation of each department from a third party is essential in stripping back the layers of bureaucracy and making sure government runs more efficiently.

One of my sources inside the budget process revealed that budget requests from department heads are seldom, if ever, turned down by the finance commissioner.  Department budgets are virtually rubber-stamped and become part of the governor's budget.  Any effort on the part of General Assembly committees to ferret out waste is usually blocked by the so-called expert, the legislative liaison.  This legislative liaison would have less clout if each department prepared its budget as prescribed by law, which brings us to the next problem.
 
 

Incremental Budgeting

There are many different ways to formulate a budget.  One of the least desirable yet most widely used type of budget is called incremental budgeting.  Encyclopedia Britannica characterizes this method in the following manner:

This is a defeatist path taken when budgets become too unwieldy to manage.  It opens the door wide open to corruption and waste since there's very little accountability.  Fortunately for us, our state forefathers envisioned this problem and proclaimed that we are not allowed to use this method in Tennessee, by law.  Unfortunately for us, this law is routinely ignored in favor of the easy way out, incremental budgeting.

Tennessee Code Annotated 9-4-5102 states: "the budget of the state government shall be prepared using zero-based budgeting principles."  What this means is that each department is supposed to justify its budget, even its very existence, from the ground up each year.  A great deal of scrutiny should be given to each agency and department.  Instead, they propose an "improvement" amount, which is a nice way of saying a spending increase, over last year's budget.  That's called incremental budgeting and it is clearly against the law.

I've worked on budgets in the private sector as a department head and I had to present each employee's salary along with specifics on itemized projected spending.  These individual items were scrutinized by my superior and passed along to the decision-maker.  Some of the items I asked for were deleted by my superior.  Others were axed by the decision-maker.  Either way, I had to justify every dime I proposed to spend.  Had I submitted the previous year's budget along with a dollar figure for increased spending I most likely would've been fired.  By law, Tennessee must follow the same zero-based budgeting guidelines.  It's time we started enforcing that law.  The amount of money that could be saved by enforcing this law is incalculable.
 

Bond Indebtedness

Although Tennessee enjoys a relatively low bond debt in comparison to other states, we could be doing better.  Issuing bonds is the family budget equivalent of making purchases on the credit card.  We should be very judicious when it comes to projects we choose to put on the credit card.  It may seem a lot less painful than paying cash in the short-term but the consequence is millions of dollars in interest.  We should reserve our bonding for necessary purchases that can't be paid for in cash.  Currently, Tennessee faces paying over $366 million dollars in interest alone over the next 30 years. $366 million!  As noted earlier, our debt service has gone up 118 percent over the last 10 years.  Some of the items bonded include golf courses and a stadium in Nashville.  These may be very desirable properties but would be considered luxuries, not necessities.

There's another problem in our schools which may go a long way in explaining why too many kids fall behind and never catch up.  A disturbing reality was revealed to me only recently.  According to several educators with whom I've spoken, teachers in Tennessee schools who hold back a child based on unsatisfactory progress can be overruled by the parents.  Children who have not mastered the basic skills of one grade can be promoted to the next at their parents' insistence over the protest of the teacher.  This is outrageous.  Children who are shuffled through the system by parents or teachers under the guise of helping them save face with their peers are done a great disservice.  No doubt, it's painful to be held back a grade but the future of struggling and falling further behind is far more cruel.  No child should be pushed into water over his or her head.  Social promotion by teachers AND parents must stop immediately.

Not all Tennessee schools are wrought with doom and gloom, of course.  In fact, even in the most impoverished areas there are shining examples of hope.  In one Nashville school, where the poverty level is 100 percent, the principal used some creative learning tools to help overcome the failure befalling similar schools.  During lunch she would use a projector to flash math and reading problems on the wall using the students' names in the problems.  This passive way of teaching works.  If you don't believe it, try getting to a movie early and see if you don't get sucked into the trivia questions flashed on the screen.  This same principal also got a local chess club to teach the kids the game of chess, a great way to increase their reasoning skills.  The result was this school performed well above the national average in reading and blew the roof off the scores in math while other Nashville schools in their same situation failed.14

It also seems that if we're serious about teaching kids in K-2 the basics we should dispense with the superfluous until they have mastered the "Three Rs."  Requiring that K-2 students "name community health workers" and "identify agencies within the community that provide health services" in order to become "aware of and appropriately use health services, practices and products" seems like a waste of time and resources if these same students are producing dismal reading scores.  Yet, that's just an example of the prescribed learning in Tennessee schools.15  Other learning requirements for Tennessee K-2 include:

 Develop an understanding of dance as a response to experiences and the environment.16
 Combating Career Stereotyping.17
 Students will gain an understanding of . . . microeconomics.18
 Students will gain an understanding of . . . macroeconomics.19
 The student will analyze the social impact and explore ethical issues of technology usage.20

I know my own boys have spent a lot of time learning about, and pledging to protect, the Rainforest.  All of these subjects may be fine and good.  I certainly want my boys to be well-rounded but all this extracurricular learning is meaningless if the kids can't read or add and subtract.  It seems we spend an inordinate amount of time making sure these kids are socially aware at the peril of producing substandard readers, which is the basic reason for K-2 in the first place.

Should we be spending more money on education?  The answer is a qualified "yes."  As mentioned before, we've increased K-12 spending in this state by 83 percent over the last 10 years.  If our school kids were doing 83 percent better, I don't think you'd find a complaint from anyone.  The trouble is, we haven't seen an 83 percent improvement.  Far from it.  A few years back, we spent a tremendous amount of money to lower class size.  The end result: test scores went down.  This current budget proposes spending $33 million in addition to the Governor's Reading Initiative Program for a total of 130 million new dollars on K-12 education.  That doesn't include $27 million for teachers' raises.  That raise, incidentally,  is merely a cost of living increase at 3 percent and certainly something our teachers deserve.  In fact, they deserve a lot more but precious resources have been squandered to the point that Tennesseans are now insisting on results from existing spending before agreeing to fork over more money.  Teaching kids to read without demanding nearly $100 million to do it would go a long way in restoring confidence in our state's public education.

Action - Scrap the Governor's Reading Initiative Program
Savings - $96,000,000
 

Expect Those Who Use Higher Education To Pay Their Fair Share

Few things puzzle me more in this budget than the logic behind the Governor's push to increase the number of Tennesseans with bachelor's degrees.  Don't get me wrong.  I'm all for more people graduating from college but the reasoning behind the increased spending just doesn't make sense.  According to the Governor's budget information, only 17.7 percent of Tennesseans have a bachelor's degree yet 54 percent of Tennessee high school graduates attended a Tennessee higher education institution in 2000.21  That tells me that a lot of these kids aren't graduating. However, the governor wants to raise the standards in the UT System through a 10.8 percent increase in higher education spending this year, 11.3 percent last year.  Logic would dictate that if you raise the standards, less will graduate rather than more.  Not that the schools in the UT System should be too easy but they also shouldn't be beyond the reach of the average high school graduate in Tennessee who seeks higher education.  This may come as a shock to some but UT is not Vanderbilt nor should it try to be.  Many hold up the University of North Carolina as an example of a good state-supported university.  Indeed, it is, but it will never be Duke nor does it try.  It is counterintuitive  to think that we can raise the standards of the UT system while, at the same time, expect more people to obtain degrees.

This budget lays out some statistics intent on shaming the reader into supporting the extravagant spending contained within.  However, closer examination of those statistics, in fact, leads to another conclusion.  The Southern Regional Education Board ranks Tennessee 12th out of its 16 states in terms of the percentage of the population 25 years and older with a bachelor's degree.  It also features a chart which shows Tennessee 8th in spending.  Delaware, Kentucky, Louisiana, Mississippi, South Carolina and West Virginia all spend less on higher education but have higher percentages of people with degrees.  The governor's own charts prove beyond a doubt that more money does not necessarily mean more degrees.

The simple truth is, universities don't dictate the caliber of people in the state.  Jobs do.  For example, Nashville has become a virtual hospital Mecca.  How many of those doctors do you think got their medical degrees from the UT System?  If we want to increase the education level of Tennesseans we would be better served by attracting the right kind of industry and businesses to our state.  Our schools will then adapt to meet the demand.  In the case of North Carolina, the Research Triangle Park has made the University of North Carolina better as it responds to the demands of the jobs in the region.  Building on the model of the RTP would be a better strategy for the future of the state, in turn making the UT System better as it responds to market demands.  Instead, the Governor wants to create a better educated populous hoping that will attract industry.  As we've seen with Saturn, Dell and Nissan, a good number of employees are transferred in.  As industry requiring better educated employees sets up shop in our state, we will naturally see a more educated population, whether home-grown or imported.  Indeed, I would venture to say that the nearly 1 million person increase we've experienced over the last decade was not just the result of native procreation.  A good number of those million new citizens followed businesses who chose to relocate here.  It's laudable to hope for a better educated citizenry but without high-tech industry in place, our well-educated graduates will simply leave the state in search of a job.

The other puzzling part of the higher education equation is so many young people have come to regard a college education as a God-given right.  In the process of raising the expectations we have of our children going to college, many of them, in turn, have come to expect it to be given to them.  It's not too much to ask those who use the service to pay a larger share of it.  The Governor's budget tries to the make the case that UT-Knoxville's tuition has risen by 43 percent since 1995-96 while its peer schools' tuition has risen just 14.7 percent.  That may be true but what he doesn't tell you is that tuition at UT is still one of the lowest in the region.  The old concept of "working your way through college" seems to have been replaced with spoiled college kids-turned-lobbyists "walking their way through college" in the halls of the General Assembly.  When I addressed the Senate Finance Committee in 1999, I made the following observation:

The trend seems to be to have government pay for college educations for everyone.  In the case of Georgia and other states that means a state lottery.  On the surface, that may sound nice but I believe it will prove to be very damaging long term.  I've heard countless stories of people who worked their way through college and I've yet to see one case in which that was bad for the person involved.  Quite the contrary.  Working for something like a college degree is a lesson in itself, one that may be more valuable than a degree.  Providing a K-12 education for our children is one thing but college students aren't children.  Giving them their first taste of adulthood by having all the other citizens of the state pay for something only they will use is not a very good start.  In fact, it's a habit which will prove very hard to break.  These young adults would be better served with a course in Life 101 in which they'll learn that anything worth having is worth working for.

Action - Limit growth to 3 percent
Savings - $99,348,984
 
 

Plug The Leaks in TennCare

This is the Volunteer State yet I doubt we want to be volunteering more of our personal wealth than it takes to meet the needs of those less fortunate.  The reality is, we nearly double the national average in Medicaid enrollment as a percentage of population, leading every other state in the nation at 20.1 percent.  By comparison, California is only at 12.8 percent and Mississippi at 9.9 percent.22  Before there was TennCare, the Tennessee Comprehensive Health Insurance Plan (TCHIP) provided health coverage to the state's uninsurables.  As 1993 came to a close, that number was 3,433 people on the program.  After TennCare was enacted, the number of uninsurables ballooned to 113,951 by April of 1999.23  Between that 3,219 percent increase in uninsurables, coupled with leading the nation in Medicaid enrollment as a percentage of population, it doesn't take a rocket scientist to figure out that we have far too many people on the program.

Right at 25 percent of Tennesseans are on TennCare.  Now, let's just suppose for a moment that we had the same percentage of people on TennCare as the national average, 10.4 percent.  That would translate into a savings of almost $1.2 billion in the state's portion of TennCare per year and about double that for the federal portion.24

Contrary to what some folks in state government have said, we are not married to TennCare.  TennCare may be cheaper on a cost-per-person basis but if you're forced to have more than twice the average number of people on your rolls it's hardly worth it.  We must either sever any strings attached which force us to take in such a disproportionate amount of uninsured people into the program or go back to Medicaid.  Having 25 percent of your state's population on public medical assistance is a disgrace.  There simply aren't that many needy people in this state and we can no longer afford to pay for that amount of health care.  The current system encourages businesses and insurance companies to dump high risk people off on TennCare because they know they cannot be turned away from the program and most times it's cheaper so who's going to complain?  We now have people flocking to this state from around the country because of this loophole which will eventually break the back of this state.  It's high time we separate the needy from the greedy and concentrate on helping those who really deserve it.

Action - Cut rolls to national average of 10.4 percent of state population
Savings - $1,182,763,829
 

End Revenue Projections

There are several state governments that convene only every other year.   Texas is one of them and it has one of the lowest per capita tax rates in the nation.  Conversely, Massachusetts has a full-time legislature and they have one of the highest tax rates.  I believe there's a connection.  If this were Texas, we'd have one more year before the legislature met.  In the spirit of generosity, let's increase this year's budget by 3 percent.  That's more than the rate of inflation.  There's no reason why we can't continue with the same budget for another year, allow for cost of living adjustments, and let tax revenues surpass spending.  Next year we'll know better where we are financially with cash-in-hand and can better formulate a budget based on real money, not projections.

Action - Limit all departments to 3 percent increase
(excludes TennCare, K-12 & Higher Education listed above)
Savings - $62,839,620
 
 

Cut Unnecessary Capital Appropriations and Improvements

• Country Music Hall of Fame Grant - $1,000,000
   The music industry is wealthy enough to fund this without the aid of the state.
• Warriors Path State Park Safety Crossing - $247,000
  This looks suspiciously like an item from the 1999-2000 budget which was called Warriors Path State Park Golf Cart Crossing instead of Safety Crossing.  After we exposed it in that budget analysis, it was supposedly cut from the budget.  This looks like another stab at it.
• Paris Landing State Park Kitchen Expansion - $1,283,000
  This seems quite exorbitant for a kitchen expansion.  I would cut this item until a more reasonable bid is submitted.
• Classification-Compensation Adjustments - $20,000,000
  The current budget already has a 3 percent salary increase for teachers and state employees totaling over $75 million dollars.  This essentially gives another pay raise by increasing an employee's rank.  This nice, round figure which pops up year after year leads one to believe that it's not based on reality.  If we are truly in a "budget crisis" it isn't too much to ask that we freeze promotions for a year.
  
  Action - Kill these appropriations and improvements
  Savings - $22,530,000
   
  Total Savings This Year - $1.46 billion

Reference Notes

1. 1990 TN population according to Census Bureau was 4,877,203.  2000 TN population according to Census Bureau was 5,689,283.  Budget in 1989, according to State Representative Pinion, was $7 billion.  Proposed 2001-2002 budget is $18.9 billion.

2. 2000 NC population according to Census Bureau was 8,049,313. NC proposed budget for 2001-2002 is $24.2 billion.

3. Tennessee Budget for Fiscal Year 2001-2002, page A-17.

4. Tennessee Budget for Fiscal Year 2001-2002, page A-17.

5. TN Code Annotated - 9-4-5203 e-1 through10. Governor's budget document - Appropriations exceeding growth of state's economy.

6. FedEx Corporation profile.

7. Tennessee General Assembly Fact Books, FY 1989-90 and FY 1999-2000.

8. The Budget-Fiscal Year 1999-2000, page A-8; Fiscal Year 2000-2001, page A-8; Fiscal Year 2001-2002, page A-4.

9. U.S. Census Report, Poverty in the United States.

10. State of Tennessee, TennCare Bureau.  Based on total state population as estimated by U.S. Census Bureau of 5,483,535 and a TennCare enrollment of 1,315,894 for 1999. Medicaid Enrollment in 50 States, Kaiser Family Foundation.

11. North Carolina Department of Health and Human Services, Division of Medical Assistance. Based on total state population as estimated by U.S. Census Bureau of 7,650,789 and a Medicaid enrollment of 848,026 for 1999. Medicaid Enrollment in 50 States, Kaiser Family Foundation.

12. Cato Institute study: The Case Against a Tennessee Income Tax.

13. Encyclopedia Britannica, Government Budget.

14. High poverty doesn't equal low performance in classroom by Diane Long, The Tennessean, April 2, 2001.

15. Tennessee Education Web Page, Grades K-2: Environmental and Community Health Framework.

16. Tennessee Education Web Page, Dance K-2; Subgoal 1.2.

17. Tennessee Education Web Page, Scope and Sequence; Domain-Career Development.

18. Tennessee Education Web Page, Social Studies Standards.

19. Ibid.

20. Tennessee Education Web Page, Computer Technology: Literacy and Usage; Grades K-2.

21. Tennessee Budget for Fiscal Year 2001-2002, page B-88.

22. Employee Benefit Research Institute.

23. Brian Lapps, A Framework for TennCare Reform, presented to the Tennessee General Assembly May 10, 1999.

24. Cost per TennCare recipient calculated at $1,114.  Based on 1999 enrollment of 1,315,894 and state portion of 1999-2000 TennCare budget at $1,465,826,000.  10.4 percent of 2000 Census population of 5,689,283 = 591,685 x $1,114 equals $659,137,571.  Subtract that from the current TennCare budget of $1,841,901,400 for a savings of $1,182,763,829.