Bredesen Proposes Dipping Into Rainy Day Fund To Save Jobs

NASHVILLE - Governor Phil Bredesen today delivered his eighth State of the State Address to the members of the 106th General Assembly, speaking to achievements in areas like education, job creation and child welfare and the challenges of maintaining services in the midst of declining revenues and the national economic recession.

In addressing the proposed FY 2010-2011 budget, Bredesen said he is building on the four-year budget designed last year to guide Tennessee through the economic recession and influx of one-time stimulus funds. The Governor said he adhered to the principle of the "family budget" in crafting his proposal.

"It's nothing more than the common-sense principle that we're going to adjust our expenses to match our income, and we're going to be very careful about using money from our savings account so we can keep it healthy," Bredesen said. "It's the way sensible families are managing through these tough times, and while the numbers for state government are much larger, the principle is exactly the same."

Bredesen spoke of the importance to him of leaving the state's finances stable for the next Governor and next General Assembly by matching recurring revenues and recurring expenses while moving forward on the priorities most important to the future of Tennessee, particularly in the areas of education and job creation. He also acknowledged the assistance provided by the Recovery Act, which has enabled a "softer landing" than would have otherwise been possible, making it possible to preserve jobs and plan more carefully for needed reductions.

The Governor emphasized the state's financial position is a strong one despite the economic recession. "As I stand here tonight, we have more than $900 million in the bank in our reserve funds," Bredesen said. "Given our strong financial position and the fact that we built up these savings to use at a time like this, I'm recommending that we draw down modestly from these reserves to soften the worst of the cuts that we would otherwise have to make."

The use of reserves will minimize some of the cuts that were proposed for state departments including Education, Health, Mental Health, and Children's Services. Bredesen also proposed using reserve funds to preserve 394 state jobs that would have been eliminated as a result of the tough economy.

The budget proposed by Bredesen fully funds the Basic Education Plan, the state's funding formula for education, and the increased contribution to the state's pension system recommended by actuaries and adopted by the Treasurer. Outside of those areas, the budget reflects reductions of about nine percent in most departments.

The budgets of Higher Education, Mental Health and Developmental Disabilities, and the Division of Intellectual Disabilities have reductions of six percent, Children's Services is at five percent, and the Department of Correction is just one percent.

During his final State of the State Address, Bredesen also singled out Commissioner of Children's Services Viola Miller and her staff for a recent, significant achievement by the department. On January 22, Tennessee became the seventh state to receive accreditation from the Council on Accreditation for its operation of a state-administered child welfare agency.

"Accreditation is how you assure people that your approach is right," said Bredesen. "When Vi Miller told me she wanted to try and get formal accreditation, I encouraged her, but I have to admit I was skeptical. She persevered, and today all Tennesseans can take pride and comfort in knowing the people responsible for managing the cases of abused and neglected children have met the high standards required for accreditation."

The Governor also expressed his appreciation to the members of the General Assembly for their extraordinary work in the recently completed special session on education.

"This is the way it is supposed to work. Both individuals and organizations with specific interests found ways to keep those interests in check and come together for a common good," Bredesen said. "There was no splitting along partisan lines. The final vote was genuinely bipartisan and made overwhelmingly clear to everyone that these reforms are not my plan, they're not a Democratic plan or a Republican plan. These reforms are Tennessee's plan, and that is going to make a tremendous difference in both K-12 and higher education in the years ahead."

Bredesen specifically thanked teachers and the Tennessee Education Association. "If anyone ever had any doubt about your dedication first of all to the good of the children of our state, the way in which you handled yourselves during the special session has put them to rest.

"Teaching is a profession that has many more dimensions than can be simply measured by students' performance on a written test," Bredesen said in acknowledging the concerns expressed by teachers regarding the use of student achievement in teacher evaluation. "I understand there are many factors beyond your control. Let's work together to find an approach that is both fair to your teaching profession and that gives our citizens confidence that the money they have invested in our schools is being used well."

Bredesen's 2010 State of the State Address and materials related to the proposed budget can be found at www.TN.gov.