NEWS ALERT FROM TENNESSEE GENERAL ASSEMBLY
Date: Wed, 5 Jun 2002 10:44:55 -0500

NEWS ALERT FROM STATE HOUSE FINANCE COMMITTEE HEARINGS...JUNE 5, 2002, 10:44
AM CENTRAL TIME...THE FOLLOWING ARE HIGHLIGHTS FROM THE ONGOING STATE HOUSE
FINANCE COMMITTEE HEARINGS ON THE "No New Taxes Budget" CURRENTLY BEING
DEBATED:

State Education Commissioner Faye Taylor began by giving an overview of the
Department of Education appropriation budget:
* 93% - Basic Education Program
* 4% - Mandated Programs
* 2% - Discretionary
* 1% - Safe Schools

NOTE: $15 million was cut in August from the Discretionary Fund. Cuts in a
No New Taxes Budget would be in addition to this.

Programs to be eliminated:
* Holocaust Comission
* Extended contracts for teachers
* Driver Education Programs

Across-the-Board Reductions:
* Music Curriculum
* Drop-out Prevention Grants
* Touching the Lives of Children Grant
* York Institute
* Deaf and Blind Schools
* Vacant Departmental Positions
* High School Tests
* Assistance provided to low-performing schools

Remaining Cuts (approx. $373 million) must come out of BEP

Reductions to Local Schools:
* Basic Education Program - $373,160,000
* Extended Contracts - $25,400,000
* Driver Education - $1,700,000
* TOTAL - $400,260,000

Statewide Impact of BEP reductions:
Total $373,200,000

Property Tax
Average 2001 Tax Rate
$2.37
Weighted Tax Rate Increase to offset Education cuts
$0.42
Average Tax Rate Increase to offset Education cuts
$0.64
Average Percent Increase in Rate to offset Education cuts 27%

(low - $.08 in Carroll County; high - $1.96 in Richard City SSD in Marion
County)


Personnel Reductions
Total State and Locally Funded Positions 63,266
Total State and Locally Funded Lost 8,352
Percent State and Locally Funded Lost 13%

(low - 4 in Richard City SSD in Marion; high - 428 in Davidson County)



Commissioner Faye Taylor -
"There are no good choices and these are not projections. These are actual
numbers."

"We are going to have to go back to the way we did things 20 years ago."

NEWS ALERT FROM STATE HOUSE FINANCE COMMITTEE HEARINGS...JUNE 4, 2002, 4:10

NEWS ALERT FROM STATE HOUSE FINANCE COMMITTEE HEARINGS...JUNE 4, 2002, 4:10
PM CENTRAL TIME...THE FOLLOWING ARE HIGHLIGHTS FROM THE ONGOING STATE HOUSE
FINANCE COMMITTEE HEARINGS ON THE "No New Taxes Budget" CURRENTLY BEING
DEBATED:

Opening Remarks from House Finance Chairman Matt Kisber:

"This morning we will begin a process of working to come up with a budget
with no new taxes. Based on a sense that we are no closer to a revenue
solution than the last three years, we must now focus on our legal
requirement of having a balanced budget in place for the next fiscal year by
June 30. What we seek to do is to understand what program reductions,
program eliminations and across-the-board cuts will mean. It is my hope and
expectation that committee members will focus on discussion of these cuts."

After testimony from the Constitutional Officers, state Finance and
Administration Commissioner Warren Neel discussed the effects of the cuts
will have on the AmeriCorps program. Members of the committee requested
Commissioner Neel prepare a more detailed examination and present it to them
before the hearings are concluded.

The Department of Personnel then presented their list of cuts which include:
abolishing positions, discontinuing blood drive, reducing support staff,
reducing fee-revenue from training courses, and reduce program support for
Human Resource Management.

"Today we saw the effects of such drastic cuts on some of the internal
departments of this state," Chairman Kisber said. "Reducing a total budget
by 12.5% is not an easy task. People will lose their jobs and programs will
be cut. We have come to this point through a stream of unimaginable
circumstances, and we are now forced to look not at the cuts that ought to
be made but the cuts that have to be made."

Budget Hearings will continue tomorrow at 9am to discuss the development of
a No New Taxes Budget for K-12 Education.

Matt Kroplin
Democratic Caucus Press Secretary
www.tnhousedems.com
matt.kroplin@legislature.state.tn.us