Haslam announces fiscal year 2014-2015 budget amendment
Nashville, TN -
Tennessee Gov. Bill Haslam announced details Monday of his proposed amendment to the FY 2014-2015 budget, identifying $160 million in reductions due to an ongoing decline in revenue collections and an additional $150 million to close the funding gap in the current budget for FY 2013-14.
While the budget amendment includes reductions, it keeps funding
increases intact for key areas such as the Department of Children's Services
and the Department of Intellectual and Developmental Disabilities. The
amendment proposal also preserves funding for the Basic Education Program's
(BEP) salary equity fund.
The revenue collection decreases reflected in the budget amendment
include a dip in sales tax collections after a modest holiday season, followed
by a long, cold winter that has kept shoppers indoors.
In addition, Tennessee is currently not able to collect the entire
amount of sales tax owed to the state from purchases made online. In FY
2012-2013, the state had an estimated revenue loss of nearly $332 million due
to online commerce.
Franchise and excise taxes, a type of business tax, are often
volatile and are down $215 million due to overpayments by businesses last year
that are now resulting in credits and refunds.
Revisions to the governor's budget proposal include:
from automating TennCare's eligibility system - $6.5 million
reductions to Families First vendors - $4.75 million
provider rate reduction - $18.5 million
pay increases for state employees and teachers - $72 million
next year's funding for Higher Education to the current funding level,
eliminating proposed increase - $12.9 million
of the BEP Growth Fund - $5 million
savings in the Career Ladder program - $4 million
proposed funding for the Rainy Day Fund by $4.8 million, which preserves
an investment of $35.5 million bringing the state's savings account to
$491.5 million on June 30, 2015.
The governor's amendment
eliminates a proposed increase to health insurance premiums for state employees
and teachers to provide them some compensation.
The $150 million gap in the current FY 2013-14 budget will be
closed by capitalizing on efficiencies departments have been making throughout
the year and by right-sizing several reserve funds. Rainy Day Fund
dollars will not be used.
The budget amendment will be filed this week. Finance and
Administration Commissioner Larry Martin will begin presentations to both
finance committees Tuesday.