Phil And Farr's Failed PoliciesOur illustrious Governor is warning us that the budget situation is "bad," and that Tennessee's total revenue may fall by $800 million:
With lower-than-expected collections in the previous two months as well, general fund collections for the first quarter are about $200 million below what state budgeters anticipated. They had predicted that "these are not the worst three months that we're going to see in this year."
General fund revenues pay for the day-to-day operations of government; other funds pay for specific areas of state spending, such as the highway fund.
The grim revenue numbers point to a far deeper yearly shortfall for the state, which Bredesen has previously put at $300 million to $600 million. New projections suggest that year-end revenues could be $800 million below projections. That would put the state on pace for a shortfall the magnitude of the state's last recession in 2001 and 2002.
Early in the year, the administration had indicated a reluctance to dip into those reserves, which includes the $750 million rainy-day fund, about $500 million in TennCare reserves, and several other reserve accounts.
And of course, the administration is looking to blame the incoming Republican General Assembly for the problems that Bredesen and the Democrats have largely helped to create:
The news arrives amid economic and political uncertainty. On Nov. 4, the governor lost an ally in the House when the GOP gained an unexpected four seats and a slim 50-49 majority, creating new uncertainty about relations between the Democratic governor and the GOP General Assembly.
Of course, what The Tennessean and other press outlets which fawn over Phil Bredesen are not reporting is that the Governor was warned that his new taxes on tobacco and other commodities would not increase the size of the State's purse, but would instead likely lead to a decrease in overall revenue-largely because the Honorable Phil Governor couldn't quit spending when he needed to. Because Republicans were the ones doing most of the warning, our collective warnings about where the Governor's policy could lead the State Treasury were cast aside as mere partisan bickering.
Now the Republicans are the new Sheriff in town, as it were, up at the Capitol. After endless warnings of what would happen if the Governor actually enacted some of his new, largely uncollectable taxes (readers will recall that Tennessee Revenue Commissioner Reagan "I'm A Lawyer" Farr actually contemplated stationing revenuers at the border to search people's cars for cigarettes in Gestapo-like fashion), the Governor wants to try and pull the wool over everyone's eyes and pretend that everything that is happening to the State Treasury is the fault of the sour economy. Yes, the economic situation is playing a role in all of this, without question. However, the Honorable Phil Governor is being disingenuous in saying that this was unexpected-some people did expect it, and said that the Governor's tax policy was playing a role in exacerbating the budget crisis.
Labels: Tennessee politics