Haslam Cancels Plans To Raise Pay For State Workers, Teachers

Haslam says sub-par tax revenues will force Tennessee to forgo raises for state workers, as well as teachers, but he expects to avoid layoffs. (Image via Gov. Haslam’s flickr photostream)

Gov. Bill Haslam says Tennessee’s tax revenues have continued to sag below projections, and while he expects to avoid layoffs, the shortfall will scuttle planned pay raises for state workers, as well as teachers.

Haslam says he’s cutting the current year’s budget by $150 million, and more next year.

Tennessee’s sales tax has not brought in the cash Haslam hoped for, but he says the real problem is revenues from business taxes.  Companies had paid in too much, and are now asking for refunds.

There may also tax loopholes the state needs to find and close, which Haslam says officials will be looking into this summer.

Despite the current shortfall, the governor is standing by cuts made to both Tennessee’s tax on food and the estate tax.

Haslam has made a goal of raising Tennessee teacher pay faster than any other state while he’s in office.  He says this year’s setback hurts the case for making further cuts, like one proposed to the Hall income tax.