Until the details of the governor’s revised budget come out on Monday, local government officials will remain wary.
The last time Governor Phil Bredesen made significant budget cuts was five years ago – the first year he took office. Back then, the Governor slashed departmental spending with 9% across the board budget cuts.
Most of the cuts were debated with little fanfare from state legislators. The exception was state-shared taxes. That’s the portion of taxes the state sends back to cities and counties. Local governments were upset at losing a portion of the money they relied on to fund their own needs.
Ultimately, they lost $40 million and property taxes went up in several communities. Governor Bredesen fully restored the payments with the 2006 budget, but with this year’s shortfall hovering near $500 million, local government officials are scared of losing the money again.
Chad Jenkins is the Deputy Director of the Tennessee Municipal League, the lobbying arm of local governments.
“No one escapes the consequences of a weak economy. Local governments are in the process of doing their budgets and they’re finding the same thing that has impacted the state so anything the state might do in addition would complicate that.”
The Governor will present his revised budget to a joint legislative session on Monday afternoon.
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