State Budget Shortfall Could Reach $800 Million

Governor Phil Bredesen says the state will have to dip into its rainy-day fund to make ends meet in the coming year.

Bredesen says the state is down about $200 million for the first three months of its budget year, and he says that’s not the worst quarter the state will see.

The shortfall could reach $800 million, and while the state’s rainy day fund can help soften the blow, Bredesen says he doesn’t want to exhaust it and leave nothing for emergencies.

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“We can use the rainy day fund as a way to try to help get a little bit of a soft landing here and get rid of some of the worst effects, but you can’t just make the problem go away with the reserves. You’d run through them in a year and then we’d have nothing left.”

Bredesen says he’d like the state to exemplify sensible fiscal management.