Bill Haslam ran for governor last year as a penny-pinching pragmatist, promising a rigorous top-to-bottom review of state government. About each service rendered, he said he would ask, “Should state government do this?”
In his first few weeks in office, the new governor is finding there’s often no point to that question. For a vast array of programs affecting virtually the state’s entire population, the money is running out.
For the past two years, nearly $2 billion in federal economic stimulus money has propped up the state’s recession-battered budget. Now that money is disappearing, and with it go services in every department of state government.
The federal government is derided universally for wasteful spending. But even the flintiest budget hawks always have conceded Tennessee’s state government is lean. The state constitution requires a balanced budget. New taxes are off the table, and there are no easy cuts for Haslam to make.
“Ouch,” the governor cried at one point during last week’s public hearings on the state budget for the next fiscal year, which begins July 1. He had just learned that he would lose three-quarters of the state’s money for tourism advertising — the engine that drives a $13 billion industry. Across state government, the hit list is long.
The state would stop trying to prevent diabetes, ending a $7 million-a-year program that helps people lead healthier lifestyles, Health Commissioner Susan Cooper told Haslam. That’s just as the program was making headway against the disease. Tennessee, which once had the nation’s worst rate of diabetes, has climbed ahead of eight other states, Cooper said.
The health department also would end a breast and cervical cancer screening program for 14,000 uninsured and underinsured women, as well as the state’s HIV testing initiative and a program that helps hemophiliacs.
Social workers would stop making home visits to troubled families and stop teaching “healthy start” classes for children and their parents. Both of those programs are aimed at reducing child abuse and neglect, Cooper said.
All the commissioners brought their own lists of vanishing programs. Community treatment centers for the mentally ill and alcohol- and drug-addicted would lose funding. The Department of Children’s Services would lose 162 jobs. Six state park swimming pools would close. So would two state golf courses. A prison sex offender treatment program would end, along with convict “community service” work crews. Inspectors who ensure the state’s groundwater is safe would lose their jobs.
If cuts in mental health services go through as scheduled, “We’re off the cliff, sir. We’ve got major problems,” said Mental Health Commissioner Doug Varney, who also likened it to an amputation. “With this safety net, we can’t just keep cutting little pieces of the fingers off,” Varney told the governor. “Pretty soon the hands won’t work. I think we may have to decide to cut a finger off here or there, and that’s what we do. At least the hands will still work.”
Even the usually untouchable Education Department isn’t exempt. Its cuts list includes school nurses, teacher pay for after-school tutoring, grants to pay for school security officers, and funding for public TV stations across the state.
“These are all certainly needed programs,” acting Education Commissioner Patrick Smith said.
Although he obviously knew the broad outlines of the state’s budget troubles, Haslam seemed taken aback by some of the specifics. At one point, he interrupted the hearings to ask how so many obviously important programs wound up on the chopping block.
All were targeted in advance under the last budget and given funding for only one more year. Lawmakers could change their minds and choose new programs to eliminate, but as all state officials realize, it’s unlikely that any of the alternatives would meet with less anguish. Haslam is scheduled to make his budget recommendation by March 1.
“There’s not a magic drawer with money in it that we can pull out and fund all these programs, as worthy as we think they are,” Haslam told reporters. “So I can say with 100 percent certainty that we’re not going to get all those things funded that were funded with one-time money.”
Tennessee’s economy is slowly rebounding, and the state government’s revenue flow has ticked up in recent months after two years of the worst tax collections on record. The state has collected $100 million more than expected the first half of this budget year. Still, Haslam must add $70 million to public school spending merely to keep up with inflation, and costs also are rising in TennCare, the Medicaid health insurance program for low-income Tennesseans.
TennCare, which serves one-fifth of the state’s population, already is planning to impose new limits on inpatient hospital services and doctor visits and to eliminate coverage for physical therapy, among other reductions in benefits.
During their public hearing, higher education officials pleaded with Haslam for cash for building upkeep and other capital projects. University of Tennessee President Joe DiPietro said Estabrook Hall, the Knoxville campus’s century-old engineering building, is “falling down around our ears,” and that’s causing students to leave Tennessee to go to college.
DiPietro said regular funding for capital projects “would be a transformational change for Tennessee in higher education.”
Haslam gave little encouragement: “We hope to have some capital program for them. To say how much that would be or to think it’s going to be a huge amount is probably overly optimistic.”
More than one commissioner noted that state spending is contracting at precisely the wrong time.
Environment and Conservation Commissioner Bob Martineau said state park visitors spend $725 million annually and generate 12,000 jobs. Tourism Commissioner Susan Whitaker said her industry brings in $1 billion in sales taxes each year. With the economy in such a fragile state, they asked Haslam whether it’s a good idea to close park attractions and cut tourism advertising.
The governor greets his predicament with an air of resignation. It’s a sharp contrast with the soaring rhetoric of his inaugural address. In that speech only three weeks ago, he envisioned a Tennessee with a vibrant economy, top-tier schools and healthy lifestyles, and he challenged the state “to aspire to be more.” Now he’s asking the public to understand his hands are tied.
“There is over a billion dollars of cuts that have been made,” he told reporters last week. “We’re trying to see, are there any of those that we can figure out a way to pay for next year and to continue paying for? But it is important for everyone to understand, those cuts have been made theoretically. There will be some of those that we will try to bring back. We won’t be able to bring back many of them.”