Update: Bredesen hopes buyouts cushion layoffs

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More than 2,000 state workers will lose their jobs as a result of the state’s “dramatically” worsening financial situation, a cutback Gov. Phil Bredesen said Wednesday could be cushioned through his offer of voluntary buyouts.

Bredesen said he believes there are more than 2,000 state workers willing to voluntarily leave their jobs in order to do a number of things, such as retire, go back to school or stay in the home.

In total, he says he’ll offer packages to 2,011 employees, or five percent of the executive branch’s workforce.

If not enough employees take the voluntary buyouts, Bredesen said involuntary layoffs would be necessary to eliminate the workers from the state’s payroll.

“I’m hoping that no one loses their job involuntarily,” Bredesen told reporters in a news conference. “And I think we’ve got a plan that’s got a decent chance of accomplishing that.”

The layoffs are necessary, Bredesen said, as a result of needing to cut $468 million from his proposed budget thanks to “dramatically” deteriorating tax collections.

To put those dwindling tax revenues in perspective, April was the state’s worst month since 1961 for sales tax collections. This year’s first quarter was the state’s third worst.

“There’s nothing unique about our situation,” said state Finance Commissioner Dave Goetz. “This is happening everywhere.”

The layoffs will trim $64 million from next year’s budget plan. Other line items from Bredesen’s budget are also being nixed, including expanding the pre-Kindergarten program, cutting higher education’s operating funds by $55 million and not funding $86 million worth of additional K-12 school investment.

Buyout details unclear

The details on the buyout package are still being formulated, but Bredesen mentioned cash payments and extending health benefits as an example. The cash payments would likely be higher for more veteran employees.

Another option being discussed, Goetz said, is giving departing workers a tuition break to go back to school.

Public sector examples for the Bredesen administration have been hard to come by, Goetz said.

Instead, Bredesen, a former businessman, said he’s reached out to the private sector, talking with executives from Nissan and HCA Inc., which have each made buyout offers in the past, to garner their advice.

“Our package will probably not be as rich as a private package would typically be,” Bredesen said.

Bredesen said he wants to start offering the buyout packages by early June and have them completed by the end of July.

The buyouts to usher those employees out would be paid through some of the state’s reserve accounts, but not the rainy day fund, Bredesen said.

Bredesen said taking a voluntary buyout “does not do damage to anybody.”

“People who voluntarily agree to leave, it’s just like turnover,” Bredesen said. “People voluntarily leave the state every day.”

Rep. Mike Turner (D-Old Hickory) said the state should use part of its $750 million rainy day fund to protect state workers for at least one year rather than laying them off this year.

“If it’s not raining right now, I don’t know what the use of a rainy day fund is,” Turner said. “It’s raining.”

Some positions would be eligible to take the buyouts and some wouldn’t, Bredesen said. Direct service positions to the public would not be given priority while administrative positions would.

“We’re not going to reduce the number of guards we have keeping prisoners in prison and we’re not going to reduce the number of troopers we have on the highway keeping our highways safe,” Goetz said.

Tennessee State Employees Association officials said they were pleased Bredesen was focusing on voluntary buyouts as opposed to “terminating workers.”

“There are some people that may want to retire, or are teetering on retiring, and if it’s a package that’s put together very well and it has incentives, I think we can get there,” said Zoyle Jones, TSEA’s president.

Layoffs just part of cutbacks

Overall, $468 million, Bredesen says, will have to be cut from next year’s state budget. He ruled out proposing tax increases.

Those cuts, he said, include the following, which will become completely known when Bredesen unveils his revised budget plan Monday in a joint session of the General Assembly:

• Not adding more classrooms for the state’s pre-Kindergarten program. Bredesen had backed a $25 million expansion.

• Cutting higher education funding by 5 percent, or $55 million
• Eliminating $86 million in a planned expansion of reforms to the state’s Basic Education Program.
• Nixing state employee pay raises as well as pay hikes for higher education staff

“This is a difficult picture for the state,” Bredesen said. “I don’t have to explain to anyone.”