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Location: Nashville, Tennessee, United States

1/28/2003

And They Said It Couldn't Be Done
Gov. Phil Bredesen is going to do what the previous administration said could not be done (and, indeed, never seriously tried to do): he's going to cut the budget. And revelations of massive budgeting errors by the previous administration are helping Bredesen lay the grounwork for the state's first real budget trimming in almost a decade.

The Tennessean reports:

Gov. Phil Bredesen is asking most state departments to look for 7.5% across-the-board spending cuts in the short term and said in the long term he hopes to find ways to eliminate 2,900 state jobs he said were added since 2000. In his second week as Tennessee governor, Bredesen continued to work through ways to deal with expected budget shortfalls with his new Cabinet in meetings that he has opened to reporters. He is putting a "full-court press" on getting a handle on TennCare cost overruns, which, he said, will cause most of the projected shortfalls this year and next.

Bredesen told his Cabinet yesterday that TennCare pharmacy costs are out of control and "it doesn't make sense'' that some TennCare enrollees would receive more than 65 prescriptions a month."

It hasn't made sense to TennCare critics for the past four years, either, but the previous administration and Gov. Don Sundquist were hell-bent on enacting a state income tax and refused to address TennCare's giant financial black hole because it made the budget crisis worse - and pushed more legislators to the brink of voting 'Yes' on the administration's various proposals for an unconstitutional state income tax.

Indeed, for the past 4 years, Sundquist officials stamped their feet and repeatedly claimed the $5 billion TennCare program wasn't the cause of the state's chronic budget problems, but Bredesen is telling the truth: "TennCare is so big that when it sneezes everyone else catches pneumonia."

Bredesen revealed that the Sundquist administration made "two flat-out errors" in TennCare budgeting, failing to budget $36 million in payments to hospitals and creating $45 million in administrative costs by overprojecting how much the federal government would contribute.

Over-projecting was a chronic budgeting problem with the Sundquist administration, which often over-estimated revenues, appropriated the money, and then blamed the tax code - rather than their politicized estimates - for the shortfall.

The story also includes some snarky, defensive comments from the former Sundquist administration's top budget official about those two huge TennCare budget errors that ocurred (or were perpetrated) on his watch.

Things are getting fun in Tennessee. And remember, TennCare is just the first budgetary problem Gov. Bredesen is dealing with. I suspect Tennesseans will be learning a lot more details about various "budgeting errors" and other masterpieces of fiscal malpractice of the Sundquist administration in the weeks and months ahead, which will provide Bredesen enormous political capital to cut Tennessee's bloated budget down to a more management and sustainable size.

(This post is also at PolState.com.)