Bredesen Files Fiscal Management Legislation

NASHVILLE – Governor Phil Bredesen this week submitted legislation that provides fiscal management tools that will give the state more flexibility to manage through the recession created by an extraordinary national economic crisis.

“This legislation has been very carefully crafted to give the state specific tools to manage through this recession in a way that helps minimize the number of potential employee layoffs and frees up state dollars to help us deal with the state budget,” Bredesen said. “I urge the members of the House and Senate to move quickly to approve these measures.”

The Governor’s legislation, filed Monday with the Offices of the Clerks in both chambers of the General Assembly, deals with two primary areas: state employees and the issuance of state bonds.

“Governor Bredesen made a commitment to work hard to protect the jobs of as many state employees as possible, and this legislation provides the tools to do that,” said Human Resources Commissioner Deborah Story. “These changes, most of them temporary, would allow the Governor and the General Assembly to minimize employee layoffs and deal with the realities of the budget in a very reasonable way.

“Further, with the exception of the Department of Children’s Services, which is in a unique situation because of the requirements of the Bryan A. Consent Decree, this legislation preserves civil service protections, including ‘bumping and retreating’ rights and priority recall, that are a primary concern of state employees,” Story said.

Administration officials have met with Tennessee State Employees Association representatives and will continue to work with them to address employee concerns.

The legislation would provide the state flexibility to minimize layoffs through the following provisions. Most, with the exception of those related to furloughs, are temporary measures that would be repealed on June 30, 2010.

-      Grants the Commissioner of Human Resources authority to move state employees who would be laid off or otherwise adversely affected to another position for which they are qualified.

-      If layoffs were to become necessary in the Department of Children’s Services, would authorize the Commissioner of Children’s Services to suspend certain civil service provisions to ensure progress and continued compliance with the Brian A. Consent Decree.

-      Allows the Governor to alter the state work-week and working hours, which are currently set in statute, in a manner that is least disruptive to state government so that furloughs may be utilized to minimize layoffs.

“Utilizing limited furloughs can be an effective way to help minimize the potential for employee layoffs, but only if we have the tools and flexibility required to enact them if necessary,” Story said.

The legislation proposed by the Governor would also give the state more flexibility in how the state issues bonds and pays for existing projects, which is needed during the current recession, with these provisions.

-      Authorizes the sale of bonds for site preparation and infrastructure improvements for the new Volkswagen facility in Chattanooga and the Hemlock Semiconductor facility in Montgomery County. This measure alone would free up $88 million in state funds to deal with the state budget crisis. The two projects are estimated to directly create more than 2,500 new jobs for Tennesseans. Related construction and supplier jobs could eventually add as many as 9,500 additional jobs to that figure.

-      Allows the state funding board to sell bonds at private sales instead of open auctions until June 30, 2011, to better deal with a volatile marketplace. This approach has been authorized before by the General Assembly on a limited basis in 2003.

-      Appropriates funds to pay debt service on the bonds for the Volkswagen and Hemlock Semiconductor projects and non-recurring funds for capital outlays for the two projects and the General Motors project in Maury County.

Bredesen called on the General Assembly to expedite the passage of the fiscal management package.

“We can work together to soften the blow of this economy to our citizens and our employees,” said Bredesen. “The federal stimulus bill will help, but no version of it is any panacea or silver bullet for the budget. Substantial cuts will be needed under any circumstances, and these tools will allow us to minimize the impacts of those cuts.”