State may lose $100 million in federal budget cuts
By Joel Davis | (joeld@thedailytimes.com)
Tennessee could lose substantial funding from automatic federal budget cuts that took effect Friday.
Blount County’s state legislators discussed the situation at a legislative briefing at the Blount Chamber of Commerce on Friday.
Called sequestration, the $85 billion in cuts were part of a budget agreement previously passed as a way to defuse a stand-off in Congress concerning the routine lifting of the federal debt ceiling back in 2011.
“That means a $100 million reduction in federal funds coming to Tennessee,” said state Sen. Doug Overbey, R-Maryville. “Whether that occurs during this fiscal year or next or both, we don’t know. Our state budget is $32 billion, so $100 million is quite a hit.”
State Rep. Robert Ramsey, R-Maryville, said funding received by the state Department of Health could be reduced. “Vaccinations are going to be limited for a certain group of children. That could be devastating,” he said.
David Buchanan, executive director of the Blount County Community Action Agency, asked the legislators about funding for community action and human resource agencies in the state that is not in the governor’s proposed Fiscal Year 2013-2014 budget. “It is critical to our operations for those in need in Blount County,” he said.
“To get it back in the budget will require legislatively amendments to the appropriations bill.” Ramsey said. “I have no doubt that those will be filed and submitted near the end of the session. It will be up to the finance committees in both houses to weigh that along with other pressing needs.”
Ramsey noted that the sequester could affect the $1 million in federal funds provided for senior nutrition programs, such as provided by BCCAA, in the state. “That is going to affect you drastically,” he said.
In response to another question, Overbey said state revenue could be diverted to plug any holes caused by the sequester. “We could use state revenues or state reserves to offset the effects of sequestration. Is that good policy?”
The state had been in trouble 12 years ago from a practice of using one-time money for ongoing expenses, he said. “It’s taken us a long time to grow out of that hole and start matching recurring revenues with recurring expenses.”
The state is also watching sales tax collections, which dropped slightly in January. Hopefully, they will pick back up, Overbey said, but, “if they are like January, it’s probably going to cause us to take a different course on some budget issues. We are in a real wait and see.”
The Associated Press contributed to this report.
