NASHVILLE, Tenn. -- Tennessee will offer voluntary buyouts to 2,011 state workers in an effort to shore up the state's budget, Gov. Phil Bredesen announced Wednesday.
"We need to be prepared for some lean times ahead. We need to be serious about making some substantial budget cuts," said Bredesen.
Bredesen said in unveiling the plan Wednesday that the administration will make the cuts voluntary and will offer buyouts as an incentive. If not enough workers take up the offer, involuntary cuts will follow.
Bredesen, a Democrat, said the cuts are necessary because of the severity of the state's budget outlook.
"We need to be prepared for some lean times ahead," Bredesen said. "Realistically we are not at the bottom of this yet, and fundamentals continue to deteriorate."
The number of jobs to be cut will represent a five percent reduction in the state work force.
Bredesen acknowledged that large staffing cuts are unusual in state government.
But "most companies -- if they could get through it with a 5 percent reduction in the work force -- would consider themselves lucky indeed," he said.
Bredesen said other cuts will include no new pre-kindergarten classrooms. He also said money from the new cigarette tax won't be used to increase the funding formula for schools.
Bredesen called this the worst month for tax collections since 1961 and the third worst first quarter fiscal year that the state has ever encountered.
Bredesen said the personnel cuts will save $64 million, and the buyouts will come from the state reserves. Officials with the Tennessee State Employees Association praised the decision to make the buyouts voluntary.
"If we can accomplish this on a voluntary basis, it has many good effects," said Bredesen. "Whatever we do is going to be done with great respect for state government. We're going to steer the ship and we have a plan to do so."
Making the cuts voluntary will help avoid a need to navigate the state's complicated civil service rules for laying off workers.
Bredesen said the buyouts will run into the "tens of millions of dollars" and the amount for each worker will likely be based on how many years of service he or she has.
"We're going to do this in a way that is respectful of them and try to minimize the impact on any employee," Bredesen said.
Lawmakers said the administration is working on ways to offer retirement incentives or buyouts to soften the blow of state workers who may lose their jobs.
"I'd like to do as much of it as voluntarily as possible," Bredesen said Monday. "I've got to do my job as governor in balancing the budget. I want to treat these state employees right as I do it, and I'm working very hard to try to figure out how to do that."
And while Bredesen doesn't know what the buyouts will include, the State Employees Association is pleased with the option.
"We truly believe that there will be 2,000 employees that will accept this," said Tennessee State Employees Association Executive Director Jim Tucker.
"It is our hope the General Assembly will work with the governor and adopt these proposals for a voluntary buyout and not terminate workers," said Zoyle Jones, the group's president.
State Finance Commissioner Dave Goetz said the buyouts will target the 6,000 or so state employees with at least 30 years of service.
"It's going to be harsh no matter how you do it," Goetz acknowledged.
Though the cuts will cost many their jobs, one man saw Bredesen’s idea of buyouts as a positive.
"I think the buyouts are a good idea. … If that's what they have to do and they can save the majority of the jobs, then I think it's a good idea,” said state employee Andre Gibson.
Some Call For 'Rainy Day Fund' To Be UsedCritics have said the state's $750 million "rainy day" reserves should be tapped to keep the layoffs from happening, but Bredesen said he's against that move for fear that the budget picture could get worse in the following budget year.
"I don't think the first few months of a recession is the time to start spending your savings," he said.
"I think if we were smart, that we would use the reserve funds to plug the gap for at least a year, and do what's best for employees," said Rep. Mike Turner, D-Old Hickory. "We may be able to save some jobs. We're about to put some people out on the street, and they have families."
"The rainy day fund are reserves. It’s money that’s set aside for crisis situations. And when you’re sitting there with a little over a billion dollars in reserve funds, it doesn’t matter to us whether it comes out of the rainy day fund or so-called TennCare reserves or benefit reserves, it’s money that is sitting there to keep people from being terminated," Tucker said.
Bredesen said that while the state’s situation is a crisis, it’s not an emergency.
"I think of it a little bit like you’re out swimming in the dark out here and you can’t quite see the other shore, so you want to pace yourself and swim carefully and just be conservative in what you do, and that’s what we’re trying to do," he said.
Bredesen's buyout proposal is also drawing bipartisan support.
"He's presented it as an absolute necessity," said Senate Republican Leader Mark Norris, of Collierville. "The voluntary buyout provision is what makes it somewhat less painful."
Senate Speaker Ron Ramsey agreed.
"It's a tough time in state government, but I think he's making the right decision," said Ramsey, R-Blountville.
Bredesen, who ran a publicly traded company before becoming a politician, said last week that layoffs of state workers are an unavoidable component of the cuts.
Other Areas To Also See CutsThere will be significant cuts for higher education to the tune of $55 million or 5 percent of their budget.
The governor said he has already talked to higher education, and they understand they have to make this up through other ways besides tuition.
Earlier this year, the Tennessee Board of Regents said students and parents would not have to face a double-digit percent tuition hike and that officials would try to keep hikes under 10 percent.
"Well, that’s what we said in front of the general assembly this session. Of course, that was with the governor’s budget the way it is. I don’t know what tuition is going to be. The board takes what the governor says very seriously," said TBR Chancellor Charles Manning.
Higher education representatives said more children are being educated that ever before at higher levels than ever before and that funding hasn’t kept up with demand.
"If the state funds were increasing at the rate of inflation, then tuition could increase at the rate of inflation. When the state funds don’t increase and if your budget is going to increase (with) the rate of inflation, then the student fee money has to increase faster to make up for that," said Manning.
There are no promises for keeping tuition hikes under 10 percent.
It was unclear which departments are going to be affected the most, and Bredesen was not sure if the Department of Children’s Services could absorb further cuts.
The state would not do across the board cuts by a certain percentage. Each department will have a different number of cuts.
Bredesen also said his plan to expand eligibility for TennCare will need to be scaled back. The governor in 2005 cut more than 170,000 adults from the state's expanded Medicaid program amid escalating costs.
One of the main goals of the governor's energy task force is to look for long-term ways to save the state money by helping it become more energy efficient through the use of alternative fuels, renewable energy sources and the development of clean-energy technology.
"It's clear we're doing some things, it's clear ... we can do a lot more," Bredesen said.
Bredesen will present a more detailed revision of the state's budget plan in an address to lawmakers on Monday. He says the new plan will assume a budget shortfall of $468 million, but that he will propose no new taxes to bridge the funding gap.
Other States Experience Similar Budget WoesMore than half the states are experiencing budget shortfalls.
Under state constitutions, most can't borrow money or run a deficit, making spending cuts a necessity. That has brought hiring limits and freezes in states from California to Maryland.
Ohio Gov. Ted Strickland has announced spending cuts that could lead to about 2,700 of the state's 60,000-plus workers to lose their jobs. Rhode Island Gov. Don Carcieri last week signed a revised spending plan that includes a provision to make state employees who retire after Sept. 1 pay more for their health insurance -- a change that state officials say could prompt about 2,500 state workers to leave before the deadline.
In New Jersey, Gov. Jon S. Corzine is proposing to cut 3,000 state jobs through early-retirement incentives and layoffs. The state's commerce and personnel departments would be eliminated.
Copyright 2008 by WSMV.com. The Associated Press contributed to this report. All rights reserved.
This material may not be published, broadcast, rewritten or redistributed.
Video | Discuss The Issue | Survey | 
