Haslam: Next budget will be hardest

Surprised by lackluster state revenues, the governor expects this year to be the toughest yet to craft a spending plan, he said immediately following his first morning of yearly budget hearings.

Between state revenues lagging roughly $100 million below expectations in the first quarter and built-in increases in education and TennCare funding — as well as increased Tenncare enrollment — eating up new dollars, Gov. Bill Haslam said he will have to consider more in the way of reductions this year than he had in years past.

“Hopefully, we’re being very strategic and surgical in this instead of just saying, ‘OK, we’re going to take 3 percent everywhere,’” Haslam told reporters. 

Beginning his fourth year in office, this is the first with revenues falling short of forecasts, he said. The drop could mean losing dollars slated for this year — which ends in June — and shrink the pool of money available for the state to divvy out in 2014-2015.

“There’s a recurring effect to that. I think it’ll just make our decisions all that much harder,” said Haslam, who is beginning to hear proposed budget plans from state agency leaders this week.

He is asking them to present plans for 5 percent in department reductions, but said he expects any cuts he makes to be “strategic and surgical” enough to go easy on agencies that have seen hits to their budget in recent years.