Thursday, April 30, 2009

State Budget Cratering; Ramsey Warns of 'Scary Times' Ahead

Posted By on Thu, Apr 30, 2009 at 12:32 PM

click to enlarge oie_ramseykids.JPG
Lt. Gov. Ron Ramsey warned today the state's financial condition is worsening. Calling it "scary times," he said the budget shortfall has grown by roughly $200 million. "We thought it was bad when we came into session," Ramsey said. "We ain't seen nothing yet." His solution? Well, he doesn't really have one yet, but he's certain he still doesn't want to spend all that federal stimulus money to prevent cuts in higher education and across state government. Spending federal money now to stave off the dismantling of state government, that's irresponsible to Ramsey. Cutting services to the bone on the chance you might have to do it anyway in a couple of years, that's the Ramsey way. "We can't put this off. It's going to be tough," Ramsey told reporters. "Could we take this money and just kind of plug holes? Other states are apparently doing that right now. But that is the wrong fiscal thing to do." Our Q&A with the Senate speaker: Ramsey: We're going to be concentrating solely on the budget and from what I'm hearing from the governor and the constitutional officers and others we are in a heckuva shape. We thought it was bad when we came into session, we ain't seen nothing yet. This is getting into scary times. We're here and got elected to do a job. The only thing we have to do before we leave here is pass a balanced budget, but I've got a feeling the month of May is going to be no fun because we're going to have to sit here and work in a bipartisan way--and I meant that--working with the governor to figure out how we get through this situation. We're completely at the mercy of what's going on at a national level. ... When we get those figures, I gotta feeling we're going to have to jump in and hang on because it's not going to be fun. Q: At this point, you've got the stimulus money coming in, which is going to offset this. Ramsey: Oh, but it's not. Seriously it's not going to offset it because, if we use the stimulus money, you're using one-time money for recurring expenses. We'll have to figure out some kind of bridge to get there. But let me assure you, I hope I have a vested interest in what the budget looks like in January of 2011. Could we take this money and just kind of plug holes? Other states are apparently doing that right now, but that is the wrong fiscal thing to do. We need to make sure that we're using one-time money for one-time expenses. Now to close out the books this year, because we're going to be a month to go in the fiscal year with a huge deficit apparently, we may have to use some one-time money out of the rainy day fund or somewhere else to close out this year's budget. But I sure want to get as close as possible in the upcoming budget year to balanced the budget with recurring funds. Q: But that's not what the governor's proposing. Ramsey: I know. That's why we're going to work with him. Q: Do you want to make higher education make some cuts this year? Ramsey: I think some of the cuts will have to be accelerated, absolutely, I do. ... We can't put this off. It's going to be tough. Q: Cuts in higher ed and where else? Ramsey: Across the board. Some of those across-the-board cuts that were proposed but the governor pushed back probably won't be pushed back in my opinion. You know, I don't want to sit here and outline word for word where we are because, first of all, we don't have the figures. We're simply anticipating what they're going to be. Maybe we can cross our fingers. ... I don't want to make a lot of predictions, other than to say that I feel confident that some of the cuts are going to be deeper or at least accelerated into this year. Q: What do you do then with the stimulus money that was going to be used to plug these holes? Ramsey: We're figure out what to do with it. Once again, that's pure speculation. I know the philosophy where I am, but I haven't filled in all the holes in yet. We're working with this. ... I honestly believe that in some cases the stimulus money is going to make things worse because it does mask a problem. Q: If you don't fund higher ed at the 2006 level, then you forfeit that stimulus money. You're talking about hundreds of millions of dollars. Ramsey: Well, we're going to encourage them to use it in ways that don't start new programs. Once again, we're talking purely conceptual here, except for the fact that I know that's where we're going to end up in the end. Two weeks from now when we're sitting in this room right here and I have a better idea of where we're going, I'll be more than happy to be able to lay that out for you. Right now, all I'm saying is that we feel very confident that we're going to come in probably in the range of $200 million less than we thought, and we're going to probably have to make adjustments to cover that. That's going to take work and I don't know exactly how we're going to do, and I don't think the governor knows how we're going to do it. At our breakfast the other morning, he truly said, the words were in his mouth, that he's worried, and I'm worried too.

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