Gov. Bredesen yesterday outlined his proposal to cut the state budget by $468 million. Here's a summary:

• BEP fully funded, with an increase of $59 million for the inflationary costs for both pre-K and the traditional K-12 system. No new pre-K classrooms or BEP expansion, savings $109 million. Every teacher and every classroom is funded, with inflation.

• Higher education cut $56 million (4.1%). UT and the Board of Regents will oversee budget cuts without raising tuitions.

• Forgoing $35 million addition to rainy day fund, eliminating planned $80 million TennCare expansion for a new medically needy program.

• $229 million in reversions back to general fund from departments.

• No state employee salary increases. Reduction of workforce by 5%, approx. 2000 people. Voluntary reductions through buyout program, funded by one-time expenditure of $50 million from reserve funds. Only offered to employees whose department head has committed to permanent reductions. If buyouts do not achieve the necessary reductions there will be layoffs this summer.

The Governor's office says the proposal protects pre-K-12 education and that cuts are based on "asking for no new taxes, matching recurring revenues to recurring expenditures to ensure long-term financial stability, and preserving the state’s Rainy Day fund to ensure the state can weather an economic downturn of undetermined length."

Unsigned editorials are seldom useful, but this one from the Boston Globe is an exception. It's really a news analysis and should have run on the front page, but still, it contains a strong fact basis that everyone should be aware of.

In the run-up to the war, President Bush's top economic adviser, Larry Lindsey, said it might cost as much as $200 billion. Defense Secretary Donald Rumsfeld said the actual amount would be just $50 billion to $60 billion, calling Lindsey's projection "baloney," much as Rumsfeld had belittled General Eric Shinseki's estimate that it would take several hundred thousand US troops to fight the war successfully.

Both Lindsey and Rumsfeld were far from the mark. Nobel laureate economist Joseph Stiglitz and Harvard University's Linda Bilmes have just published "The Three Trillion Dollar War: The True Cost of the Iraq Conflict," and they consider that figure a conservative estimate.

$3 trillion! It's a debt that our grandchildren will find hard to pay off.

The Tennesseean reports:

Senate Speaker Ron Ramsey, R-Blountville, appears less concerned about the use of reserve funds -- and about how dire the economic situation might be.

"We're in pretty good shape to weather this, a lot better than we were the last time there was an economic downturn -- assuming there is one," he said. "There may not even be one."

Ramsey didn't rule out tapping the TennCare reserves or the rainy day fund.
"We may determine that it's raining now and that that fund now needs to be used," he said.

Allow Gov. Bredesen to retort:

"And that will happen over my dead body."

From the Knoxville News Sentinel, $150M revenue shortfall covered:

Most of a projected revenue shortfall for the current year will be covered by unspent money in the Cover Tennessee program and TennCare plus $44 million in general cuts to most state agencies, Finance Commissioner Dave Goetz said Tuesday.

[..]

Further, TennCare spending will be about $45 million less than projected when the budget was enacted last year, primarily because delays in obtaining a new federal government waiver to bring some "medically needy" people back on the rolls, Goetz said.

Also, the state now expects to spend $37 million less than planned on its Cover Tennessee insurance program, primarily because fewer people have enrolled than anticipated.

I guess the State of Tennessee is lucky to have so many sick and "medically needy" people so we can balance the budget by denying them health care. On the other hand, the uninsured problem must be solved if few people are signing up for Cover Tennessee.