State Cutting Over 2,000 Jobs Due To Tax Shortfall

Bredesen Says Tax Collections "Deteriorating Dramatically"

Wednesday, May 7, 2008

Gov. Phil Bredesen said Wednesday that state tax collections have been "deteriorating dramatically" in recent months, and it will be necessary to make another $468 million in budget cuts.

He said that will necessitate cutting 5 percent of state jobs - or 2,011.

Gov. Bredesen said he hopes to have the cuts made on a voluntary basis - with cash payouts used as a retirement incentive.

At a news conference in Nashville, he said April tax collections showed the largest drop since records began to be kept in 1961.

He said the first quarter was the third worst on record, and the second quarter "is certainly shaping up to be worse than that."

The governor said it is time to act "because realistically we are probably not at the bottom of this yet."

He said he ruled out tax increases as well as going to the rainy day fund, saying the latter option may be needed next year.

Gov. Bredesen said his budget will continue to maintain BEP funding for Pre-K-12, but he said there would be no BEP.2 funds or new pre-K classrooms.

The new round of state cuts comes on top of $180 million in reductions announced in January.

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