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« Um... No | Main | Is Bredesen Administration Double-Counting Revenue to Set Higher Spending Baseline? » August 29, 2007Bredesen's spokesman on illegal budget: "We feel comfortable with what we've done."
As first reported here Wednesday morning, Tennessee Attorney General Robert E. Cooper Jr. has issued a legal opinion regarding the budget process, saying the constitution and relevant state law requires the governor to calculate how much the budget exceeds the state constitution's growth cap using the previous budget year's appropriations. The Bredesen administration has been calculating the cap number based on the previous year's revenue - allowing the administration to hide hundreds of millions of dollars in over-the-cap spending. Here is the full response from Lenker to questions about the AG's opinion: "The Governor has not seen the legal opinion, but he will certainly review it. We feel comfortable with what we've done. The state of Tennessee has followed the most prudent and conservative budgeting practices, most recently noted in the upgraded bond rating from Moody's."The mention of the bond rating report is a diversion from the real issue - Moody's doesn't concern itself with the constitutionality of a state's budget, only with whether it has sufficient revenue to pay its bills and the debt service on its bonds. Moody's is a credit-rating agency. It doesn't care about how the state gets its money, only that it has enough money - the same way Mastercard doesn't care if you earn your money legally or illegally, it only cares that you pay your bills on time. Lenker says the administration "has followed the most prudent and conservative budgeting practices." The question is, did they follow the law? The answer increasingly appears to be "no." "We feel comfortable with what we've done." - I'm guessing that tune will change once Bredesen reviews the AG's opinion and the law. I find it hard to believe that the Bredesen administration actually would defend its unconstitutional budgeting practices by saying, "Well, it got us a good bond rating." That's not going to fly in court against the legal challenge that's now virtually assured... Posted in Tennessee Government News
Comments
There are different kinds of bond ratings, depending upon what is pledged to make sure that the bonds are paid off. The state of Tennessee has a bond rating for issues that have the full faith and credit of the government behind the bonds and they have bonds issued that only pledge the revenue generated from the activity. If the revenue is not adequate, the state has no obligation to rescue the lenders. The state has revenue bonds issued for schools and home mortgages. The plan is to extend the issue of revenue bonds for toll roads too. The additional debt through revenue bonds is of concern because the state would be heavily pressured to rescue the activity even though there was no legal requirement to do so. There are at least five exampoles of toll road revenue failures in Florida, one in Texas and one in Virginia. Every time, the state steps in and does a rescue. Posted by: Danny L. Newton at August 29, 2007 6:19 PMAll is maya. Oughtta be the slogan for the Bredesen administration. Posted by: Donna Locke at August 29, 2007 9:51 PMPost a comment
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NASHVILLE - Tennessee Gov. Phil Bredesen's press secretary says the governor "has not seen" the state attorney general's legal opinion that says, in effect, the budget the governor signed into law is unconstitutional, but, says press secretary Lydia Lenker, "We feel comfortable with what we've done."