April 20, 2004

Thanks for Noticing

Tennessee Gov. Phil Bredesen has noticed that the State Funding Board - the group that sets the forecast growth rate for state tax revenues on which the legislature builds the state budget - is "getting a little politicized" in this story in the April 15 Knoxville News Sentinel, which I found via Blake Wylie's Nashville Files blog.

Bredesen warns the Funding Board not to give in to legislative pressure to up its revenue forecast so that legislators can stuff the budget with pet projects.

Bredesen is right to warn the Board, but he is wrong in saying the State Funding Board is "getting" a little politicized.

The truth is, the State Funding Board has been politicized for years. During the previous governor's administration, the Funding Board went along with the games-playing by Gov. Don Sundquist's finance commissioners, in order to claim that the state faced a "revenue shortfall," when the truth was that Sundquist was merely proposing massive unaffordable spending increases.

One year, the Chicken Little rhetoric from Sundquist and the Funding Board was exposed when the state ended a fiscal year of supposed "fiscal crisis" with a $49 million surplus.

Here's an op-ed column I wrote for the May 17, 2001, Nashville City Paper, titled "State Funding Board missing the mark,", which explains how the Sundquist administration politicized the Funding Board - and how the Funding Board (of which the governor is a member) played along. An excerpt:

Last year’s way-low projection was helpful to Sundquist. He used it to bolster his sky-is-falling rhetoric about deficits — until the General Assembly used $49 million of the surplus to fund this year’s budget.

This year, Sundquist upped the ante. He proposed a $1.5 billion spending increase over the current year’s $18.4 billion budget, creating the appearance of an $800 million deficit when combined with the Funding Board’s lower revenue forecast.

The governor is a member of the Funding Board, and they do make their forecast in secret. And last week, despite all those Fed interest rate cuts to spur the economy, they did lower their growth projections once again.

Also, here's a column I wrote for the February 21, 2002, Nashville City Paper that exposed some more of how the Sundquist administration politicized the Funding Board and manipulated revenue data to make a minor dip in the growth of tax revenue appear to be a major fiscal crisis.