August 18, 2005

Surplus Confusion Update

NASHVILLE - Today's Tennessean story about the state's revenue surplus may help clear up the confusion over two conflicting press releases issued yesterday by Gov. Phil Bredesen's office and his Department of Finance & Administration.

The Tennessean reports that "Gov. Phil Bredesen said yesterday that state revenue for the past fiscal year is about $100 million above estimates." But the F&A department yesterday put the revenue surplus for fiscal 2004-05 at $260.8 million.

The difference? F&A is comparing actual revenue to the amount of revenue forecast by the legislature in May 2004 for the 2004-05 fiscal year, which is the amount the legislature budgeted to spend in tht fiscal year. Bredesen's office is comparing the revenue to the updated revenue estimates for that the State Funding Board and the legislature adopted in May 2005 for the almost-finished 2004-05 fiscal year. The legislature upped the estimates by around $140 million, then promptly worked with the administration to spend the extra money during the last three months of the fiscal year.

Tennessee's actual revenue surplus over the amount necessary to balance the original FY 2004-05 budget is $260.8 million. The Bredesen administration is apparently working intentionally to obscure that fact as Bredesen's claim of a much lower surplus mirrors one made by his revenue commissioner three weeks ago.

By comparing actual revenue to the revised estimates instead of admitting tht the administration already spent more than half of the surplus, the administration is deceiving the people of Tennessee.