Governor Phil Bredesen unveiled his revised budget proposal for Fiscal Year 2008-2009. In an address to a joint session of the General Assembly, Bredesen outlined his plan to trim the budget he proposed in January by an additional $468 million.

State revenue collections have deteriorated significantly in recent months with the national economic recession. April was the worst month for collections year over year since the state began tracking revenues in 1961 with five percent negative growth.

"Taxpayers expect us to live within our means," Bredesen said. "As a state, we have to do the same thing that families and private sector companies do in tough times and tighten our belts. We have to match the amount of money that's coming in to the amount we plan to spend, and we have to protect our savings so we have the financial wherewithal to outlast this recession."

Despite the reductions, the proposed budget protects public education by fully funding Tennessee's Basic Education Program and provides new dollars for inflationary growth. This fulfills Bredesen's commitment to continually fund growth in pre-K-12 education although no new pre-K classrooms will be added next year.

"We won't be able to do as much to advance our priorities in education as we'd like to this year, but I will do my best to ensure we don't lose the ground we have worked so hard to gain," Bredesen said.

In addition to protecting pre-K-12 education, Bredesen applied three guiding principles in making cuts to the budget, 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.

The Rainy Day Fund, essentially the state's savings account, had been virtually depleted when Bredesen took office in 2003. Since then, that fund has been rebuilt and the Governor has repeatedly stated his intention to leave that account untouched.

"It's unclear whether we've hit the bottom of the economy's downward spiral, so the responsible approach is to change our spending now and hold on to our savings as long as we can," Bredesen said.

Last week, Bredesen announced a voluntary buy-out plan to reduce the number of employees in the executive branch by five percent. Details of the package will be announced later this month, but Bredesen said he believes the state can put an attractive package together that will appeal to enough individuals to achieve the targeted reductions on a voluntary basis. He emphasized the plan will be fair and respectful to employees, minimizing the impact on individuals and disruption to delivery of services.

"We've had to make very tough choices, but tight years don't need to stall our progress," Bredesen said. "By managing carefully and identifying fundamental areas of focus, we can continue to move Tennessee forward even in tough times."