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Haslam Faces Challenges with Budget - John Dunn

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NASHVILLE, TN - Governor Bill Haslam faces one of the biggest tests of his administration, and how he tackles the state budget could affect you. Tax collections are lower than expected.

The business of building a state budget begins in a state capitol conference room, but this time around Governor Bill Haslam has a significant challenge. "I think this will actually be our hardest budget," says Gov. Haslam.

The problem starts with money. Tennessee is taking in less of it than expected. In just three months tax collections are off about $100 million less than estimates. Governor Haslam previously enjoyed a surplus of revenue, now there's a shortfall. In other words, cuts are coming.

"I think it will just make our decisions all that much harder. It's not just deciding between good things and bad things, it's good things and other good things," says Gov. Haslam.

There are two areas where extra money must be spent. The cost of education is going up because there are more students in Tennessee. The Affordable Care Act will cause more people to sign up for TennCare, taking up 60 to 70 percent of any budget increase. "Right now we can look at a real issue and say how much of our budget is driven by Medicaid," says Gov. Haslam.

Tennessee's Health Department is also worried about the effects of the Affordable Care Act. "I feel like we're kind of standing in a canoe and we don't want to make any sudden movements," says Commissioner Dr. John Dreyzehner.

The governor has asked department heads to consider how a five percent cut would affect operations. While it's too early to know what the cuts will be, it seems more and more likely they're inevitable.

The governor's budget hearings will continue for the next two weeks. In the end he must decide where your money will be spent, and what will be cut.

The Department of Education is asking for an extra $57 million next year, and that does not include a teacher pay raise, which the governor has said will be a priority for his administration.

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