Candidates share plans for possible downturn
NASHVILLE — Bill Haslam appears set to become the first Tennessee governor since Prentice Cooper left office in 1945 to avoid having a major economic recession occur on his watch.
But candidates now vying to become the Republican’s successor may not be so lucky.
While the U.S. and Tennessee economy recovered, albeit slowly at first, during the nine years since the
2008 Great Recession ended officially in June
2009, the next economic downturn is already overdue in the view of some experts.
So how do the men and women running to succeed the term- limited Haslam plan to handle what could be a challenging economic situation? It’s one that could strike a sharp blow to a $37.6 billion enterprise that employs some 47,500 workers in general state government and provides funding in areas ranging from public and higher education, health care for many of Tennessee’s poorest, transportation needs and law enforcement.
Five of the six major candidates asking for the job spoke to the issue Monday during a forum sponsored by the Chattanooga Times Free Press at the University of Tennessee at Chattanooga.
Participants were three of the four Republicans running: Knoxville businessman and former state economic commissioner Randy Boyd, state House Speaker Beth Harwell of Nashville and Franklin businessman Bill Lee, as well as two Democrats, former Nashville Mayor Karl Dean and state House Minority Leader Craig Fitzhugh of Ripley.
Boyd, chairman of Radio Systems Corp., which produces pet products and has more than $400 million in annual sales, noted he steered his company successfully through the 2008 recession.
“I’ve got the experience to lead a company and organization through difficult times,” Boyd said, adding he learned more from a government perspective after going to work for Haslam, first as a higher education adviser and then as commissioner over the Department of Economic and Community Development.
He said Haslam has a “really good practice” of having all commissioners or major agency chiefs each year present a list of proposed spending reductions of 3 to 5 percent they felt could be made, with decisions coming later by Haslam and his finance commissioner on what should be cut.
“The good news is that every year we would reduce the operating costs. It’s a practice I want to continue, will continue to make and try to find ways to be more efficient.”
Dean, who served two terms as Nashville’s mayor, said he’s been there on the issue, noting “I had to manage my way through the deepest recession since the Great Depression when I was in my first term. And I think you have to make some difficult decisions.”
He said he made a decision early on that “clearly you didn’t want to balance the folks in government by unbalancing the folks and families and businesses. So we had to make cuts. And we made cuts in almost every department, some by as much as 15 percent. It was difficult to do.”
Noting he had run for mayor and prioritized public education, public safety and economic development, Dean said he felt “those were the things that brought the city forward and I didn’t want to back away from those. So those were areas we protected.”
“I think one of the things we have to do as a state is be very conscientious about the fact that we are very much sales-tax dependent. There will be another recession … and we need to prepare for it.”
Businessman Lee, who owns the Lee Co., a building and construction services company that employs some 1,200 people and has a $250 million revenue budget, said one of the most important responsibilities a governor has is “to manage the budget.”
“We certainly have been in times of prosperity and we have been in times of difficulty. In business if you don’t manage a budget you go bankrupt. In government if you don’t manage a budget you raise taxes. And that’s not a good idea. What we have to do is look at how we can run the most efficient government.”
He said as a conservative, he also believes that “expanding government beyond an appropriate growth” is a “really bad idea. So we have to look at every aspect of our government and our budget.”
That requires looking at any number of things, he said, noting that after returning to the company following his first wife’s death he found himself having to make “deep cuts” in its budget from $100 million to $60 million.
Fitzhugh, a former House Finance Committee chairman, said “the odds are the next governor will be faced with a recession.” Noting the Tennessee Constitution mandates a balanced budget, he said, “it’s not hard to balance Xs and pluses and minuses. The key is what you put inside that budget to balance. And our budget is one that is what you cherish, what you think is most important is what you’ll fund.”
For him, that means “education is the first, health is the second and economic and community development and jobs are the third thing. So those would be the priorities.”
He also said Tennessee is the lowest-taxed state “from a state and local perspective in the country and when we do these cuts, these across-the-board cuts every year that the current governor has asked for, who gets hurt? Mostly mental health, mostly the developmental disability folks, mostly those who don’t have the ability to really speak for themselves.”
Harwell noted as speaker over the past eight years she has signed “eight budgets that are balanced for our state. And I am proud of that.”
As a one-time member of the Finance Committee, she said, “I understand when times are tough how difficult it can be to manage that budget. We talk … about ‘Oh, we balance our budget.’” But she noted in years past, desperate lawmakers have taken one-time money to use for recurring expenses.
“We have stopped doing that,” Harwell said. “I am proud of the fact we are a balanced-budget state. We have not raised taxes. I’ve been there during the difficult times, I’ve been there during the good times. And I will tell you nothing means more to me as the next governor of this state than balancing our budget every single year — not using any funny numbers but actually doing it in a responsible manner, and that is what I’m committed to doing.”
Harwell said, “It’s often said if you want to know what someone truly values, you look at their budget. And when you look at the budget of Tennessee … the two items we’ve increased funding for every year has been education and health care because we care about those two issues.”
The Sycamore Institute, a nonpartisan, Tennessee-based research institution, says Cooper, who left office in 1945, was the last governor not to have a recession start on his watch.
“The next governor of Tennessee will probably have to craft and manage the state budget during a recession,” the institute says.