Without Budget, Tennessee Shuts Down

NASHVILLE, Tenn. – Tennessee lawmakers tried to turn back the clock this weekend, but they couldn't avoid a partial government shutdown Monday morning after negotiators failed to put a new budget in place in time for the new fiscal year, beginning July 1.

While 22,000 workers were told not to come to work Monday, House and Senate lawmakers tried to prevent the inevitable by moving the clock back to 11:45 pm in the Senate chamber. But with no end in sight on how to resolve the $800 million shortfall, lawmakers had to acknowledge the government was shutting down.

"We've been at this four years. Every day we put it off, we do a little more damage to Tennessee families," said Gov. Don Sundquist. "We'll do everything we can to provide basic services for the health, security and welfare for the citizens of Tennessee" during this time.

As part of the shutdown, the state's public universities will cancel or postpone summer classes.

Public health, safety and welfare, however, are excluded from the legislative impasse. Child support payments, health care for the poor and uninsured, mental health, prison operations and highway patrols are still up and running. Retirement benefits and employee health insurance will also be paid, but road construction will halt, and drivers licenses won't be issued.

Sundquist wants the state Legislature to pass an income tax to pay for the shortfall. Tennessee, whose constitution requires a balanced budget, is one of nine states without a personal income tax.

The Legisature has been plagued with budget problems for the last three years, but after two special sessions could not come up with a solution. The situation has state employees, residents and lawmakers furious.

"I'm disappointed in our Legislature because they're not taking care of the problem," said Phil Brannon, dean of students at at the York Institute, a state-funded high school.

"People think we're the most inept bunch that's ever served in this House," Rep. Les Winningham told his colleagues during an overnight session Monday morning.

Tennessee is not alone. California started its fiscal year Monday without a budget, though a shutdown was not ordered. The state often misses its deadline, but government operations continue at last year's operating levels.

New Jersey got a last-minute reprieve from shutdown when Gov. James McGreevey signed the $23.4 billion budget early Monday.

But McGreevey said he was forced to freeze $1 billion of the state's new budget until his corporate tax was approved because the budget must be balanced.

"We will clean up this mess and we will get this done, but we need the corporate business tax plan as part of this solution," McGreevey said.

Several other states made the cut-off with budgets signed into law over the weekend. Connecticut lawmakers approved a $13.2 billion budget that raises taxes for the first time since state income taxes became law in 1991.

Pennsylvania and Delaware also made their July 1 deadlines.

The Associated Press contributed to this report.