30 Percent Fed Funding Cut = 5,131 State Employee Layoffs

A 30 percent reduction in federal funds flowing into state government would translate into the layoffs of 5,131 state government employees, according to documents released Tuesday by the state Department of Finance and Administration.
The discharged workers would range from University of Tennessee graduate research positions to clerks processing unemployment benefit checks, according to the department-by-department survey.
The estimates were produced in response to Gov. Bill Haslam’s call for statements on how each department of state government would deal with a cut in federal funding of either 15 percent or 30 percent. (Summary of documents HERE.) The move comes with Congress contemplating major reductions federal spending in the coming year.
“We don’t expect reductions to this drastic, but believe it is responsible to prepare,” said Finance Commissioner Mark Emkes in a statement distributed with the documents. “We expect reductions in federal funding will be targeted to specific programs, but this exercise helps departments prepare to make reductions.”
About 40 percent of the state’s overall $30 billion budget for the current year comes directly from the federal government and a 30 percent reduction is calculated to be a loss of $4.5 billion.
That would be partially offset by saving about $826 million in state dollars in “match money” now used to draw federal funding. Some federal programs require states to put up some of their own funds before being eligible for federal funding.

The $826 million could be applied to reduce some cutbacks or spent elsewhere, depending on decisions of the governor and the Legislature. The documents released Tuesday do not make any suggestions on how the saved match money should be used.
In job losses, the most heavily impacted arms of state government are the Department of Intellectual and Developmental Disabilities (DIDD), which would lose an estimated 1,152 employees with a 30 percent federal funding reduction, and the Department of Human Services (DHS), which would lose 1,595 employees.
For DIDD, the loss of funds could mean closure of both the Greene Valley Developmental Center in Greeneville, a residential development center for adults with developmental and intellectual disabilities, and the Harold Jordan Habilitation Center in Nashville, which houses intellectually disabled individuals charged with crimes.
For TennCare, which is about two-thirds funded by the federal government, the cuts would not mean a loss of staff but would translate into reductions in payments to doctors, hospitals and other health care providers by $917 million and slashing pharmacy and dental care coverage for enrollees, according to the summary documents.
Departments with relatively little federal funding see little impact. For the state Department of Revenue, for example, the only listed loss is the inability of auditors to attend a conference on motor fuel tax issues now covered by $3,300 in federal funds.
The University of Tennessee estimated that 148 jobs would be eliminated with a 30 percent loss of federal funding, including 55 at the UT Agricultural Institute plus 10 graduate research positions and 56 jobs at the UT Health Sciences Center in Memphis.
UT’s report also says that cuts in federal funding “could negatively impact the system’s ability to attract new research awards.”
The reduction at a 30 percent cut for K-12 school programs is pegged at $276.6 million, with school nutrition programs and funds to assist disadvantaged and disabled children listed as suffering the biggest losses.
Also noted is the loss of $77,600 for “arts education teacher training and national model arts education program in Knox County.”
Some departments have notes on the impact at some length. For example, the Department of Labor and Workforce Development, which handles claims for unemployment benefits, gave this assessment of a 30 percent federal funding cuts on operations:
“Employees who have lost their jobs due to increased imports or shifts in production to foreign countries will not receive job retraining services. Unemployment rate information will take more time to deliver. The amount of services delivered to veterans and employers will be reduced.
“Individuals’ ability to become independent of public assistance through the Food Stamp program will be greatly inhibited. Thirty-six career centers will be closed, dramatically affecting levels of services provided to job seekers and employers.”

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