- Associated Press - Tuesday, March 31, 2015

NASHVILLE, Tenn. (AP) - Republican Gov. Bill Haslam is withdrawing his effort to remove longevity bonuses for current state employees after running into staunch opposition in the Legislature.

As part of his late-session budget amendment introduced on Tuesday, Haslam now only wants to apply the change to new workers hired by the state.

State employees currently qualify for an annual bonus of $100 for each year of service - up to a maximum of $3,000 - paid out as a lump sum on the anniversary of their start date.

Haslam had originally sought to fold the bonuses into state workers’ salaries, halt future increases and use the savings to fund merit raises based on employee evaluations. By making the change, the pool of money for merit raises would shrink from $48 million to $32 million.

Other planned changes to the state’s $33.3 billion annual spending proposal for the budget year beginning July 1 include:


NEW STATE MUSEUM: Spending $120 million to cover the state’s share of building a new Tennessee State Museum near the Capitol. An additional $40 million must be raised from private donations. Some lawmakers question why the new museum gets priority over a new facility for the State Library and Archives, which faces moisture problems in its current building next to the state Supreme Court.


CORDELL HULL BUILDING: Directing $40 million toward renovating the Cordell Hull building on the state Capitol complex. Haslam last year called for demolishing the 60-year-old building after consultant Jones Lang LaSalle advised that the facility would be cheaper to tear down than to fix. But the administration reversed course in August, saying the building could be used as an overflow facility while other state buildings are overhauled in the future.


RAINY DAY FUNDING: Doubling this year’s contribution to the state’s emergency reserve pool known as the rainy day fund. Haslam originally proposed depositing $36.5 million in the upcoming budget year to bring the balance to $528 million. Under Tuesday’s proposal, the state would double that. The rainy day fund reached a high of $750 million in 2008, but was drawn down to as little as $284 million in 2011 as the state sought to fill budget gaps during the Great Recession.


TEACHER INSURANCE: Contributing $29 million to help cover the 11th month of teachers’ health insurance plans. While teachers carry year-round insurance the state currently only covers 10 months of coverage. The extra spending comes as the Haslam administration has been sued by seven southeastern Tennessee school districts over school funding concerns, while several others are also considering litigation.

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