Bonus Proposal Causing Tennessee State Budget Hold-Ups

NASHVILLE, Tenn. - A proposal to give state workers a one-time $500 bonus is a major sticking point in negotiations over a budget plan, said lawmakers trying to reach consensus and possibly adjourn next week.

Republican Senate Speaker Ron Ramsey of Blountville told The Associated Press after a Republican gubernatorial debate in Memphis on Tuesday night that such a bonus is "illogical."

He said Democratic Gov. Phil Bredesen plans to layoff 1,700 state employees and it's hard for him to "rationalize ... giving a bonus to the ones you're keeping."

Ramsey said he has received written correspondence from state workers that they don't want the bonus. He said the money should instead be saved so the state can pay for buyout packages should they become necessary.

"Why spend that money on bonuses when you could use that for buyouts?" he said.

House Democratic Caucus Chairman Mike Turner of Nashville said Wednesday that state employees have told him they support the bonus, "and that's what we're going with."

"Right now we're sticking with state employees," Turner said. "They haven't had a raise in some time."

To provide for the bonus, as well as keep employees' 401(k) match program, House budget writers said earlier this week that they plan to tap the state's reserves by an additional $147 million.

The House version is similar to Bredesen's original plan and an alternative proposal from Senate Democratic Leader Jim Kyle of Memphis, but differs from a Senate Republican proposal, which would eliminate the bonus for state employees and phase out their match program.

The House plan would also create a $20 million relief program for Tennessee flood victims and restore agricultural enhancement grants and the state employee Career Ladder program that would be eliminated under the Senate plan.

The Senate Finance Committee was scheduled to take up the governor's proposal and the Senate plan on Wednesday. Turner said he doesn't plan to bring the House budget plan up in committees this week, meaning lawmakers will be in session at least another week.

"I'd rather get it right, than hurry and get something wrong," he said.

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Associated Press Writer Erik Schelzig contributed to this report.