The state of Tennessee is testing the volunteer spirit of its employees in an upcoming round of voluntary job buyouts.
Without a state income tax, Tennessee relies on sales tax as a major source of revenue. Lola Potter, public information officer for the state department of finance and accounting, explains that those proceeds have plunged with consumer confidence in recent months, along with other funding sources. Now the state needs to trim $468 million from the next fiscal year's budget.
As a result, the state government extended 12,000 buyout offers to employees, and hopes that 2,200 of them will accept, thereby saving Tennessee $64 million in recurring costs. The buyout program's total cost to the state is $50 million.
"Each agency has its own plan," Potter says. "There is not a mandate of how they'll operate. The mission they were given is to find a way to deliver services without any effect on the quality, with 5 percent fewer employees."
The buyout package includes four months salary, an additional $500 bonus for each year of state employment, payment of accrued leave, and two years of tuition assistance for volunteers wishing to continue their education at a state college. Buyout volunteers can reapply for a state job two years after accepting the deal.
Whether the economy will improve by then, however, is anyone's guess.
"There's a lot of argument among economists if this is going to be a long recession or something we recover from this calendar year," Potter says. "Our thinking had been that we'd pick up toward the end of the calendar year. Now a lot of economists don't think that's going to happen. The reason we wanted to reduce the budget is just in case we're sitting here this time next year without seeing any [economic] growth."
The program is voluntary for now, but the state may lay off employees to reach its target numbers.
State government ranks as the tenth-largest employer in Memphis with 5,247 locally based staffers (about 1,200 fewer than Wal-Mart stores).
Local departments that could be affected include agriculture, child services, department of corrections, environment and conservation, health, and veterans' affairs. A complete list can be accessed at www.tn.gov.