A $17 million cut to the University of Tennessee system’s budget is just one part of a sweeping, $106 million emergency reduction the state’s finance commissioner says is necessary because of huge tax revenue shortfalls.

“If through some economic miracle things were to turn around, we could restore some of these funds if revenues rebounded,” said Finance Commissioner Dave Goetz. “But right now, I don’t know of anyone who believes that will happen.”

In a conference call with reporters this afternoon, Mr. Goetz said he is asking the majority of the state’s agencies to revert budgeted funding back to the state. Included in the $106 million he is calling back is $44 million in TennCare funding, $42 million in higher education funding and approximately $20 million from other agencies.

The recall is in response to a nationwide financial crisis reported in September, Mr. Goetz said. Though state officials will not finalize the most recent tax collection figures until Thursday, a 30-percent reduction in car sales is a good indication that the news will not be good, he said.

Sixty-two percent of the state’s revenue comes from sales tax. Within that, 10 to 12 percent is from auto sales.

Depending on future economic conditions, additional cuts may have to be taken if state officials do not decide to dip into Tennessee’s $750 million “rainy day fund,” according to Mr. Goetz.

“This is an interim step,” he said.

See tomorrow’s Chattanooga Times Free Press for full coverage.

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