State employees, teachers won't get pay increase

NASHVILLE, Tenn. (AP) -- Gov. Bill Haslam says he won't be able to give state employees and teachers a pay increase next year mainly because of reductions due to an ongoing decline in revenue collections.

The Republican governor discussed his budget proposal with reporters on Monday. State finance officials are scheduled to present the measure to legislative finance committees on Tuesday.

Haslam said poor revenue collections are forcing him to make $150 million in reductions for the remainder of this budget year, and $160 million for next year.

Financial officials said sales tax collections have fallen short by $33 million, and franchise and excise taxes -- also known as business tax collections -- are down $215 million.

Haslam says he regrets not being able to give pay raises, and that state officials are investigating why businesses taxes, in particular, continue to fall short of projections.

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