Governor Brings ‘Business Sense’ into Office
Published Apr 07, 2003
Gov. Phil Bredesen
Tennessee Gov. Phil Bredesen is a no-nonsense kind of guy, at the helm of state government when Tennessee, and indeed most states, are struggling fiscally. Yet, Bredesen is used to evaluating progress in terms of black and red and has set his sights on building a financially sound, progressive government.
Founder of HealthAmerica Corp. – a health-care management company that eventually grew to more than 6,000 employees and traded on the New York Stock Exchange – Bredesen arrived on Capitol Hill with a reputation for applying business savvy to governmental management. During his two terms as mayor of Nashville (1991-1999), he recruited Dell Computer Corp., Hospital Corporation of America and the Tennessee Titans; built a new library system; and spearheaded public-private partnerships that resulted in the new Country Music Hall of Fame and Museum and the Frist Center for the Visual Arts.
Bredesen took office in January 2003 and wasted no time in putting his philosophies to work on the state’s budget. He found a legislature eager to cooperate with his businesslike approach to governing, and pushed through a balanced budget without the political wrangling that has marred Tennessee’s legislative process for years. The budget made systematic cuts across the board, and eliminated the practice of paying for recurring expenses with nonrecurring funds. Bredesen also negotiated a better deal with the federal government for payments into TennCare, the state’s health-care system. In June, he headed to New York to personally ask the nation’s three government bond-rating agencies to re-evaluate Tennessee’s status based on improved, efficient budgeting.
Q: Things were much different on Capitol Hill in Nashville this spring when your budget, representing drastic cuts, quietly passed the General Assembly. That’s compared to recent years, when protestors converged on the capital city’s downtown and state troopers were called in to ensure peace.
A: People want to be with a winner, and we need to show people that we’re winners here. Just this spring, we accomplished a balanced budget without troopers surrounding the Capitol. When those kinds of things happen, they hurt so much more than you can ever imagine, and when you fix them, they help so much more than you can ever imagine. Just in terms of the image of Tennessee, we want to look like a state that has our issues under control. … Ultimately just the talk about Tennessee becomes much more important than anything we say in an advertisement in an industry magazine. If there’s a sense that Tennessee is an exciting place, something is happening here, companies are relocating here, that will do so much more for the willingness of other companies to take a look at us.
Q: When you talk about state government budget challenges, you ultimately discuss job creation as the long-term solution. Why?
A: If our approach to financing our state’s services and needs relies simply on higher and higher taxes, I think we’re making a terrible mistake. It seems to me the right answer is to grow the economy and, with that growth, the tax base, so that everyone can prosper together. If we have a strong tax base and a growing economy, we’ll have the money we need to protect and educate and help those who are less fortunate. If we don’t grow our economy and we let it decline, there’s no amount of new taxes or rushing off to Washington with our hat in our hand that’s going to keep us from falling behind.
Q: That sounds like good business. What did you learn in the business world that you bring to this job?
AI think that there are a lot of things that I learned in the business world. One fundamental thing right now is that you can have all the exciting plans for the future you want, but if you’re not running the basics of the business, if you’re not counting the revenues right and keeping the expenses in line, you’re never going to have an opportunity to build those new products and deliver those new services. The same is very much true in government. I certainly have a lot of things that I would love for state government to do, but until we get our expenditures under control, until we balance the income and outgo, we are not going to have an opportunity to do these things. The work for me in this first year has been just getting the ship floating again.
Q: Early in your administration, you fulfilled a campaign promise to create a high-level Jobs Cabinet to focus on job creation. What’s the value of bringing together seven state department heads with representatives from higher education and business trade groups?
A: Too often government, and certainly state government, gets very insular. Departments are their own fiefdoms and they are not working together. I think to effectively recruit industry, to effectively help industry that’s already here, we need to have the different pieces of state government that bear on those industries really working together. These things are the responsibility of not only ECD, but of a host of other departments. The idea of the Jobs Cabinet was to bring together in one place all the people who have something to contribute to the process of creating jobs, so that we are working together at the top level and can short-circuit the sometimes bureaucratic isolationism that gets in the way of doing the best possible job.
Q: Why the inclusion of education officials in the Jobs Cabinet?
A: Their ability to fulfill specific training needs, to turn out the people to fill these jobs in the years ahead, is a fundamental part of how we recruit and grow business.
Q: Education was one of your top priorities during your eight years as mayor of Nashville and is one of your top priorities today. How do you draw the parallel between the strength of Tennessee’s education system and the strength of its economy?
A: A great deal of our challenge is not only to grow jobs, but to grow good jobs. It doesn’t do us any good to create a bunch of jobs that are going to go to Mexico in five years. So many of the jobs of the future are going to be knowledge-based jobs, jobs that require specific expertise and background. If we’re not giving young people and, frankly, people in mid-career, the opportunity to learn new skills, we are not only shortchanging the citizens, but shortchanging our state’s ability to attract these industries and to grow.
Q: What are some of Tennessee’s strong economic sectors?
A: The state has certainly enjoyed some exciting manufacturing announcements lately, both new companies and the expansion of existing industry.
While recruiting a new company is always fun and exciting and I love going to the ribbon cuttings, the reality is that far and away most new jobs are going to come from the expansion of existing companies or spinoffs from existing companies. That is the most important source, and we need to keep our focus there. I’m proud of my record in Nashville in economic growth. We estimate that for every 10 jobs that were created, 8.5 of them came from the growth of existing industries, while 1.5 were recruited from the outside.
I want Tennessee to have a very diversified economy. There are other states and regions where the economy is too focused on one industry, and any industry is going to have its ups and downs. I want to keep a broad look. Agriculture is important, and manufacturing is certainly an important component. Automotive manufacturing, both the assembly plants and the suppliers, is a significant piece of our economy and one that I want to grow and encourage. Those are good-paying jobs, and they increasingly are highly technical jobs that require education. I would like us to become much more of a player in the area of high-tech, but that’s not something you can do everywhere; you must have the infrastructure in place. But in places like Memphis, Knoxville and Oak Ridge, we have some enormous opportunities to grow that segment of the economy as well.
Q: How can state government encourage the kind of entrepreneurial start-ups and research spinoffs that result in a vibrant high-tech sector?
A: For the entrepreneurial activities, universities are great engines. We have some tremendous opportunities in that regard, with universities in every major city in the state. I’m hoping that in working through them and encouraging them, we can get more and more people to stay here and try out their business ideas. We are a low-tax state, which makes Tennessee an attractive place to do that sort of thing. We’re a low-cost-of-business state, which makes it an attractive place for companies to start up. We need to make sure we have the people graduating from the schools that it takes to staff these new businesses, because they are going to be largely in knowledge-based areas. Those kind of entrepreneurial start-ups are going to be an important source of jobs and wealth in our state in the years ahead.
Story by Sharon H. Fitzgerald
Photo by Greg Emens
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