Knoxville in 2008: The Economy - It Sucks

Eligible for Early Retirement, and Other Euphemisms

A whole lot of people got some unexpected (well, unwanted) vacation time this year, even here in East Tennessee, where we've been told that our economy is "too diverse" to feel the effects of this economic omnisuck. Here were some notable layoffs this year. Jewelry TV: 80 jobs in Knoxville, more than 200 throughout the state, cancels new $20 million headquarters; White Lily Flour: 72 employees, closes 125-year-old downtown plant; Brunswick Corporation: temporary shutdown of three Sea Ray plants in East Tennessee, 1,800 workers "furloughed"; ARC Automotive: 229 layoffs throughout year. Latest Knoxville Metro Area unemployment figures: 19,190, or 5.3 percent, are out of work. Same time last year: 12,550, or 3.5 percent, were out of work.

The First Cut: The Great Tennessee Hemorrhage of 2008

As we know, participating in the American economy is now officially impossible, and all but the wealthiest of us ought to just give up and try to catch this serfdom thing on the ground floor, get a good kitchen or stable job before the market's too full. For now, though, as we're yet to warm up to the New Feudalism entirely. We still have a democratic interest in the state of Tennessee as voters, and, just as importantly, a fiscal interest as taxpayers. And our state budget looks pretty screwed, for the obvious reason that it's so deeply connected to the economy.

The prudent people of Tennessee stop buying so much crap, so state sales taxes take a nosedive. We've consistently been in the top 20 among states for foreclosures, so that's going to screw with property taxes. And we all know what happens to any Tennessee politician who utters the words "state income tax."

Net result: the state is swimming in red ink, and, unlike the federal government, it's legally required to get its books running balanced and deficit-free by June 30, the end of the fiscal year. So where to cut?

Tennessee higher education, how fondly you must now look back at May, when Gov. Phil Bredesen was anticipating a mere half-billion dollar operating gap for Tennessee. In retrospect, it was an innocent, fancy-free time to be an institution of higher learning. It just didn't seem that way at the time.

Back then, Tennessee's public colleges and universities were going to have to deal with a painful $56 million cut in state funding for the 2008-2009 fiscal year—$21 million from the UT system, $11 million of that from UT-Knoxville alone. But everybody was going to be hurting, and one round of big cuts isn't that big of a deal, right?

It Wasn't Real Money Before?

And then everything got much, much worse right around October, when the state re-calculated just how deep it was going to be in the hole by the end of this fiscal year: more than $600 million! Another $17 million hit to the UT system budget, $6 million of that from Knoxville.

And then, finally, the governor made the announcement following late-November budget briefings that the state in general, and higher education in particular, would have to deal with some "real cuts," by which he ironically means crazy fairy-tale numbers: a budget fantastically out of whack ($800 million to $1 billion in debt) and cuts just whimsically deep (as much as $75 million from the UT system alone).

That could all mean cut or reduced programs, laid-off faculty and staff, and tuition hikes, which traditionally hit undergraduates the hardest.

If you're as narrow-minded as you're likely to become after giving up on ever eating a quite, peaceful Saturday meal in a restaurant on the Cumberland Avenue Strip, it can be hard to feel sorry about UT's budget woes. Higher tuition? Whatever. Maybe it's time to thin out that herd a bit anyway, you're prone to thinking.

Except it's not that time at all, according to just about everyone ever, unless this country doesn't mind slipping (further) into economic nightmare. By 2010, one year from now, economic and educational experts, including Gary Nixon of the state Board of Education, predict that nearly 70 percent of new jobs in this country will require at least some amount of college. And, according to a report done by the National Center of Public Policy and Higher Education, only 32 percent of 18-to-24-year-old Tennesseans are enrolled in college. The national average is 34 percent.

Hearing the People

The people at UT's Department of Audiology and Speech Pathology, which was the first major item the university recommended doing away with, thought the budget cuts were a very big deal. Also a surprise, given the timing of the public announcement. Then-Interim Chancellor Jan Simek, UT President John Petersen, and College of Arts and Sciences Dean Bruce Bursten seemed to have made the recommendation to cut the department by themselves, without consulting anyone who worked there. Not even ASP head Ilsa Schwartz was given advance warning before she received the memo from Bursten just two weeks before the mid-June Board of Trustees vote.

It seemed like a strange choice, too. The ASP program consistently ranks among the top 25 in the country, and it averages a near-100 percent rate of post-graduation employment, all at a lean $1.4 million cost to UT.

The ASP is also responsible for running four hearing and speech clinics on campus, collectively known as the Hearing and Speech Center. These clinics serve over 2,500 mostly low-income patients with hearing and speech impairments, making the clinics an obvious resource to the community. Plus, as it turns out, it's a mandatory resource. UT is required to keep the Hearing and Speech Center operating in some capacity until 2057, pursuant to a 1958 lease between UT and the Tennessee Hearing and Speech Foundation. Of course, they still could have axed the department and hired a private contractor to run the clinics, but that might have pissed off the growing group of protestors even more. Hundreds of ASP faculty members, students, and patients mobilized throughout campus in the week leading up to the late-June Board of Regents meeting, ultimately getting the department off the cut list.

Gas Prices, Gouging Complaints, and Other Unpleasantness Involving High Finance

On Sept. 15, some city was going to have to have the highest gas prices in the country, right? People get that, and they get that Tennessee uses gas from the Gulf Coast, so it's particularly susceptible to weather-based price fluctuations. They get all of that. They just think it shouldn't happen to them, here, specifically, probably ever. You know why? It's semi-rational, but really only semi-. It's because Pilot, one of the country's largest gas retailers, is here. Pilot lives here, and it works here. Pilot Jr. is the mayor. We see him eating at restaurants and jogging downtown, and we feel like that means we should never, ever have to pay more for a gallon of gas than Chattanooga.

But at the end of the day, as much as we want to believe that the Haslam family is hiding 2 billion barrels of oil inside the Lost City of El Dorado, which they had helicoptered here in 1981 and then covered up with the World's Fair Park, we know they don't.

Oh, Weigel's is here, too.

But these companies are simply retailers. They don't drill, refine, or even do a lot of their own transporting. They buy gas off the spot market on the Gulf Coast. And following the pipe damage from Hurricane Ike, it was $4.87 per gallon in the Gulf Coast prior to the local price jump. It's really easy to check that, actually.

But people were super-pissed. David Garrett Jr., a South Knoxville car salesman and occasional firebrand, got a petition together demanding that the state Attorney General's office investigate possible gouging at local gas stations. Rep. Stacy Campfield, who doesn't miss too many chances to be outraged, even stomped into the AG's Nashville office himself. But they had begun their investigation days before. No petition necessary. It's standard procedure when you receive more than 10,000 calls and e-mails. The same week, the Florida A.G.'s office subpoenaed Pilot, along with a number of other retailers, in a gouging investigation. Neither state pressed charges.