General fund surplus hits $1.35B through first 8 months of budget year
The state’s general fund surplus reached $1.35 billion in March, the eighth month of the budget year.
Sales taxes, which make up the vast majority of general fund revenues, were $40 million more than projected for the month and have accounted for $941 million of the surplus to date. Corporate franchise and excise taxes were $69 million more than expected in March, and $419 million over estimates for the year.
Here’s the full release from the state Finance Department:
Department of Finance and Administration Commissioner Butch Eley today announced that Tennessee tax revenues exceeded budgeted estimates in March. Overall March revenues totaled $1.26 billion, which is $57.1 million or 4.75 percent more than the state received in March of 2020 and $112.1 million more than the budgeted estimate for the month.
“Most of the growth in March can be attributed to sales and use taxes, corporate taxes and business taxes, which have been strong contributors to revenue growth for most of the year, “ Eley said. “March sales tax revenues, based on February sales tax activity, were positive across all industries except the restaurant and food services industry and apparel and accessories retailers. Additionally, sales tax receipts for the month were supported by approximately $39.7 million from remote sales and marketplace facilitator laws. To date, online sales tax revenues have accounted for about 65.4 percent of all sales tax growth to the state.
“We continue to be pleased with the overall growth in total taxes this fiscal year and we are encouraged at the prospect of future growth as Tennesseans become more comfortable resuming some activities. We are optimistic but cautious in anticipation of revenues in the months ahead.”
On an accrual basis, March is the eighth month in the 2020-2021 fiscal year.
General fund revenues were $115.2 million more than the budgeted estimate while the four other funds that share in state tax revenues were $3.1 million less than the estimates.
Sales tax revenues were $40.4 million more than the estimate for March and were 7.45 percent more than March 2020. For eight months revenues are $940.8 million more than estimated. The year-to-date growth rate for eight months was 7.15 percent.
Franchise and excise tax revenues combined were $69.1 million more than the budgeted estimate in March and the growth rate was 7.54 percent. For eight months, revenues are $419.1 million more than the estimate and the year-to-date growth rate is 4.85 percent.
Gasoline and motor fuel revenues for March decreased by 9.44 percent compared to March 2020 and were $6.3 million less than the budgeted estimate of $87 million. For eight months, fuel tax revenues are below estimate by $16.4 million.
Motor vehicle registration revenues were $2.2 million more than the March estimate, and on a year-to-date basis they are $9 million more than estimates.
Tobacco tax revenues were $1 million more than the March budgeted estimate of $18.6 million. For eight months, revenues are $8 million more than the year-to-date budgeted estimate.
Privilege tax revenues were $2.9 million more than the March estimate. On a year-to-date basis, August through March, revenues are $58.2 million more than the estimate.
Business tax revenues were $6.3 million more than the March estimate. For eight months, revenues are $27.1 million more than the budgeted estimate.
Hall income tax revenues for the month were $0.5 million more than the budgeted estimate. For eight months, revenues closely match the year-to-date budgeted estimate.
Mixed drink, or liquor-by-the-drink, taxes were $2.4 million less than the March estimate, and on a year-to-date basis, revenues are 23.5 million less than the budgeted estimate.
All other taxes were less than budgeted estimates by a net of $1.6 million.
Year-to-date revenues, August through March, are $1.42 billion more than the budgeted estimate. The growth rate for eight months is 4.97 percent. General fund revenues are $1.35 billion more than the budgeted estimate and the four other funds are $69.4 million more than estimated.The budgeted revenue estimates for 2020-2021 are based on the State Funding Board’s consensus recommendation of November 26, 2019 and adopted by the second session of the 111th General Assembly in June 2020. Also incorporated in the estimates are any changes in revenue enacted during the 2020 session of the General Assembly. These estimates are available on the state’s website at https://www.tn.gov/content/tn/finance/fa/fa-budget-information/fa-budget-rev.html.
Knoxville ballpark, Tebow charity among entities getting grants in Lee budget
While big-ticket items like a sales tax holiday on food may be getting much fo the attention in Gov. Bill Lee’s budget amendment, Capitol-watchers have also been pouring over the fine print to see what other interesting items are getting funding.
The AP’s Jonathan Mattise spotted a $13.5 million grant for the minor league ballpark development former gubernatorial candidate Randy Boyd is proposing for downtown Knoxville. Another $2 million would pay for renovations at the Hermitage, the Nashville home of President Andrew Jackson, and $1.2 million for the Tim Tebow Foundation’s Her Song project serving human trafficking victims.
Here’s a look at some of other grants included in the budget amendment:
| Grants and Community Initiatives | Amount |
| The Sports Authority of the County of Knox and the City of Knoxville, Tennessee | $13,500,000 |
| City of Memphis – Youth Sports Complex | $10,000,000 |
| City of Johnson City – Walnut Corridor Development | $5,000,000 |
| University of Memphis – Carnegie Designation | $5,000,000 |
| End Slavery TN – Serving Human Trafficking Victims – Year 1 of 3 | $3,500,000 |
| Fayette County – Courthouse Renovation | $3,000,000 |
| Human Coalition – Serving Pregnant Women and Children in Need | $3,000,000 |
| Music City Executive Airport | $2,000,000 |
| Hermitage Foundation | $2,000,000 |
| City of Memphis – Renovation of Levitt Shell | $1,300,000 |
| Her Song – Tim Tebow Foundation – Serving Human Trafficking Victims – Year 1 of 3 | $1,200,000 |
| Associated Builders and Contractors Greater TN Chapter – Knox County CTE Center | $1,000,000 |
| Renewal House, Inc. – Serving Women and Children in Need | $1,000,000 |
| Teach for America – Teacher Support in High-Need Areas | $1,000,000 |
| Gospel Music Association – GMA Center | $1,000,000 |
| Hope Smiles – Oral Health Safety Net | $800,000 |
| Niswonger Foundation – College and Career Awareness Activities | $700,000 |
| Carroll Academy – Rural Juvenile Alternative Education | $600,000 |
| TN Anti-Slavery Alliance – Services for Human Trafficking Victims | $600,000 |
| Agape Child and Family Services, Inc. – Serving Families in Need | $500,000 |
| Corner to Corner – Entrepreneurship Support for Communities in Need | $500,000 |
| Delta Dental of TN / Smile 180 Foundation – Oral Health Safety Net | $500,000 |
| tnAchieves – Supports Transition to College | $500,000 |
| YMCA of Memphis and the Mid-South – Education / Health Support for Young Children | $500,000 |
| YMCA of Middle TN – Mentorship / Education for Kids in Need | $500,000 |
| Men of Valor – Re-Entry Support Services | $499,500 |
| TN Builders Education Foundation – CTE Construction Expansion | $478,000 |
| Science Alliance – STEM Educational Museums | $450,000 |
| TN Association of Business Foundation – Public-Private Advanced Manufacturing Partnership | $400,000 |
| The Next Door, Inc. – Recovery and Support for Re-Entry | $400,000 |
| The Jason Foundation, Inc. – Mental Health Student Support | $305,000 |
| Blount County – Senior Center | $300,000 |
| Town of Jonesborough – Agriculture Education | $300,000 |
Lee details amendments to annual spending plan
Gov. Bill Lee is making his end-of-session amendment to the state’s annual spending plan. Here’s a release from the governor’s office detailing the proposal:
NASHVILLE, Tenn. – Today, Tennessee Governor Bill Lee announced his amendment to the proposed Fiscal Year 2021-2022 budget.
The amendment includes $580 million in available funds as a result of fiscal prudence. These funds will be invested in strategic long-term projects that focus on a return to pre-pandemic priorities and deliver critical services while not growing government. The budget amendment also includes nearly $100 million for a two-week sales tax holiday on all grocery sales, purchases at restaurants, and all prepared food.
“This proposal supports Tennesseans by strategically investing in long-term initiatives that will move our state forward,” said Gov. Lee. “I’m especially proud to provide tax cuts to get money back to Tennesseans to encourage them to frequent industries that have been disproportionately and negatively impacted this year.”
This amendment reflects the Governor’s priorities and includes record investments in broadband, economic development, safety and law enforcement, increasing reserves, and education.
“Due to Tennessee’s strong financial leadership, Tennessee has been ranked number one in fiscal stability by US World News & Report in both 2019 and 2020,” said Commissioner of Finance and Administration Butch Eley. “Our prudent and cautious approach has established Tennessee as a leader in fiscal conservatism, and we thank the General Assembly for their partnership in these efforts.”
Notable investments in the FY 21-22 budget amendment include:
Tax Cuts
- $25M for a two-week sales tax holiday for groceries
- $75M for a two-week sales tax holiday for restaurants and all prepared food
- $16M to reduce the professional privilege tax by 25 percent
K-12 Education and Mental Health
- $250M trust fund to assist K-12 families who are facing significant mental health issues in the wake of COVID-19
- $18.5M to transportation to students for summer learning
- $2M to provide an additional 4 high quality, grade aligned books and resources over the summer for the 88,000 rising first graders in Tennessee
Higher Education
- $79M to eliminate current TCAT waitlists statewide, currently at 11,400 students
- $25M to Tennessee Promise to permit increases in the Hope Scholarship
- $4M to increase Agriculture Extension Agents at University of Tennessee and Tennessee State University
Rural & Agriculture
- $50K to support the state fair (in addition to the $250,000 recurring in originally proposed budget for total of $300K and $5M non-recurring)
- $3M to provide additional funding for rural projects as part of the Rural Economic Opportunity Fund (in addition to $21M in originally proposed budget for total of $24M)
Safety
- $500K to provide gun safety programming for children
- $17M to replace radios for state troopers
- $18M to improve the statewide disaster communications system
- $680K to add 4 new Homeland Security Agents
Economic Development
- $5M to provide grants to restore and preserve historic downtowns across the state
- $3M to increase employment in Tennessee through the Small Business Innovation program
Transportation
- $3M recurring and an additional $10M nonrecurring to provide additional direct funding to airports across Tennessee through the Transportation Equity Fund (total $50M investment in air infrastructure)
To view the full budget amendment, click here.
Tennessee ranks fifth from bottom in COVID-19 vaccination rate
Tennessee ranks fifth-worst among the states for the percentage of residents who have received at least one dose of COVID-19 vaccines. The 30.3% rate was above only Louisiana, Georgia, Alabama, and Mississippi, according to CDC data compiled by The Washington Post.
Tennessee slipped another spot among states delivering both doses of the vaccine, with its rate of 18.2% besting only Alabama, Utah, and Georgia.
Here are the counties with the highest percentage of fully vaccinated residents:
- Loudon (26%)
- Meigs (23%)
- Pickett (23%)
- Unicoi (23%)
- Washington (23%)
- Cumberland (22%)
- Madison (22%)
- Sullivan (22%)
Those with the lowest rates are:
- Moore (8%)
- Sequatchie (10%)
- Grundy (10%)
- Lauderdale (11%)
- Cannon (11%)
Among the state’s largest counties, Shelby’s rate was 17%, Davidson and Knox were at 19%, and Hamilton reached 21%.
The rollout will likely be further complicated by a recommendation by federal authorities to pause the adminstration of the single-shot Johnson & Johnson vaccine.
Alexander to be honored in joint convention
Lamar Alexander, who served three terms in the U.S. Senate and two as governor, is scheduled to be honored in a joint convention of the General Assembly on Monday afternoon.
Alexander, a Maryville Republican who didn’t seek re-election last fall, will also be in Nashville to tour the new Tennessee State Library and Archives facility north of the state Capitol.
Alexander’s first speech to a joint convention of the House and Senate occurred more than 42 years ago when he delivered his first budget address in February 1979.
White House circulates states’ infrastructure needs, but doesn’t detail how much each would get
The White House is putting out a state-by-state breakdown of infrastructure needs it says would be addressed by Democratic President Joe Biden’s $2.3 trillion proposal dubbed the American Jobs Plan.
While the cheat sheets list states’ specific deficiencies, they don’t break out how much of the federal money would be directed to each of them under the plan. So take it for what it’s worth.
Republicans are blasting the plan for going well beyond the scope of what is traditionally considered to be infrastructure.
Here’s the full release from the Biden administration:
For decades, infrastructure in Tennessee has suffered from a systemic lack of investment. The need for action is clear:
— ROADS AND BRIDGES: In Tennessee there are 881 bridges and over 270 miles of highway in poor condition. Since 2011, commute times have increased by 7.7% in Tennessee and on average, each driver pays $209 per year in costs due to driving on roads in need of repair. The American Jobs Plan will devote more than $600 billion to transform our nations’ transportation infrastructure and make it more resilient, including $115 billion repairing roads and bridges.
— PUBLIC TRANSPORTATION: Tennesseans who take public transportation spend an extra 67.9% of their time commuting and non-White households are 5.6 times more likely to commute via public transportation. 21% of trains and other transit vehicles are past useful life. The American Jobs Plan will modernize public transit with an $85 billion investment.
— RESILIENT INFRASTRUCTURE: From 2010 to 2020, Tennessee has experienced 40 extreme weather events, costing the state up to $20 billion in damages. The President is calling for $50 billion to improve the resiliency of our infrastructure and support communities’ recovery from disaster.
— DRINKING WATER: Over the next 20 years, Tennessee’s drinking water infrastructure will require $8.7 billion in additional funding. The American Jobs Plan includes a $111 billion investment to ensure clean, safe drinking water is a right in all communities.
— HOUSING: In part due to a lack of available and affordable housing, 396,000 renters in Tennessee are rent burdened, meaning they spend more than 30% of their income on rent. The President proposes investing over $200 billion to increase housing supply and address the affordable housing crisis.
— BROADBAND: Nearly 10% of Tennesseans live in areas where, by one definition, there is no broadband infrastructure that provides minimally acceptable speeds. And 46.8% of Tennesseans live in areas where there is only one such provider. Even where infrastructure is available, broadband may be too expensive to be within reach. 17% of Tennessee households do not have an internet subscription. The American Jobs Plan will invest $100 billion to bring universal, reliable, high-speed, and affordable coverage to every family in America.
— CAREGIVING: Across the country, hundreds of thousands of older adults and people with disabilities are in need of home and community-based services. The President’s plan will invest $400 billion to help more people access care and improve the quality of caregiving jobs.
— CHILD CARE: In Tennessee, there is an estimated $768 million gap in what schools need to do maintenance and make improvements and 48% of residents live in a child care desert. The American Jobs Plan will modernize our nation’s schools and early learning facilities and build new ones in neighborhoods across Tennessee and the country.
— MANUFACTURING: Manufacturers account for more than 15% of total output in Tennessee, employing 357,000 workers, or 11.5% of the state’s workforce. The American Jobs Plan will invest $300 billion to retool and revitalize American manufacturers, including providing incentives for manufacturers to invest in innovative energy projects in coal communities.
— HOME ENERGY: In Tennessee, an average low-income family spends 8-10% of their income on home energy costs forcing tough choices between paying energy bills and buying food, medicine or other essentials. The American Jobs Plan will upgrade low-income homes to make them more energy efficient through a historic investment in the Weatherization Assistance Program, a new Clean Energy and Sustainability Accelerator to finance building improvements, and expanded tax credits to support home energy upgrades.
— CLEAN ENERGY JOBS: Tennessee has outsized potential for innovative energy technologies including carbon capture and sequestration and geothermal energy generation, that create good paying union jobs. As of 2019, there were 79,626 Tennesseans working in clean energy, and the American Jobs Plan invests in building that industry through a reformed and expended Section 45Q tax credit and extending renewable energy tax credits.
— VETERANS HEALTH: Tennessee is home to over 470,000 veterans, 9.4% of who are women and 45% who are over the age of 65. The President is calling for $18 billion to improve the infrastructure of VA health care facilities to ensure the delivery of world-class, state of the art care to veterans enrolled in the VA health care system. This includes improvements to ensure appropriate care for women and older veterans.
It’s budget amendment week in Tennessee! (UPDATED)
Gov. Bill Lee is scheduled to present his annual budget amendment this week, usually a sign that the legislative session is nearing its end. The updated spending plan comes at a complicated time for policymakers given the influx of federal COVID-19 relief funds and the prospect of even more money from President Joe Biden’s infrastructure package.
Lee in a speech to the Tennessee Chamber of Commerce last week hinted that a tax cut will be part of his budget amendment. Though details remain scarce, it will be interesting to see how the Lee administration tries to thread the needle on meeting federal guidance that money from the COVID relief fund can’t be used to fund tax cuts.
UPDATE: The Tennessean reports Lee plans to propose a two-week sales tax holiday on food purchased at restaurants and supermarkets. The proposal is estimated to cost $100 million in forgone revenue.
Attorney General Herbert Slatery and his counterpart from Kentucky have filed a lawsuit seeking to undo the strings attached to the federal funds.
House adopts resolution calling for convention on congressional term limits
The state House has voted 53-34 to join a call for a national constitutional convention to set term limits for members of Congress. While the margin appears lopsided, the measure sponsored by Rep. Chris Todd (R-Jackson) received only three more votes than the minimum needed to clear the chamber. The resolution now heads for the consideration in the Senate.
Tennessee’s congressional delegation has seen some turnover in recent years. Rep. Scott DesJarlais of Winchester and Chuck Fleischmann pf Chattanooga have the longest tenures among Republicans as they are in their sixth terms. Rep. David Kustoff (R-Memphis) is in this third term, while Reps. Tim Burchett (R-Knoxville), Mark Green (R-Ashland City), and John Rose (R-Cookeville) are in their second. Rep. Diana Harshbarger (R-Kingsport) is a freshman.
Among Democrats, Rep. Jim Cooper of Nashville is in his 10th term and Rep. Steve Cohen of Memphis is in his eighth.
Here’s a release from the group U.S. Term Limits lauding Thursday’s floor vote:
Nashville, TN — Today, the Tennessee House of Representatives passed HJR8, a resolution declaring that the state legislature seeks to join other states in proposing an amendment to the U.S. Constitution to establish term limits on Congress. The bipartisan vote was 53 yeas – 34 nays, overwhelmingly in favor of passage. The effort, sponsored by state Rep. Chris Todd, is being spearheaded by the nonpartisan, grassroots nonprofit, U.S. Term Limits.
Rep. Chris Todd said, “Now, more than ever we see the need for limiting the terms of the U.S. Congress. You would be hard-pressed to adequately defend the loss of new ideas and vision we all observe and the potential corruption that comes with being a career politician in Congress.”
According to a recent RMG Research poll, 78% of likely voters in Tennessee support term limits on Congress, including strong support among Republicans, Democrats, and independents alike.
U.S. Term Limits President Philip Blumel commended the Tennessee House of Representatives saying, “The people of Tennessee are lucky to have public servants who see what is going on in D.C. and are willing to take action to fix it. They know that Congress won’t set term limits on itself. Therefore, it is the obligation of the states to do so.”Once the senate passes the sister resolution, Tennessee will join other states in the call for a convention for the exclusive purpose of proposing term limits on the U.S. Congress. Thirty-four state legislatures must pass similar resolutions on the topic and approve the term limits amendment before it goes to the states for ratification.
Voucher supporters’ poll indicates wide backing for school choice
School voucher supporters are out with some new national polling showing wide support for school choice. Opponents have long argued the polling questions are loaded to turn out the most favorable results.
The polling comes as a faction of state Republicans take their latest run at ending automatic paycheck deductions to pay union dues to the Tennessee Education Association, the state’s largest teachers’ union. Similar efforts have foundered in committee and on the Senate floor in prior years.
The TEA’s political action committee is one of the most generous donors to state lawmakers of both parties.
Here’s the release from the American Federation for Children:
Parents and families have been on a rollercoaster when it comes to K-12 education in the time of COVID-19. A new poll from Real Clear Opinion Research finds overall support for school choice is increasing as parents need more options than ever.
Major findings:
— 71% of voters back school choice. This is the highest level of support ever recorded from major AFC national polling with a sample size above 800 voters.
— 65% support parents having access to a portion of per-pupil funding to use for home, virtual, or private education if public schools don’t reopen full-time for in-person classes.
Statement from John Schilling, President of the American Federation of Children:
“The continued very strong support among voters for school choice and spending flexibility for parents of school-aged children is a clear message for policymakers. Parents and families are demanding greater choice in K-12 education and they expect policymakers to put the needs of students ahead of the special interests who are bound and determined to protect the status quo.
“The need for education freedom is at an all-time high and it’s reaffirming to see many state policymakers stepping up and supporting school choice across the country. Thirty-two states have introduced 36 bills to create or expand educational choice and we urge policymakers in these states to get these bills over the finish line on behalf of families and students.”
Full Details:
Question: School Choice
School choice gives parents the right to use the tax dollars designated for their child’s education to send their child to the public or private school which best serves their child’s needs. Generally speaking, would you say you support or oppose the concept of school choice?
Support:
All: 71%
Race & Ethnicity:
White: 73%
Black: 66%
Hispanic: 68%
Asian: 66%Party ID:
Democrat: 69%
Republican: 75%Question: Funding students vs. funding systems
On average, American taxpayers spend $15,424 per student nationwide on K-12 public education. Would you support or oppose giving parents a portion of those funds to use for home, virtual, or private education if public schools do not reopen full-time for in-person classes?
Support:
All: 65%
Race & Ethnicity:
White: 65%
Black: 63%
Hispanic: 60%
Asian: 69%Party ID:
Democrat: 66%
Republican: 67%Question: Faith in teachers’ unions
In many states, teachers’ unions have advocated to keep public schools closed and continue virtual learning instead of reopening school buildings. Meanwhile, 92% of private Catholic schools were operating with in-person learning in September. Does this make you feel more or less favorable towards teachers’ unions that oppose re-opening?
More Favorable: 36%
Less Favorable: 47%
Date: March 12-17, 2021
+/- 2.44%More school choice polling can be found at www.SchoolChoicePolling.com
Where to watch Gov. Lee’s roundtable on criminal justice reform
Gov. Bill Lee is hosting a virtual roundtable on criminal justice reform Wednesday featuring former U.S. House Speaker Newt Gingrich, former Texas Gov. Rick Perry, and others.
The event starts at 11:15 a.m. Central, and can be viewed at one two places:
Facebook: https://www.facebook.com/GovBillLee/
