Gov. Bill Lee touts legislative victories, glosses over setbacks
Gov. Bill Lee is touting his legislative victories in a press release Monday morning. They include his $3.3 billion roads plan, $1 billion to add and upgrade Tennessee Colleges of Applied Technology, and $400 million in tax cuts.
The governor didn’t get everything he wanted. For example, lawmakers reduced his $100 million ask for crisis pregnancy centers to $20 million, cut in half his planned 200% match for executive branch workers, and stopped $9 million in state employee salary hikes.
Here is the release:
Continue readingNASHVILLE, Tenn. – On Friday, Tennessee Governor Bill Lee marked the close of the 2023 legislative session, which includes the successful passage of his $56.2 billion budget and full legislative agenda as outlined during his State of the State address in February.
“To prepare Tennessee for continued growth and prosperity, we’ve made strategic investments to cut taxes, strengthen our workforce, ensure educational opportunity and modernize transportation infrastructure across our state,” said Lee. “I commend the General Assembly for its partnership to pass conservative measures and maintain Tennessee’s reputation for strong fiscal stewardship.”
Lee’s agenda included the landmark Transportation Modernization Act, historic legislation that will create a new transportation strategy and invest $3.3 billion to accommodate Tennessee’s record growth, address traffic congestion and meet transportation needs across rural and urban communities without raising taxes or taking on debt.
The roster of budget and legislative priorities also dedicated $250 million to Tennessee’s Rainy Day Fund, bringing totals to an historic $2.05 billion, and included significant investments in tax relief, K-12 education, Tennessee’s skilled workforce and conservation. Notably, Lee led a comprehensive school safety proposal to enhance physical security in public and non-public schools across Tennessee.
Highlights from Lee’s agenda include the following:
Transportation & Infrastructure Modernization
• $3 billion to the Transportation Modernization Fund to alleviate urban congestion and fund rural road projects across the state, which includes $750 million allocated to each of Tennessee’s four TDOT regions
• $300 million to expand the State Aid Program for local road projects, allocating 15 times more funding toward local communities than they receive each year for transportation projects
• Ensures that Tennessee has the resources necessary to meet current and future transportation needs by engaging in Public-Private Partnerships (P3s), Alternative Delivery Models and Electric/Hybrid vehicle fee parityEconomic Opportunity & Tax Relief
• More than $400 million in tax cuts for Tennessee families and businesses through the Tennessee Works Tax Act, one of the largest tax relief measures in Tennessee history
• $273 million for a one-time, three-month sales tax holiday on grocery items, providing tax relief for Tennessee families
• More than $150 million in annual small business tax relief, including raising the exemption threshold for the business tax, exempting the first $50,000 of net income from excise tax and protecting the first $500,000 in property investment from the franchise tax
• $64 million to simplify tax administration and conform with the federal bonus depreciation provisions of 2017 Tax Cuts & Jobs Act, allowing businesses to more quickly recover costs and further incentivize investment in Tennessee production
• Provides foundation for supporting Tennessee’s continued economic growth, aligning Tennessee with more than 30 states by adopting “single sales factor” apportionment for franchise and excise taxSkilled Workforce
• Nearly $1 billion to complete the TCAT Master Plan to improve 16 existing TCATs, replace seven outdated facilities and build six brand new TCATs at strategic locations across TennesseeEnhanced School Safety Measures
• $30 million for more than 100 Homeland Security agents across all 95 counties to serve Tennesseans and students in both public and non-public schools
• $140 million for one full-time, armed School Resource Officer (SRO) for every public school
• $40 million for public school security upgrades
• $14 million for private school security upgrades
• $8 million for additional School-Based Behavioral Health Liaisons across the state
• Enacts a multi-tiered accountability plan to ensure exterior doors are locked while students are present
• Requires that private security guards receive active shooter training prior to being posted at schools
• Requires every school district to establish threat assessment teams to ensure students are connected to support services and behavioral health professionals when appropriate
• Requires every public and private school to develop annual safety plans, including a newly required incident command drill for school leaders and law enforcementGreat Schools
• $350 million in additional funding to local education agencies through Tennessee Investment in Student Achievement (TISA)
• Combined with $750 million in the base budget, new recurring state funding for the education formula totals more than $1 billion
• Includes $125 million for teacher pay raises
• Increases the minimum teacher salary to $50,000 by 2026, making Tennessee a top-10 state for teacher pay in the nation, and protects teachers and taxpayers by ensuring school districts no longer collect union dues
• Includes funding to extend summer learning camps and expand the eligibility age to Kindergarten through 9th gradeStrong & Healthy Families
• $330 million in shared savings under our first-in-the-nation TennCare Medicaid waiver will help provide for the health of mothers and infants in our most vulnerable communities, providing care at no additional burden to Tennessee taxpayers that will:
• Cover the cost of diapers during the first two years of a baby’s life for mothers on TennCare, becoming the first state in the nation to support parents in this way
• Expand TennCare to underserved parents, supporting an extra 8,100 parents each year
• Establish continuous coverage for children, ensuring no lapse in coverage for children for at least a year, which will help an estimated 10,000 children remain enrolled
• Make permanent Tennessee’s post-partum coverage benefit, ensuring a full year of TennCare coverage to support approximately 3,000 new mothers every year
• Adjust TennCare’s income threshold for pregnant women to 250% of the federal poverty level to cover an additional 2,400 new mothers in need every year
• $20 million for Crisis Pregnancy Provider Support Grants to support crisis pregnancy non-profits, improving access to healthcare and information for expecting mothers
• $10.25 million for TN Fosters Hope grant funding to elevate high quality care for children and families impacted by foster care and adoption, allowing providers to expand services to foster and adoptive families
• $29 million to expand programming for children with complex or special needs that face challenges being placed in a traditional foster or adoptive home by further developing the provider network and providing respite and long-term care
New spending in Gov. Bill Lee’s budget proposal
Here is a look at the $7.38 billion in new spending (including $796 million from federal and other sources) contained in Gov. Bill Lee’s spending plan for the budget year beginning in July:
| Department | New spending (federal/other sources) |
| Transportation – General Fund Subsidy | $3,312,123,000 ($6,123,000) |
| F&A. TennCare | $863,138,300 ($546,799,800) |
| Miscellaneous Appropriations | $800,585,400 |
| Education (K-12) | $515,556,800 ($30,205,600) |
| Safety | $498,813,100 |
| Economic and Community Development | $254,817,500 |
| Children’s Services | $193,477,900 ($106,306,700) |
| Environment and Conservation | $187,521,300 ($20,549,000) |
| Finance and Administration (F&A) | $173,403,400 ($273,200) |
| Higher Education | $162,404,100 |
| Commerce and Insurance | $48,285,200 ($4,754,200) |
| Mental Health and Substance Abuse Services | $46,176,800 ($14,316,500) |
| Intellectual and Developmental Disabilities | $42,993,000 ($15,707,700) |
| Correction | $39,268,000 |
| Health | $34,311,100 ($1,786,600) |
| Commissions | $34,219,700 ($29,750,000) |
| Tennessee Bureau of Investigation | $32,792,900 ($1,673,000) |
| Agriculture | $19,817,900 ($782,400) |
| Military | $17,129,300 ($981,400) |
| Labor and Workforce Development | $15,387,100 |
| Court System | $11,937,800 |
| General Services | $9,901,300 ($5,223,000) |
| Treasury Department | $9,878,000 ($7,042,000) |
| Tourist Development | $8,476,000 |
| Attorney General and Reporter | $7,353,900 ($922,000) |
| Comptroller of the Treasury | $7,126,900 |
| District Attorneys General Conference | $4,920,700 ($652,400) |
| District Public Defenders Conference | $4,305,200 |
| Secretary of State | $3,548,000 |
| Veterans Services | $3,299,600 |
| Wildlife Resources Agency | $3,166,500 |
| Revenue | $2,200,000 |
| Human Resources | $2,163,700 ($2,163,700) |
| Board of Parole | $452,900 |
| Human Services | $376,000 ($83,200) |
| Office of the Post-Conviction Defender | $38,100 |
| Executive Department | $13,700 |
| Legislature | $0 |
Lee: Unclear when voucher program can get off the ground following high court ruling
Republican Gov. Bill Lee is hailing the Supreme Court’s decision upholding school vouchers but says “a lot of steps” are still required before the program allowing parents in Nashville and Shelby County to spend taxpayer dollars on private school tuition can go live.
“Once we determine the speed with which the court will make its final decisions, then we can move forward with the particulars to make sure this works and fits, and how it is that we roll it out,” The Associated Press quoted the governor as saying on Friday.
The Supreme Court ruled in a 3-2 decision that the voucher program doesn’t violate the state constitution’s home rule protections, which prevent the General Assembly from passing bills targeted at specific counties without local buy-in. The voucher law affects school districts — which aren’t covered by the home rule provision — and not the counties that fund them, the high court ruled.
Despite the voucher program being frozen since 2019, the Lee administration has included a recurring $29 million item in the budget to cover its costs in the event legal challenges were turned back. But the money has been dedicated toward other priorities, including for the spending plan for the budget year beginning on July 1.
It remains to be seen how much appetite lawmakers have to revisit the voucher question. Of the 51 House members who voted for the final version of the bill in 2019 (just one more than the constitutional minimum), only 37 are up for re-election this fall. Here’s the list of voucher backers who will no longer be around next year:
Mike Carter (R-Ooltewah). Died of pancreatic cancer in May 2021.
Glen Casada (R-Franklin). Not running again this year. Lost bid for Williamson County clerk earlier this month.
Michael Curcio (R-Dickson). Not running again this year.
John DeBerry (D-Memphis). Lost re-election bid as an independent in 2020 after state Democrats decided he couldn’t run in their primary. Now in the Lee administration.
Bill Dunn (R-Knoxville). Didn’t run again in 2020. Now in the Lee administration.
Mark Hall (R-Cleveland). Running for state Senate this year.
Matthew Hill (R-Jonesbough). Lost Republican primary in 2020.
Timothy Hill (R-Blountville). Didn’t run again in 2020. Lost bid for Congress.
Andy Holt (R-Dresden). Didn’t run again in 2020. Now in the Lee administration.
Bill Sanderson (R-Kenton). Stepped down in August 2019.
Jerry Sexton (R-Bean Station). Not running again this year.
Robin Smith (R-Hixson). Resigned in March after pleading guilty to participating in a kickback scheme.
Rick Tillis (R-Lewisburg). Lost Republican primary in 2020.
Micah Van Huss (R-Gray). Lost Republican primary in 2020.
Two other representatives abstained when the vote was initially recorded, but later changed asked the clerk to have their votes changed to yes. The moves are considered a formality because they only be accepted if it doesn’t change the outcome. Neither won’t feature in the next General Assembly:
Martin Daniel (R-Knoxville). Didn’t run again in 2020.
Brandon Ogles (R-Franklin). Not running again this year.
Lee’s budget amendment is out. Here’s what’s in it.
Gov. Bill Lee’s annual budget amendment is out, marking the beginning of the end of the legislative session. As first reported by Axios on Monday, the plan includes issuing up to $500 million in bonds in support of a new domed stadium in Nashville to replace the current home of the NFL’s Tennessee Titans (initial debt service would be up to $55 million).
According to slides presented by the administration, the majority of the funding for the new stadium would come from Metro Nashville and private sources.
Also in the governor’s plan:
— $80 million for a one-month mortarium on the state’s 4% sales tax on groceries.
— $66 million for air carrier support and $12 million for general aviation.
— $20 million to reduce the professional privilege tax on brokers, lawyers, doctors, and lobbyists from $400 to $300 per year.
— $20 million for riverfront development in Memphis.
— $17 million in grants to prepare a Nashville track for a NASCAR race.
— $15 million for voting machines with a paper trail.
— $10 million for the National Civil Rights Museum in Memphis.
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.
Lee gives preview to annual budget address
Gov. Bill Lee is giving a preview to his annual State of the State address in a video released Monday morning.
Democrats on Friday made their prebuttal, which can be viewed here:
Here are some excerpts from Lee’s speech issued from a press release sent Monday:
Budget and Legislative Priorities
“We have conservative proposals for your consideration that will reduce crime, support strong families and get our economy back up to speed, especially in rural Tennessee. Our proposals honor the individual yet benefit the state as a whole, and they will leave us well-positioned for the recovery that has already begun across our state.”
Celebrating 225 Years of Statehood
“We will celebrate that since 1796 the ordinary has made us extraordinary and remember that generations before us have not just weathered but excelled in the cycle of perseverance, character and hope. I will once again travel to all 95 counties to reach the unsung people and places that make our state who she is.”
Vision for K-12 Education
“The reason we place so much focus on education is because students should be prepared for productive lives, not just the latest standardized test. I recently had a conversation with Commissioner Schwinn that the mission of the Department of Education should be simple: Students should be prepared for life beyond the classroom.”
Rural Investment
“Whether it’s running a small business, accessing virtual learning or accessing health care via telemedicine, slow internet speeds have many in rural Tennessee left at a disadvantage. A significant, one-time investment, combined with significant private investment, will get broadband to just about every community in Tennessee, and tonight, that’s exactly what I’m proposing.”
Pro-Life & Pro-Family
“But being pro-life isn’t just about defending the unborn and we must also think about how to use our passion for this issue to improve the lives of struggling families. My administration is preparing a number of new initiatives that we’ll announce throughout the year that will make Tennessee a national leader in foster care and adoption.”
Here is the schedule for your 2020 Tennessee state budget hearings
Gov. Bill Lee’s administration is holding annual budget hearings with the heads of Tennessee agencies next week. The hearings will be live-streamed at www.tn.gov.
Here’s the schedule of events.
Monday, November 9
9:30-10:00 a.m. – Opening presentation from Department of Revenue and Dr. Bill Fox regarding Tennessee’s financial outlook.
10:00-10:30 a.m. – Revenue
10:45-11:30 a.m. – Health
1:00-1:15 p.m. – Labor and Workforce Development
1:45-2:45 p.m. – Economic and Community Development
3:00-3:30 p.m. – Military / TEMA
3:45-4:15 p.m. – Tourist Development
Tuesday, November 10
9:30-10:30 a.m. – Education
10:45-11:45 a.m. – Higher Education
1:00-2:00 p.m. – TennCare
2:15-3:15 p.m. – Children’s Services
3:30-4:30 p.m. – Mental Health and Substance Abuse Services
Thursday, November 12
9:30-10:30 a.m. – Intellectual and Developmental Disabilities
1:00-2:00 p.m. – Human Services
2:15-3:15 p.m. – Correction
3:30-4:00 p.m. – Veterans Services
Friday, November 13
9:30-10:30 a.m. – Safety and Homeland Security
10:45-11:15 a.m. – TBI
11:30 a.m. -12:00 p.m. – Finance & Administration
1:00-1:45 p.m. – General Services
2:00-2:45 p.m. – Human Resources
Monday, November 16
9:30-10:00 a.m. – Financial Institutions
10:15-10:45 a.m. – Commerce and Insurance
11:00-11:30 a.m. – Agriculture
1:30-2:15 p.m. – Transportation
2:30-3:15 p.m. – Environment and Conservation
3:30-4:00 p.m. – Education Lottery Corp.4:00 – Governor Bill Lee Media Availability
House GOP picks an unusual bargaining chip in budget debate: Retaining the Hall income tax
Speaker Cameron Sexton (R-Crossville) presides over a House floor session on June 1, 2020. (Erik Schelzig, Tennessee Journal)
For years, the contest among legislative Republicans was over who could move to eliminate the state’s Hall Income Tax the quickest. Now it appears House Republicans want to hold on to the last vestige of the tax on earnings from stocks and bonds for another five years.
The Daily Memphian‘s Sam Stockard reports the House plan would keep the 1% tax on the books until 2025, pulling in about $49 million per year as the state scrambles to make up for revenues lost during the coronavirus pandemic.
The Senate wants to keep the levy on it’s current path toward expiration on Jan. 1.
Look no further than House Speaker Cameron Sexton (R-Crossville) to illustrate the political importance of doing away with the Hall tax. As Sexton told the told the Crossville-Cumberland County Chamber of Commerce in 2011. ”
We don’t want to be a state that penalizes people for investments or for saving … It’s also bad policy. We shouldn’t penalize people for saving for the future.
Will Sexton really want to have to explain to constituents — a large portion of whom are retirees — why his first session as House speaker included a resurrection of the hated Hall tax? Probably not. Many political observers see the Hall tax item as a bluff by the House to try to negotiate concessions out of the Senate.
The question is whether House Republicans are really just negotiating with themselves.
State sales tax collections drop $106M in first full month of coronavirus
Tennessee’s sales tax collections decreased by $106 million in the first full month of the coronavirus pandemic compared with the same month last year, a $13% drop.
General fund revenues missed projections by $144 million in May and have fallen short of expectations by $308 million through the first 10 months of the budget year.
Here’s the full release from the Department of Finance and Administration:
NASHVILLE – Tennessee Department of Finance and Administration Commissioner Butch Eley today announced that revenues for May were $981.9 million, which is $197.3 million less than the budgeted monthly revenue estimate. State tax revenues were $184.7 million less than May 2019 and the overall revenue for the month represented a negative growth rate of 15.83 percent.
“May sales tax collections represent consumer spending that occurred during April, when Tennesseans were staying at home and many businesses were closed in response to the COVID-19 pandemic,” Eley said. “While sales of autos, apparel, furniture and restaurants dropped extensively, building materials and food stores sales experienced considerable growth. The state also realized large drops in gasoline tax receipts, motor vehicle title and registration taxes and mixed drink revenues.
“We responded quickly to develop plans that would mitigate revenue shortfalls at the outset of the pandemic and now the work begins to bring spending in line with what economists predict we will experience. We are encouraged about the improving employment numbers in Tennessee and while we hope for solid recovery trends, we are preparing for a longer and slower growth period, managing our budget conservatively as we work to help all of Tennessee recover from this unprecedented economy.”
As previously noted last month, the Tennessee Department of Revenue extended the due date for certain taxes on April 6, 2020 and the extensions can be found on their website at https://www.tn.gov/revenue/news/2020/3/31/tennessee-extends-certain-tax-deadlines-due-to-covid-19.html.
Lee outlines budget cuts due to economic impact of coronavirus
Gov. Bill Lee speaks at a press conference on Tennessee’s coronavirus response in Nashville on March 16, 2020. (Erik Schelzig, Tennessee Journal)
Gov. Bill Lee’s office says $500 million in cuts will be needed for the current budget year and $1 billion for the fiscal year beginning July 1. Finance Commissioner Butch Eley said the administration plans to balance the budget using reserves over three years.
The state plans to create a voluntary buyout program for state employees, reduce spending on building projects and maintenance, and dial back spending in all state agencies. But officials have abandoned previous considerations of suspending this year’s back-to-school sales tax holiday and delaying the end of the Hall tax on income from stocks.
“We will balance our budget each year while providing important services to our citizens,” Eley said in a release. “We’re adjusting to the immediate impact of the pandemic on state revenues of up to $1.5 billion through the end of the next fiscal year, planning for the worst and hoping for the best.
Here’s a release from the governor’s office.
NASHVILLE, Tenn. – Gov. Bill Lee’s administration today outlined new spending plans for state government that reflect significant revenue reductions due to the economic impact of COVID-19.
Department of Finance and Administration Commissioner Butch Eley presented state lawmakers with the revised budget plans for the current fiscal year, as well as FY 2020-21, which begins July 1, 2020, and a framework for the following fiscal year, 2021-22.
“We will balance our budget each year while providing important services to our citizens,” Eley said. “We’re adjusting to the immediate impact of the pandemic on state revenues of up to $1.5 billion through the end of the next fiscal year, planning for the worst and hoping for the best.
“Tennessee has a history of being one of the best managed states in the nation, and we intend to work with the Legislature to continue that tradition, maintaining low taxes and preserving reserves while achieving efficiencies in operations and continuing to serve our citizens.”
In March, the administration and the General Assembly agreed on $397 million in recurring reductions at the onset of COVID-19, and the administration is proposing an additional $284 million in reductions for FY 20-21, bringing the total to $681 million in reductions. Hiring and expenditure freezes have also been in place since March. The state will close the current fiscal year on June 30 with unbudgeted non-tax revenues, agency savings and reserves.
