NASHVILLE — As they wrapped up their annual session last week, Tennessee lawmakers approved a $56.2 billion annual spending plan that plows a record $3.3 billion of one-time money into state and local road projects along with other high-dollar investments, including nearly $1 billion for Tennessee Colleges of Applied Technology and $223 million to bolster security in public and private schools.
At Republican Gov. Bill Lee’s urging, lawmakers hastily approved the school security funding following the March 27 shooting at The Covenant School in Nashville that left six people dead, including three 9-year-old students. Republicans hold supermajorities in both legislative chambers.
Both the shooting and the subsequent House expulsions of two Black freshmen lawmakers who held an impromptu floor demonstration thrust the state under a national microscope.
Funding in the budget year beginning July 1 includes $140 million to place armed school resource officers in every public schools — $75,000 per officer. There’s also $7 million going into a new grant program offering state funding for school resource officers in private schools. Another $8 million will go to expand behavioral health offerings.
Republicans also doubled a Lee recommendation for school security improvements, raising the amount to $40 million for public school building security and $14 million for private schools.
Rep. Patsy Hazlewood, R-Signal Mountain, and Sen. Bo Watson, R-Hixson, helped steer the budget process as the respective chairs of the House and Senate Finance committees.
“Tennessee is well-known for its common-sense budgeting and sound fiscal responsibility that supports great quality of life for our citizens,” Hazlewood said in a joint news release. “Good governance at the greatest efficiency has led to extraordinary economic growth and success in the Volunteer State. This budget is a solid spending plan that makes wise investments for the future of our state and gives citizens back more control over their hard-earned dollars.”
Watson said the budget reaffirms Tennessee’s commitment to strong conservative fiscal management and low taxes.
“It makes one of the largest tax cuts in Tennessee history for businesses and families, while setting aside $250 million for our rainy-day fund,” Watson said. “We are providing grants to rural and distressed hospitals taking care of vulnerable populations throughout the state.”
Watson said in an interview during a Friday Senate floor recess that lawmakers added a number of items to the spending plan.
“I think the legislature’s imprint on this budget has been greater than it’s been in the past,” Watson said. “I think that’s a good thing to engage in that. I think we invested in communities and we invested in people.”
Transportation overhaul
Lee’s Transportation Modernization Act expands taxpayer-funded interstates in rural and many suburban areas from two to three lanes to alleviate congestion while also introducing something new: publicly owned but privately funded and operated toll or “choice” lanes in Hamilton County and other congested urban areas in the state.
The governor branded the urban toll lanes as “choice” lanes, arguing drivers can opt to use them or stay in existing freeway lanes. Those using the toll lanes would pay rates determined by the amount of traffic. A number of states, including Georgia, have toll lanes.
As approved, the act provides a $3.3 billion one-time subsidy from the general fund for state and local transportation needs. Each of the Tennessee Department of Transportation’s four regions will receive $750 million. On top of that, the state’s 95 counties and hundreds of towns and cities will split another $300 million through grants for road projects.
The state has an estimated $26 billion backlog of transportation projects.
Education spending
Lawmakers approved $750 million to fully fund the base allotment for the Tennessee Investment in Student Achievement Act, the state’s new K-12 funding formula. On top of that, Lee and lawmakers put in another $350 million for the formula, about a $1.1 billion total increase, which would bring the state and local funding total to $9 billion for the 2023-24 school year.
“We funded TISA, which is going to be a lot to Hamilton County,” Watson said during the interview. “It’s going to be north of $50 million for them.”
He recalled unsuccessful efforts by himself and then-Rep. Gerald McCormick, another Chattanooga lawmaker, to revamp the state’s former plan, saying it was unfair to Hamilton County. The new plan has changed that, he said
— The budget provides $125 million to boost pay for public school teachers.
Democrats argued the state should have done more for teachers and education in general in light of massive revenue surpluses. GOP lawmakers in recent years have squirreled away much of the cash bonanza to spend later as one-time appropriations.
“If we chose to just keep back $1.5 billion of the recurring surplus and put the other billion into education – that would still be one of the largest recurring surpluses held over in the state’s history – but what we would achieve in the meantime is we would get out of the bottom 10 (states) in education funding,” Sen. Jeff Yarbro, D-Nashville, argued during the budget debate.
Republicans ignored him, approving the budget bill with most Democrats going along.
— Lawmakers also approved a bill to raise the minimum Tennessee teacher salary to $50,000 by fiscal year 2026-2027. The legislation generated heartburn for Democrats and some GOP members as the anti-union Lee coupled the increase with ending local education voluntary automatic payroll deductions for membership in professional educator groups, such as the Tennessee Education Association, which lobbies the legislature on their behalf.
Lee’s bill leaves untouched automatic dues deductions for other employee organizations, including state employees and state troopers.
— Lawmakers also gave final approval to a bill sponsored by Sen. Todd Gardenhire, R-Chattanooga, that brings Hamilton County into the Lee-created private school voucher program. It allows parents with low-to-moderate incomes to send their children to private schools willing to accept the vouchers, which are worth about $8,100 annually per student.
North Chickamauga Creek State Park
The budget provides $288 million for state parks and natural areas.
That includes $776,300 Lee provided for the newly designated North Chickamauga Creek State Park, which was a state natural area. The new funding provides for a park manager, three park rangers and five other staffers for the 7,093-acre area near Soddy-Daisy.
Law enforcement, first responders
In his original budget unveiled in February, prior to The Covenant School shooting, Lee included $30 million for 122 Homeland Security agents to serve students at both public and private schools in all 95 counties. It was approved in the overall budget bill.
The new budget also provides for 142 new trooper positions at a cost of $28.72 million.
Another provision provides 25 new forensic services positions at the Tennessee Bureau of Investigation at a cost of $4.52 million in the wake of a controversy over lengthy delays in getting lab results.
A last-minute bill passed to provide firefighters access to workers’ compensation claims for post-traumatic stress disorder incurred as a result of their service. It was named in honor of the late Cleveland fire Capt. James “Dustin” Samples, who had PTSD and lobbied unsuccessfully for the move prior to his committing suicide.
Temporary, permanent tax reductions
The budget includes a number of tax-related measures. Among them:
— $288.3M for a one-time, three-month sales tax holiday on food from Aug. 1 to Oct. 31, 2023.
— $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
— $37.8 million for small business excise tax relief: establishes a standard deduction from excise tax for up to $50,000 of reported net income. It’s expected to impact some 23,000 businesses.
— $20.3 million for small business franchise tax relief that exempts up to $500,000 of property from the franchise tax, giving small- and medium-sized businesses that own property in Tennessee up to $1,250 in tax savings on their annual franchise tax liability.
Lawmakers to return to address school security
In the waning hours of the regular legislative session and aftermath of The Covenant School shooting, Lee unveiled an effort to address state gun laws to pass a “temporary mental health order of protection” bill for removing firearms from people who potentially could harm themselves or others.
He urged lawmakers to act on it.
During session, a number of GOP legislative leaders, especially in the House, were cool to the idea, which is fiercely opposed by pro-Second Amendment groups. Yarbro’s effort to bring Lee’s proposal directly to the Senate floor was defeated.
The governor was a personal friend of one of Covenant’s adult victims.
Some two hours after lawmakers adjourned, Lee announced he intends to call them back in a special session to address his proposal.
Contact Andy Sher at asher@timesfreepress.com or 615-285-9480.
