For several weeks, my colleagues and I have been examining ways to address historic revenue shortfalls caused by the COVID-19 pandemic, while at the same time, balancing our state budget and continuing to effectively address the needs of Tennesseans.
As we concluded the 2020 legislative session on June 19, we approved a $39.45 billion budget that accomplishes all of these goals and much more. The Fiscal Year (FY) 2020-2021 budget reduces the size of government through common sense reductions and cuts totaling $1.5 billion over a two-year period to address the unexpected revenue shortfalls. The budget also finalizes the elimination of the Hall Income Tax, and it does not raise taxes on our citizens.
This new state spending plan invests $350 million into Tennessee’s savings account (Rainy Day Fund), bringing the total to $1.45 billion. We are also fully funding the Basic Education Program (BEP), covering both growth and inflation with a $50.3 million investment. Approximately $10.6 million for health insurance and retirement for teachers and principals is also included, and a $50 million investment in new facilities will support higher education in Tennessee.
The budget focuses on boosting consumer and business confidence through the creation of a $25 million sales tax holiday, which will take place over two weekends in late July and early August 2020. The first of these holidays will include clothing, school supplies, computers and other electronics. The second holiday will support sectors of our economy that were adversely impacted by COVID-19 closures, such as the restaurant industry.
Other key allocations include a $210 million grant program for all Tennessee cities and counties. These funds have no restrictions and can be used to address unique needs as best determined by local and county leaders. Approximately $15 million will also support economic and community development through broadband accessibility grants.
We have strengthened Tennessee’s health care safety networking through a $19 million investment, and we have created a new children’s behavioral safety network with $7.5 million in new funding. The Fiscal Year 2020-2021 budget adds 80 new positions within our Department of Motor Vehicles Division to better serve our citizens, and it allocates $174,000 to restore funding to the state’s development district for regional and economic planning purposes.
Finally, the FY 20-21 budget includes $25,000 for the Tennessee Historical Society to assist with the celebration of the 100th anniversary of Women’s Suffrage in Tennessee later this year. These funds will support our Historical Society as we commemorate our state’s pivotal role in granting women everywhere the right to vote.
Under conservative leadership in Tennessee, we have kept government small, and we have made fiscally responsible decisions that have resulted in a AAA bond rating and our state being recognized as one of the lowest-debt states in the entire nation. This new budget builds upon our recent achievements; it also ensures Tennessee remains the best place in the entire nation to live, work, raise a family and retire.
William Lamberth is the House Majority Leader for the 111th Tennessee General Assembly. He is also a member of the House Finance, House Government Operations, and House Calendar & Rules Committees, as well as the House Criminal Justice Subcommittee. Lamberth lives in Portland and represents Tennessee House District 44, which includes part of Sumner County.