NASHVILLE -- Tennessee Gov. Bill Lee is expected to have projected new general fund revenues of between $354 million and $408 million as the Republican builds the fiscal year 2020-2021 spending plan he will submit to Tennessee lawmakers in January.

That's per edict of the State Funding Board, which met Nov. 26 to set revenue estimates for the remainder of fiscal year 2020 as well as FY 2021 budget that takes effect July 1.

The general fund accounts for most Tennessee government expenditures, funding programs ranging from the state's share of K-12 education funding to economic and community development as well as running state prisons and paying troopers to police state highways.

The overall general fund this year is $34.6 billion of which $15.86 billion is state funding with the remainder coming from the federal government and other sources. The total budget, which includes transportation, is $39.1 billion, according to state Senate and House Finance Committee staff.

The State Funding Board estimated growth rates for the next range from 2.7% to 3.1%. It represents the lowest estimates in five years from a funding board already infamous for lowballing revenue projections. That's routinely led to huge surpluses of onetime state money.

And it's spurred a spate of higher education and general government building construction or renovation projects as well as boosting Tennessee's "rainy day" emergency reserve, expected to hit $1.1 billion by June 30.

While an array of state and university economists who presented their estimates to the board earlier this month all had higher budget estimates that ranged between 3.2% and 3.7% for FY 2021, Finance Commissioner Stuart McWhorter, a Funding Board member, told The Tennessee Journal that a possible recession was part of the "narrative" when they presented economic data.

McWhorter later told the Times Free Press he was inclined to base the general fund portion of the budget on the higher end of the Funding Board's revenue growth ranges. Next year's budget will be Lee's second and the first one his administration is constructing entirely on its own.

Asked whether he and colleagues on the Funding Board had underestimated revenue just again, Comptroller Justin Wilson laughed, saying, "we are attempting to have the right number."

The current FY 2020 budget, originally set at between 2.71% and 3.21%, has already generated a $225 million surplus through Sept. 30, the first quarter of the fiscal year which had a growth rate of 8.1%.

Funding Board members revised the growth range to between 3.2% to 3.75%, which could provide growth of $430 million to $500 million over FY 2019 which ended June 30.

University of Tennessee economist Bill Fox told Funding Board members that while state revenues grew after the "Great Recession" from $10 billion in 2010 to $15.9 billion in the current budget year, the 55% increase really amounts to 7% when adjusted for inflation.

Given that has come during the longest economic expansion in U.S. history, Fox said it makes him "really nervous" about the potential for state revenues to plummet when the next economic downturn occurs.

Critics say that would be aggravated in Tennessee, a state with a heavy reliance on sales taxes that are consumer driven. Residents here pay the highest average state and local sales tax rates in the entire nation, according to mid-2019 estimates by the Tax Foundation, a Washington, D.C.-based research institution.

During the economy's economic boom, Republican governors and lawmakers have ended or are phasing out several other revenue sources including the state's inheritance tax and the Hall Income Tax, a limited tax imposed on individuals who receive interest from bonds and notes, as well as dividends from stock. And that's made the state even more dependent on sales tax revenues.

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