$39.45 billion budget addresses shortfalls, Covid-19
I am sure I am not alone in wondering how the world we thought we knew has changed so much so quickly in the last few months. I do not presume to have all the answers, but I can share with you what I do know.
Our great nation and our state have been confronted with some extraordinary challenges. Businesses and communities have shouldered unexpected financial burdens while our neighbors have suffered devastating job loss.
Do not despair. While it’s true we have some difficult days ahead, this economic crisis will pass quickly. When it’s over, I believe we will reach new, greater levels of prosperity and opportunity in the Volunteer State.
How can I be so sure? Conservative leaders in the General Assembly have made extremely careful spending decisions over the past decade. As a result, our state’s finances have been the healthiest in history. Just a few short months ago, Tennessee was named the most financially stable state in the nation by U.S. News and World Report. We have the lowest debt per capita of any state in the nation and zero road debt. Tennessee holds the highest bond rating issued by all three of the nation’s credit rating agencies. This rating reflects extreme confidence in Tennessee’s preparedness in meeting financial commitments in tough economic times.
Tennessee has been a model of good governance and financial policy for the rest of the nation.
My Republican colleagues and I continued that tradition by passing a fiscally conservative $39.45 billion budget for 2020-21 that addresses unexpected revenue shortfalls caused by COVID-19.
The 2020-21 budget does not raise taxes on Tennesseans. Rather, we reduced the size of government through commonsense cuts totaling $1.5 billion over a two-year period to address historic revenue losses. This budget finalized the elimination of the Hall Income Tax.
We’re investing $350 million into Tennessee’s Rainy Day Fund, bringing the total to a record-high $1.45 billion. The budget also fully funds the Basic Education Program (BEP), covering both growth and inflation with a $50.3 million investment. It includes $10.6 million for health insurance and retirement for teachers and principals. The FY 20-21 budget supports higher education with a $50 million investment in new facilities.
We invested $150 million to establish a new fund to cover public health and safety issues related to the COVID-19 pandemic. This includes $10 million in Small and Rural Hospital Readiness Grants to support hospitals facing financial strain.
Much focus is on boosting consumer and business confidence through the creation of a $25 million sales tax holiday. Next month, Tennesseans will enjoy a sales tax holiday beginning Friday, July 31-Sunday Aug. 2. This year it will include goods normally included, like clothing and school supplies, but with double caps for any single item. That means the holiday applies to items under $200 for most eligible goods and computers under $3,000. Electronics not normally eligible – like televisions – will be included for the first time this year.
Also new this year is a tax free holiday for restaurants, which will begin Friday, Aug 7 and end Sunday, Aug. 9.
Providing this relief will pay dividends in the long-run by encouraging growth and business. This is an active way we can encourage people to support their local family restaurants and shops, but also a way we can return tax dollars to the people it really belongs to – Tennessee taxpayers.
Other key allocations include a $210 million grant program for all Tennessee cities and counties. These funds have no restrictions and will be used to address unique needs best determined by local and county leaders. Approximately $15 million will be used to support economic and community development through broadband accessibility grants.
The 2020-21 budget invests $19 million to strengthen the state’s health care safety network and $7.5 million in new funding will create a children’s behavioral safety network.
Tennessee’s new state budget supports citizens across all three grand divisions as we continue to recover from these extraordinary circumstances.
Finally, I am humbled by the confidence and trust you have placed in me to represent you in the 45th House District. I thank you for the privilege.
Please continue to keep your neighbors and families in your prayers. When this crisis is over, I have no doubt we will emerge stronger than ever.
Johnny Garrett is an attorney and lives in Goodlettsville. He represents the 45th House District which includes Hendersonville, Goodlettsville, Millersville and White House. Garrett serves as Majority Whip in the Tennessee House of Representatives.