NASHVILLE, Tenn. — The State Legislature passed a state budget and several key bills including unemployment compensation reform, education reform, school safety and prescription drug abuse before adjourning the 2013 legislative session to become a part of Tennessee history. The action came after three and a half months of legislative deliberations and is one of the earliest adjournments in 23 years.
The $32.8 billion budget for the 2013-2014 fiscal year, sponsored by Senate Majority Leader Mark Norris (R-Collierville), is fully balanced and incorporates approximately $43 million in tax cuts for Tennesseans.
“In direct contrast to Washington, Tennessee’s budget is balanced,” said Leader Norris. “The state is ranked 48th lowest in the nation in per capita debt and 47th in per capita tax burden, all while balancing our state budget and lowering tax burdens for our citizens.”
“In submitting this budget, the Governor recognizes a slowly recovering national economy,” added Norris. “Like last year, it is an optimistic budget. We remain on guard but we are on the move in Tennessee.”
Senate Bill 502 allocates $18.7 million to take the second step in a four-year process to phase out the state’s inheritance tax, also called the death tax. It also provides $1.5 million to allow more senior citizens to qualify for Hall income tax relief and $22.2 million to reduce the state sales tax on grocery food from 5.25% to 5.0%. Norris also won approval of Senate Bill 198 and Senate Bill 199 on Monday to make the necessary changes in state law to implement the tax reductions.
On K-12 education, the budget fully funds the Basic Education Program, invests $51 million to assist local governments in paying for technology transition upgrades in schools across the state and makes available $34 million to address ongoing capital needs that can be used for increased security measures to protect students. It appropriates more than $35 million for K-12 teacher salary increases and provides $47 million in funding to help improve Tennessee’s lowest performing public schools.
The budget prioritizes higher education by providing $307.3 million to fund capital outlay projects in higher education, $35 million to fund the state’s new outcome-based formula adopted under the state’s Complete College Act, $5 million to provide assistance to 2,675 needy students and $16.5 million for equipment for Tennessee’s TechnicalCenters and Community Colleges.
Other highlights of the budget include:
- $104 million cost increase for a 1.5% pay raise salary market adjustment for state employees;
- $46.3 million cost increase for state employee group health insurance;
- continues the state 401 (K) match at $50 per month;
- reduces state employee positions by 299 or .08%;
- $350 million cost increase for TennCare inflation and related expenses;
- $8.6 million cost increase for Cover Tennessee programs;
- $7.5 million cost increase for Children’s Services;
- $100 million to the Rainy Day Fund, bringing it to $456 million by June 30, 2014;
- $79.6 million cost increase for local jail payments, a new prison in BledsoeCounty, medical contracts and other inflationary growth;
- $3.9 million cost increase for mental health;
- $4.3 million in capital outlay for the MontgomeryCounty veterans’ home;
- $134 million in capital outlay for state building improvements through the Facilities Revolving Fund;
- $8 million in one-time funds for tourism marketing;
- $1 million in one-time funds for the College 529 Savings Plan;
- $37.9 million for health and wellness initiatives;
- $110 million for economic development; and
- provides tax relief for low income seniors, veterans and the disabled by fully funding the growth of the property tax freeze program enacted in 2007
The budget assumes a general fund revenue growth of 3.89% during the 2013-14 fiscal year.