The Tennessee Senate passed a new $39.4 billion budget Thursday that includes more than $300 million in cuts due to the ongoing coronavirus pandemic. The House is expected to vote on it next week.
Senate Majority Leader Jack Johnson said the numbers reflected in the spending plan are a result of an estimated $1 billion revenue shortfall for next fiscal year.
“If ever there was a time of uncertainty, this was it,” Johnson said. “We don’t know what the economy is going to do.”
Johnson said the pandemic has forced the state to use non-recurring money on recurring expenses. But overall, the budget has about $365 million worth in cuts. This means teachers and other state employees will not see a previously proposed salary increase.
But others, such as Gov. Bill Lee, will see a 1.8% cost-of-living increase. He has said he would donate that additional money to charity.
More cuts are expected throughout the next three years.
The spending plan seeks to avoid drawing from the state’s $4 billion reserves. However, it gives the Lee administration the chance to look into the budgets of each agency and department to figure out what to cut.
But, before making any final decision, the Lee administration would have to report back to the chairs of the House and Senate finance committees.
“I want to be very clear: There is no real way we can put into place that can stop the administration from moving forward with what they intend to do,” Johnson said. “However, Gov. Lee has assured me … they want to collaborate with the General Assembly.”
The revised budget also includes $50 million for an employee buyout program and additional money for local governments to use to replace revenue.
Senate Democrats tried to pass multiple amendments, including funding for postpartum TennCare coverage and cost-of-living raises for every state employee. But the amendments were all defeated by the Republican supermajority.
Sen. Jeff Yarbro, D-Nashville, criticized the proposed spending plan.
“I think the balance for equity has probably not been struck quite as fairly as it should in this hard time,” Yarbro said. “This is a time when people are facing economic calamity in their lives, and this is a time when our budget response should not only be responsible … but it should also protect people in the state who are facing tough times.”