When state lawmakers return to Nashville in June, they’ll resume work on passing a budget for the upcoming fiscal year. The process becomes more complicated due to the loss of about 700 million dollars in sales tax revenue and collections due to the COVID-19 shutdown. State Senator, Richard Briggs, calls it a good news, bad news, situation.
“The good news is we went into this financial crisis in very good shape. We had about one point two billion dollars in our rainy day fund. The bad news is, with “safer at home” and the winding down of the economy, that happened very very rapidly, our tax and revenue receipts are way way down. We were 700 million dollars off in march and it’s probably going to be a lot worse in April.”
Even with a billion dollar surplus in the rainy day fund, Briggs says state economists are cautioning lawmakers against dipping into it. “Because we don’t want to exhaust it then have problems in 2021, 2022, with not having anything to draw on if we still haven’t recovered from this recession.”
Briggs says he’s optimistic that successfully bridging the budget shortfall will not include a tax increase, or the layoff of teachers or law enforcement officers. “We’re probably not going to have to lay-off teachers, we’re not going to have to lay-off law enforcement. We’re going to be able to maintain most of our services, we’re not going to have to kick people off Tenncare. And I don’t think we’re going to have to raise any taxes, we may delay a year in cutting some planned taxes, but I don’t think we’re going to have to raise any.”
Tennessee lawmakers are set to reconvene in early June.