Legislature passes no tax budget

State Senators worked late hours and into the weekend, passing a state budget and approving several important bills as the 2010 legislative session draws closer to adjournment. The $28.6 billion no tax budget, which funds state government for the 2010-2011 fiscal year beginning July 1, prioritizes education, jobs, public health and safety, and makes provisions for recovering from one of the worst natural disasters in Tennessee history, State Sen. Doug Overbey said.

According to a press release, the legislation follows the five-year plan passed last year to phase in economic recovery through these tough times without raising taxes. Over the last three years, the state budget has been reduced by over $1.5 billion. This budget reflects a 4.4 percent decrease in total spending, he said.

The budget allocates $100 million from the state’s Rainy Day Fund for flood relief to be used by cash-strapped county and city governments for recovery and deter local tax hikes that might otherwise be proposed for that purpose. It also provides $19.95 million in flood relief for sales tax rebates on major appliances, furniture and building materials purchased by victims certified by FEMA for federal assistance. An additional $10 million was added to the state’s Agricultural Enhancement Grant funds to assist farmers who were especially hit hard by flooding, the senator said.

Overbey said the budget increases benefits, contingent upon growth in state revenue, to state employees for health care and other increased costs. The benefits are based on longevity at an additional $50 per year, capped at 25 years and $1,250. It provides a baseline longevity payment of $150 for those employees who have been employed 1 to 3 years, the senator said.

Other highlights of the budget, Senate Bill 3919, include:

• Maintains the Office of Children’s Care Coordination and perinatal outreach grants to address infant mortality and early childhood health;

• Funds Development District grants which promotes the renewal and revitalization of both rural and urban communities;

• Increases the Agricultural Enhancement grants to support farm development and Tennessee’s agricultural community;

• Provides $120 million, contingent on receiving FMAP funds, for community colleges to give them the space they need after passage of the Complete College Act of 2010 earlier this session;

• Maintains funding for career ladder teacher pay and fully funds BEP capital outlay;

• Restores real estate transfer tax funds to the purposes for which originally dedicated including the Agricultural Resources Conservation Fund, Local Parks Acquisition Fund, State Lands Acquisition Fund, and Wetlands Acquisition Fund;

• Provides a combined Rainy Day Fund balance and TennCare Reserves of $429 million;

• Anticipates balancing recurring versus non-recurring funds next year, as originally planned.

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