Editor’s note: Sen. Paul Rose is one of several legislators who regularly send updates to The Bartlett Express. Here’s what he had to say today, June 5.
NASHVILLE, Tenn. — This week on Capitol Hill, I returned to the Capitol amid a wide range of devastating effects caused by the novel coronavirus, COVID-19. As your Legislature, we are working hard to wind up the 2020 legislative session, which recessed March 19 after passing a revised balanced budget. On Thursday, Finance and Administration Commissioner Butch Eley outlined Governor Lee’s new spending plan for state government, reflecting significant revenue reductions due to the economic impact of the virus.
Eley said, “Tennessee has a history of being one of the best managed states in the nation, and we intend to work with the Legislature to continue that tradition, maintaining low taxes and preserving reserves while achieving efficiencies in operations and continuing to serve our citizens.”
Since the occurrence of the pandemic, state revenues have suffered huge losses. In April state revenues fell by 41.88 percent. Until COVID-19, revenues had exceeded budgeted estimates every month, with January’s growth rate reaching almost 11 percent.
These factors are among the reasons that four leading economists have projected revenue shortfalls for Tennessee ranging from $231 million to $700 million for the current fiscal year that will end June 30. Predicted losses for the upcoming 2020-2021 fiscal year were even grimmer, ranging between $582 million to $1.5 billion.
To combat the revenue downfalls, Governor Lee has asked the Legislature to prepare a three-year approach in cutting the budget to avoid harsh cuts that could cause interruptions in current state services. In March, we agreed on $397 million in recurring reductions at the onset of COVID-19. Since returning to the Capitol, Governor Lee is now proposing an additional $284 million in cuts for FY 20-21, bringing the total to $681 million in reductions.
“We appreciate the preparedness that this legislature has put the state in and the vision that it has to be able to put us in this position to weather the storm in this crisis that we’re in today,” Eley said.
In addition to the budget, the legislature has been working on a Tennessee Business Relief Program to assist small businesses impacted by the COVID-19 crisis. The Tennessee Business Relief Program will direct approximately $200 million in federal Coronavirus Relief Funds through the Tennessee Department of Revenue directly to small businesses that qualify.
Roughly 28,000 Tennessee businesses are expected to qualify, with more than 73 percent of those businesses earning annual gross sales of $500,000 or less. The Tennessee Business Relief Program amounts awarded will be based on the annual gross sales of the business. The types of small businesses and other details about the program will be posted on the Department of Revenue’s website in the coming days.
“While the COVID-19 crisis started as a public health crisis, the economic crisis it triggered is in some ways even more devastating. The burden the virus has placed on small businesses has been substantial,” said Lt. Gov. McNally (R-Oak Ridge). “Jobs have been lost. Savings accounts have been drained. Credit has been stretched. Small businesses need this relief more than anyone. … I am hopeful this program will soon be expanded to include nonprofits, trade groups and chambers of commerce. These organizations are critical to our economic revival, and I look forward to seeing them included in the next phase. Our recovery from this economic disruption will be a slow process, but without small business, it doesn’t happen at all. I am grateful for this opportunity to put our most at-risk businesses on a path to stability and prosperity.”