NASHVILLE, Tenn. (WKRN) — It was serious crystal ball time on Tennessee’s Capitol Hill Wednesday with the state budget at stake, but the Tennessee revenue estimates drew little consensus on what’s ahead for lawmakers to consider.
Governor Bill Lee and other top state officials heard from top economists trying outlining their projections that will touch a lot of Tennesseans, but the revenue estimates drew little consensus on what’s ahead for lawmakers to consider.
The outlook was an online meeting of the state’s funding board which estimates the money available for the state budget.
The estimates varied on such things like projected sales tax revenue where the state’s fiscal review committee estimated a 2.79% growth for fiscal year 2020-21 while an East Tennessee State University economics professor predicted a 4.8% drop for 2020-21 compared to the previous fiscal year.
For two hours, the governor digested an array of slides, charts and graphs painting Tennessee’s future economic picture.
The governor begin the meeting by saying the downturn will not go away quickly.
“It will go into the coming years,” said Governor Lee. “And we need to address this with a look to the future recognizing that there will be no quick response or quick fix here and it will take some time to do so.”
The funding board projections guide lawmakers to see how much money in tax collections will be available in the state budget for things like K-12 education, healthcare for low income Tennesseans and public safety, but some cutbacks are underway reminded the governor.
“Hiring freezes, equipment purchase freezes, and asking agencies to look for reductions in recurring revenue,” added the governor.
While words like uncertainty accented the forecasts that came from state university economists and top administration finance officials, one long time budget adviser saw a picture better than expected with Tennesseans buying groceries, building materials and general merchandise to keep the state sales tax slide at a 14-percent loss.
“Any other time in history, if you would have told me there’s a 14-percent decline in sales tax, I would think absolutely we were in the worst case scenario, but I was expecting worse,” said Dr. Bill Fox who heads business and economic research at the University of Tennessee.
Despite that ray of good news, the governor and lawmakers know big cuts are coming for the state budget.
Several top lawmakers also expect to consider taking hundreds of millions from the state’s rainy day fund to make up for lost tax revenue.
The state’s funding board is expected to release a consensus report on the state’s revenue estimates within a week or two.
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