This Information comes from the office of 28th District State Sen. Joey Hensley R-Hohenwald, whose district includes Giles and five other counties.
The General Assembly will convene Jan. 11 and one primary issue of the 112th General Assembly will be dealing with the state budget.
The budget is always a top issue and the most important constitutional duty of the Tennessee General Assembly.
This year it will be especially important due to strong tax collections, excess revenues and the flow of federal stimulus funds into Tennessee. The state is in the best financial condition in recent history.
Even after approval of $884 million in appropriations to incentivize and complete the West Tennessee Megasite during the Special Session in October, Tennessee will have $1.2 billion in excess revenues from the 2020-2021 fiscal year.
Four months of the 2021-2022 fiscal year also looks very promising with the state’s general fund receiving approximately $1.112 billion in revenues over budgeted estimates.
In addition, Tennessee has received around $14.8 billion in federal COVID-19 aid, including all assistance to individuals, businesses, counties, cities and the state. This does not count the latest American Rescue Plan or Infrastructure Investment and Jobs Act funds.
The state’s Financial Accountability Group has worked diligently to strategically invest one-time federal COVID-19 stimulus funds to maximize positive effects on Tennesseans without creating risks.
In November, the state’s Funding Board upwardly adjusted the current fiscal year which ends July 1 to a projected growth rate to a range of 7.75 to 8.5 percent in general fund revenues. Funding Board members, however, estimated Tennessee’s general fund tax revenues will grow 1.75 to 2.25 percent during the 2022-2023 fiscal year. Gov. Lee will build his budget for the upcoming fiscal year utilizing these estimates.
Conservative estimates for next year reflect the strong caution expressed by the state’s top economic advisors that one-time stimulus funds and changing spending patterns have resulted in higher than expected tax revenues which could cause them to wane in the next fiscal year.
There were concerns regarding how and when shifting spending patterns might level out. Economic advisors have also expressed future uncertainty regarding the impact of inflation on the economy.
In December, the U.S. inflation rate hit 6.8 percent, the highest increase since 1982. In addition, wholesale level prices hit a record 9.6 percent in November from a year earlier.
Tennessee has a proud tradition of being a fiscally conservative state which is well managed with the lowest possible tax burden to residents.
The AAA-rated Volunteer State is among the five least indebted states in the nation per capita, ranks third for best-funded pension plans and is one of only five states without road debt.
The high ranking is also boosted by the state’s low unemployment, rising educational achievement, and robust job growth.
Expect the legislature to be very thoughtful in how state dollars are budgeted by possibly even taking a multi-year approach in spending to ensure Tennessee’s continued strong financial stability.
One way to ensure the state’s financial stability in an economic downturn is by maintaining adequate savings through Tennessee’s Rainy Day Fund. The fund is at a historic level of $1.55 billion.
Expect the General Assembly to consider adding to the fund in the 2022-2023 fiscal year to assure adequate reserves are maintained given the future uncertainty of the economy.
The budget is usually presented to the General Assembly around the first week of February.
Tax relief -- There will also be discussion in the 2022 legislative session regarding returning some excess revenues to taxpayers in tax relief.
During the 2019 legislative session, the General Assembly cut the professional privilege tax for 15 of 22 professions covered.
Expect budget discussions to include further tax relief efforts for the remaining professions which are attorneys, security agents, broker-dealers, investment advisors, lobbyists, osteopathic physicians and physicians.
The legislature could also revisit fees paid by farmers and small businesses organized as Limited Liability Companies (LLCs). Fees at $3,000 maximum are substantially greater than the $100 paid by businesses to file as a C Corporation.
Other forms of tax relief will also be discussed as legislators look for ways to put more hard-earned money back in the pockets of Tennesseans in a way that affects the most people.
Tennesseans enjoy the lowest state and local tax burden per capita in the nation.
Hensley may be contacted at 425 Rep. John Lewis Way N., Suite 742, Nashville Tenn., 37243 or by calling 615-741-3100, toll free 1-800-449-8366 ext. 13100, or fax 615-253-0231.
His district address is 855 Summertown Highway, Hohenwald Tenn., N 38462; or phone 931-796-2018. His cell phone is 931-212-8823 or E-mail: firstname.lastname@example.org