NASHVILLE – As Tennessee revenues crater, Gov. Bill Lee says the state faces a $1 billion shortfall in the $39.8 billion budget set to take effect July 1 and plans among other things to to eliminate nearly $150 million in proposed pay raises for educators and state government employees.
With the COVID-19-induced plummet in state tax collections, the Republican governor is also asking lawmakers to cut $38 million in previously planned “outcomes based” funding formula for public colleges and universities, designed to reward institutions for moving students toward graduation.
Lee’s originally proposed government worker pay raises had already been cut in half as a result of the emergency budget approved by the General Assembly on March 19 as the breadth of the pandemic’s impact on state finances became increasingly clear.
The elimination of those and other state plans were announced by state Finance Commissioner Butch Eley to Senate Finance Committee members Thursday morning as he described the governor’s plans to close out the current Fiscal Year 2020 budget year ending June 30. It faces a $500 million shortfall with the other $1 billion projected for Fiscal Year 2020-2021.
Eley also laid out the administration’s plan to keep the budget under control and basic government functions operating through Fiscal Years 2022 and 2023 as revenues presumably recover.