Gov. Lee proposes $150 million emergency budget to address COVID-19

Staff Photo by Robin Rudd/ Tennessee Gov. Bill Lee speaks to the media during a tour of Cleveland High School on Jan. 7, 2020.

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NASHVILLE - Tennessee Gov. Bill Lee on Wednesday unveiled a major rewrite of his proposed budget in response to the coronavirus crisis, slashing previously proposed spending to the tune of $891.4 million in one-time and recurring areas to fund emergency measures.

The list includes a special $150 million fund, as well as throwing an additional $350 million into the state's "Rainy Day" emergency reserve fund to brace the state for what's shaping up as a major recession, with tax revenues plummeting.

As the Republican seeks money to prepare, the governor's changes for the fiscal year 2021 budget include cancellation of a $21.9 million proposed advanced manufacturing building at Chattanooga State. It's one of four higher education building projects totaling $159 million falling to the budgetary axe.

The governor also eliminated his proposed $250 million mental health trust fund for K-12 students as he diverts funds to other areas while building the emergency reserve to $1.45 billion.

While public school teachers, state employees and higher education workers will still see some pay raises, Lee slashed percentage amounts.

"These are uncharted waters," Senate Finance Committee Chairman Bo Watson, R-Hixson, said, adding the situation Wednesday was "somber" after state Finance Commissioner Stuart McWhorter formally presented proposed changes.

Earlier, McWhorter told Watson's panel that "we are now likely embarking on a recession caused by this rare health pandemic. Clearly, we are in a time of recovery, a time of preparedness and a time of many unknowns."

A 4% increase for teachers has been reduced to 2%, cutting almost in half to $58 million the $117 million teacher pay raise he proposed.

Also eliminated is a proposed $40 million professional privilege tax cut, the governor's $11 million literacy program and $10 million each for legislative initiatives, as well as the governor's rural opportunity fund.

Lee is adding 10 state troopers and 25 Tennessee Bureau of Investigation field agents under the proposed spending plan.

The Tennessee Department of Health reported Wednesday afternoon there are now 98 people confirmed as having the COVID-19 virus. Hamilton County, meanwhile, announced there are three confirmed cases locally, only one of which is on the state's list. That appears to push the number to at least 100 statewide.

Lee's budget changes also recognize plans to double an already announced local government program from $100 million to $200 million as the state deals with the potentially deadly coronavirus. Many more cases are expected whenever testing becomes more widely available in Tennessee.

Other Lee budget provisions include:

- Fully funding the state's Basic Education Funding Formula

- Fully funding Higher Education Outcomes-Based Funding Formula

- Fully funding pension contribution

- Fully funding employee benefit liability contributions

- Fully funding the inflationary growth in TennCare

- Fully funding the growth in the Department of Children Services for children in state services.

It adds $30 million for the Tennessee Emergency Management Agency's Disaster Relief Fund and more dollars to a fund for emergency repairs for state buildings.

Other provisions are aimed at strengthening the safety net for mental health and health.

Contact Andy Sher at or 615-255-0550. Follow on Twitter @AndySher1.