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NASHVILLE — Tennessee Gov. Bill Lee's administration has implemented a general hiring freeze on vacant positions except for "mission critical areas" as the state braces for the economic fallout of the coronavirus on state revenues.

The freeze also applies to contracts as well as "equipment purchases not necessary for the state's COVID-19 response and working from home initiative."

In his memo dated Thursday, new Finance Commissioner Butch Eley warns the "economic effects of the worldwide public health crisis brought on by COVID-19 will ripple through the state's economy and have a negative impact on the state budget."

Eley thanks intended memo¬†recipients — agency heads, budget officers and human resources officers — for their "efforts during these difficult times."

Before recessing in late March as the breadth of the viral outbreak became clear, Lee and fellow Republicans in the General Assembly slashed the governor's originally proposed fiscal year 2021 budget by hundreds of millions of dollars, leaving it at $39.8 billion.

Already, Lee and administration officials have been warning lawmakers that more cuts are coming as sales taxes (Tennessee's main source of revenue), corporate taxes and other levies are walloped by the virus and stay-at-home orders issued in an effort to curb the pandemic's spread. As of Monday, Lee has ended his previous executive order banning dine-in restaurant service and plans to lift a similar order on retail stores Wednesday.

Eley recently replaced Stuart McWhorter as finance commissioner after Lee named McWhorter head of his new Unified Command group to combat the two-fold health and economic crisis.

In his memo, Eley says "prudent" financial management "requires that each agency begin to restrain discretionary spending for the balance of fiscal year 2019-2020 and until further notice."

The hiring freeze is imposed on vacant positions but "exceptions will be allowed in mission critical areas necessary for the public welfare and for the welfare of persons under care or custody of the state," the memo says.

Filling those posts will require "approval of a separate freeze exception justification letter by the Commissioner of Human Resources before filling any vacant position, unless blanket freeze approval is granted by the Commissioner of Human Resources for the two categories specified above," Eley says.

The freeze also applies to temporary services and contractual services workers with similar exceptions as outlined for the hiring freeze.

Agencies are also being required to "manage the expenditure of all other program funds as conservatively as possible. Agency heads should restrain any discretionary spending which will not disrupt mandatory program service delivery, and which will not circumvent the legislative intent in the appropriation of funds."

With Lee working to reopen parts of Tennessee's economy, the state on Sunday saw its largest one-day jump in new reported COVID-19 cases with 478 new cases confirmed, representing a 5.2% jump. Tennessee had 9,677 confirmed coronavirus cases. The increase in cases comes at a time when the state has significantly boosted its testing effort.

Contact Andy Sher at asher@timesfreepress.com. Follow on Twitter @AndySher1.

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