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This story was updated at 5:48 p.m. on Tuesday, June 16, 2020, with more information.

NASHVILLE — Tennessee's Republican-dominated House and Senate are headed in different directions on the state's coronavirus-ravaged state budget, with the House spending plan including a $100 million sales tax holiday.

The House plan also calls for accelerating $1.5 billion in cuts to have them occur over just two years while senators' $39.4 billion Fiscal Year 2020-2021 budget approved last week with Republican Gov. Bill Lee's support instead spreads the cuts out over a three-year period.

Another big difference: Senators approved a plan to complete the final phase-out of the Hall Income Tax on stock dividends and bond interest at an annual cost of $48 million. Their House counterparts keep the Hall Tax at its current 1% for five years. And the House plan restores two big higher education construction projects, issuing bonds instead of paying cash to build them.

One is Lee's original budget, unveiled in February before the extent of the COVID-19 pandemic's impact on commerce was known, which proposed spending $21.7 million on an Advanced Manufacturing Building at Chattanooga State, which would require $2.37 million annually to service the bonded indebtedness. The other is the $32.9 million new Science, Technology, Engineering and Mathematics building at the University of Tennessee at Knoxville.

The Senate budget included a $50 million provision to offer state employees buyouts. House Majority Leader William Lamberth, R-Portland, said earlier Tuesday the lower chamber hopes to make a number of them permanent by abolishing the positions.

"I hope they would look at this plan and see that it is a bit more aggressive," Lamberth said in an interview. "It's also a bit more conservative and would be a quicker way to truly tighten our belt and make government smaller."

The House is also proposing not one but two sales-tax holidays. One includes sales tax breaks on vehicle sales over the Labor Day weekend. Another adds another weekend of tax-free back-to-school shopping in which sales tax exemptions would double and provides for sales-tax-free dining at restaurants.

Lt. Gov. Randy McNally, the Republican Senate speaker, said the Senate worked closely with the administration on " a conservative budget proposal which emphasizes fiscal responsibility, keeps our promise to eliminate the Hall income tax and seeks to preserve our strong position with the bond ratings agencies.

"While there are disagreements between our proposals, I am confident the House and Senate will work together over the coming days to do the best for Tennessee in this time of economic disruption."

Contact Andy Sher at asher@timesfreepress.com or 615-255-0550. Follow him on Twitter @AndySher1.

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