FILE - Tennessee state Rep. William Lamberth

Tennessee state Rep. William Lamberth, R-Portland

(The Center Square) – A Tennessee House committee advanced budget bills that significantly cut more funding than the Senate’s budget legislation amid prospective revenue losses caused by the response to the COVID-19 pandemic.

The House Finance, Ways and Means Committee advanced three budget-related bills late Monday night.

“These are real cuts,” House Majority Leader William Lamberth, R-Portland, told committee members. He said the cuts are necessary to ensure the state balances its budget each year, rather than trying to simply balance the budget over a three-year period.

The House’s version of the budget also created a one-time sales tax holiday for some industries harmed by COVID-19, which the state predicted will cost it about $100 million in revenue. Half of that revenue would come out of revenue that would be collected from vehicle sales.

Lamberth said this sales tax holiday is a good way to get money back into the hands of taxpayers and to boost economic activity, which will instill more confidence in some of the businesses that have been hurt by the economic restrictions imposed to curtail the spread of COVID-19.

The proposed holiday caused some concern from some committee members, particularly for vehicle sales. Rep. Charlie Baum, R-Murfreesboro, cautioned the holiday could postpone car sales and concentrate a lot of them within a couple of days. He also questioned whether the state should be forgoing certain revenue sources when it is bonding certain payments to free up cash.

The House’s budget bill includes more than $200 million in bonds for projects the state can’t afford to pay for up front because of revenue losses amid COVID-19 – about $50 million more than Gov. Bill Lee’s proposal. With the extraordinarily low interest rates, Lamberth said now is the best time to borrow money if the state will have to do so.

Lee’s version, the House’s version and the Senate’s version all include cuts in education initiatives from what the state was considering earlier in the year, including a pay increase for teachers. The initial budget included a 4 percent increase, which was cut to a 2 percent increase, and then eliminated altogether in the House and the Senate bills. The budgets in both chambers remove pay raises for other government employees, as well. 

Both chambers also have proposed halting the pay raise for members of the General Assembly and removing the funding allocation from the Education Savings Account program because its implementation has been blocked by a judge.

The three budget bills that advanced – House Bill 2924, House Bill 2922 and House Bill 2930 – will be heard Tuesday morning in the Calendar and Rules Committee. The Senate’s versions of these three bills have passed that chamber and been sent to the House for consideration.

Staff Reporter

Tyler Arnold reports on Virginia and West Virginia for The Center Square. He previously worked for the Cause of Action Institute and has been published in Business Insider, USA TODAY College, National Review Online and the Washington Free Beacon.