The Tennessee Legislature Thursday night passed a $39 billion state budget, which includes over $1 billion in cuts, including the elimination of FY20/21 raises for state employees.
Earlier in the week, the House passed their version of the budget, which added several amendments to the budget, including a one-time bonus for teachers; however, the final budget eliminated the teacher bonus and other items. Legislative raises and additional mandated raises were also cut from the final budget.
As we’ve previously reported, the governor’s raise, which is included in the final budget, is tied to our state constitution and cannot be addressed by the legislature in one session. Governor Lee has said he would donate his raise.
TSEA is disappointed about the elimination of raises in the state budget. Our dedicated state employees have continued to keep Tennessee operating through the COVID-19 pandemic, providing uninterrupted services to our citizens, with many employees working on the front lines. TSEA advocated for employees during the entire process and were in communication with your legislators up to the moment the legislature agreed on a compromise. We proposed several ideas to the Lee administration and your legislators during the budget process in both houses, including contingency raises. Still, the economic outlook is not compatible with an increase at this time.
As we reported last week, Gov. Lee’s administration anticipates a $500 million revenue shortfall in the state budget for the current fiscal year and a $1 billion shortfall in fiscal year 2021. The budget passed by the general assembly reflects those projections.
Even though the budget outlook is dire for the immediate future, there are a few items for state employees funded in the final budget:
* $50 million is allocated for an employee buyout program. DOHR is still developing this program, but the program would likely provide employees in identified positions a base payment plus an amount based on years of service and capped at an amount to be determined, two years of college tuition assistance, and extended health insurance benefits.
* Fully funding the state’s increase in health insurance premiums for state and higher education employees (the state pays 80 percent of your insurance premiums)
* Fully funding state and higher education employees’ TCRS increases for this year (Retiree COLA)
* Continuing the $50 match on the 401(K) for state and higher education employees. As a reminder, the law only requires a $40 match, so we thank the governor and state legislature for continuing the match at the current rate.
While we are disappointed by the elimination of raises, we are grateful to Department of Finance and Administration Commissioner Butch Eley, members of his F&A staff, and the General Assembly for developing a plan to navigate these unexpected economic challenges while avoiding mass layoffs and benefit reductions for state and higher education employees.
Now that the General Assembly passed a budget, each department will begin to identify areas where they can cut an additional 12 percent from their agency budgets. The budget passed Thursday night eliminates several million dollars in funding for positions, which are currently vacant. Also, all higher education institutions we have contacted are looking at various levels of cuts to departments to fill their budget deficits. TSEA will closely monitor these recommendations.
It is important to note that during the Senate budget discussions, Finance Chairman Bo Watson, Senator Jeff Yarbro, and other finance committee members had a lengthy conversation about the necessity for additional legislative oversight to provide accountability for the Lee administration as they make decisions about agency reductions. The oversight provision is contained in Amendment 3 of the Senate Budget Implementation Act.
TSEA Legislative Agenda and other bills
Due to the unexpected circumstances surrounding COVID-19 and our economy, many of our legislative agenda bills were not heard by both legislative bodies. This was the case for almost every bill in the legislative system.
SB1578/HB1615 (Passed Senate and House)
Funeral expenses for correctional employees.
Sponsors: Sen. Dickerson, Steven , Rep. Hulsey, Bud
Summary: Authorizes the department of correction to contribute $2000 in state funds toward the funeral and burial expenses of any correctional employee killed in the line of duty. Under present law, funeral and burial expenses includes, but is not limited to, the cost of preparing the body for burial or other disposition, the funeral service, any funeral merchandise, flowers, honoraria, acknowledgment cards, postage, transporting the body to the place of burial or disposition, the burial space, crypt, mausoleum or other final resting place, the opening and closing thereof and any marker. The act is named the “Debra Johnson Act.”
Senate Status: 06/19/20 – Senate concurred in House amendment 3 (018832).
House Status: 06/18/20 – House passed amended version of bill.
SB1773/HB2045 (Passed House)
Increases maximum matching retirement amount required by the state.
Sponsors: Sen. Briggs, Richard , Rep. Hicks, Gary
Summary (as amended): Increases the maximum monthly 401k matching amount from a state employer from 100 percent of the first $40 contributed to 100 percent of the first $50 contributed per employee per month, unless a higher maximum is specifically prescribed in the annual general appropriations act.
Senate Status: 03/16/20 – Re-referred to Senate Calendar Committee.
House Status: 06/03/20 – House passed amended version of bill.
SB1752/HB1801 (Passed Senate and House)
Summary: Specifies that a state correctional officer who is a member of the state retirement system is eligible for early service retirement after attaining 25 years of creditable service.
Senate status: 06/17/20 – Senate concurred in House amendment 1.
House status: 06/17/20 – House passed amended version of bill.
Nobody could have anticipated the COVID-19 pandemic impact on our economy. This unprecedented event derailed the efforts of every group on capitol hill. Up until that point, many of our legislative bills were moving through the committee system with support, the 401(k) match bill even passed the House during the final weeks of budget discussions, and we are positioned to make positive progress for state employees in the upcoming session.
We hope that this budget places our economy on a path to recover quickly. And when the economy does improve, TSEA will be here to remind your legislators and the governor of your professionalism and dedication to providing uninterrupted services for our citizens during the COVID-19 pandemic. And we will also remind them that the efforts to balance the budget included state employees foregoing their raises.
Thank you for all you do for Tennessee and for being a member of TSEA.
This is the final Legislative Update for the 111th General Assembly.