The Tennessee General Assembly reconvened for the 113th legislative session on Tuesday, January 9, 2024. The hill has been active as bills are filed and the general business of legislative session gets underway. So far, the most significant update we’ve heard pertains to Tennessee’s financial outlook, as detailed by the Department of Finance and Administration to the Senate.
Here are a few key notes from the Jan. 9 Finance & Administration presentation to the Senate regarding the 2024 revenue outlook.
Strong Economic Foundation
According to F&A’s presentation, Tennessee’s economic foundation remains strong, a positive sign as we navigate the year ahead.
Expecting Slower Growth in Tax Revenue
A key challenge the state faces is the anticipated slowdown in tax revenue growth for 2024. This is influenced by:
- Changes in consumer spending habits.
- Higher interest rates impacting loans.
- Rising housing costs.
- Slower growth in corporate profits.
- A decrease in federal stimulus funds.
Tax Revenue Forecasts
The tax revenue forecasts for the next two years suggest a trend of modest growth. These projections are cautious, reflecting the current economic landscape.
The good news is, according to the presentation from F&A, Tennessee is well-equipped to handle these economic shifts. The department communicated that our state’s approach to spending, maintaining strong reserves, and reducing debt positions Tennessee to manage slower tax revenue growth effectively.
Implications for State Employees
For us, as state employees, it’s important to realize that the budget might not include the same level of raises we’ve seen in recent years. However, rest assured, TSEA is fully committed to advocating for your interests. We will focus on the key areas of pay-for-performance, insurance, and TCRS benefits.
In addition, as you may remember, last year’s budget included non-recurring funding to increase the 401(k) dollar-for-dollar match up to $100 for one year starting July 1, 2023. Part of our legislative package this year will include bringing back the bill to make the $100 match to your 401(k) permanent.
We’ll have more information following Governor Lee’s State of the State address in early February and in his proposed budget for 2024, which will be released the following day.
Stay tuned for more updates as the legislative session progresses. Thank you for being a member of TSEA and for all you do daily serving Tennessee.