State Budget Passes

Six weeks of partisan wrangling are over: the state General Assembly sent the governor a completed budget today.

The House of Representatives passed the budget bills in the early afternoon, with few questions and not much fanfare.

House Democratic Caucus Chair Mike Turner said some important parts of it depend on improved tax collections.

“We passed a budget that will get us through, I mean, there’s some contingencies in there…if the revenue doesn’t get better, then the employees obviously …would not get their longevity pay bonus that we were gonna add in there.”

Several expenditures will only take place if the federal government continues a generous match of state Medicaid spending, but an end to the match wouldn’t sink the budget.

One budget-related bill, which the House changed to help minority-owned companies bid for state business, goes back to the Senate tonight.

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Several high-profile items didn’t make the final budget cut. Clover Bottom Development Center is slated to be shut down in favor of less institutional care.

Representative Mike Turner:

“Clover Bottom was very close to me, being from Davidson County, I’d liked to have seen that in there. I would have liked to have seen some flood relief for small business owners. That was real important to me and a lot of our Democratic colleagues over here, but unfortunately that was a partisan issue and we couldn’t get the Republicans to go along with us on that.”

House Finance Chair Craig Fitzhugh was more diplomatic. He said “the Senate” couldn’t go along with the flood relief for small business.

The package includes sales tax relief for FEMA-certified homeowners who were flooded out. They can qualify for up to $2,500 in sales tax relief on purchases of building materials, furnishings and appliances.

The Opryland business complex would get a tax credit, granted to a business that suffered $50 million or more in flood damage.

The state Chamber of Commerce and other business groups sought similar status for small business, but that failed at the last minute.

Bills involved:

SB 3919 Kyle/HB 3928 Fitzhugh, the appropriations bill. This is the spending authorization for the fiscal year that begins July 1. The current version is this 70-page amendment originally added in the Senate, and now approved by the House:

SB 2616 Kyle/HB 2556 Fitzhugh, the new omnibus bill. This is the bill that was amended to include a new provision to further define minority-owned businesses. That amendment is much the same language as a bill that the Senate failed to pass earlier in the session, and so the amendment is expected to be controversial when it hits the Senate floor, later today.

SB 3916 Kyle/HB 3925 Fitzhugh, the bond bill, which this year de-authorizes some unused bonds to free up some money which would otherwise be held to make interest payments.

SB 3917 Kyle/HB 3926 Fitzhugh,
the “index bill,” which confirms that the amount of appropriations may exceed the amount of the state’s expected revenue by a set percentage – in the latest version, by 1.1 percent.

Contingency funding in the budget is based on the Federal Medical Assistance Percentages (FMAP) program, which gives states an extra dollar per every Medicaid dollar spent. The program has been in effect since October, 2009 but unless renewed expires September 30, 2010.

Legislators who worked on the budget say the state has about a half-billion dollars in contingency funding which would kick in if Congress re-authorizes FMAP. But none of the extra programs are crucial to the running of state government, lawmakers say.

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