The Center Square
Tennessee Gov. Bill Lee introduced a budget amendment Tuesday that included a two-week sales tax holiday on food purchases.
The two-week sales tax holiday, which includes all grocery sales, purchases at restaurants and all prepared food, is estimated to cost the state $100 million, accounting for $25 million in grocery sales and $75 million from restaurants and prepared food.
Lee introduced a $42 billion spending proposal in February. Tuesday’s budget amendment included $580 million in new spending.
Lee’s budget proposal must be deliberated in the Tennessee Senate and House, and both chambers must pass the same appropriations bill before it can be sent to Lee for approval.
“This proposal supports Tennesseans by strategically investing in long-term initiatives that will move our state forward,” Lee said. “I’m especially proud to provide tax cuts to get money back to Tennesseans to encourage them to frequent industries that have been disproportionately and negatively impacted this year.”
The 2021-22 budget also expected to cut the professional privilege tax by 25%.
“Due to Tennessee’s strong financial leadership, Tennessee has been ranked number one in fiscal stability by US World News & Report in both 2019 and 2020,” Commissioner of Finance and Administration Butch Eley said. “Our prudent and cautious approach has established Tennessee as a leader in fiscal conservatism, and we thank the General Assembly for their partnership in these efforts.”
Other priorities from Lee’s budget proposal include K-12 education, student mental health, higher education, rural and agriculture spending, safety, economic development and transportation.
The proposal includes $500 million for gun safety, a $250 million trust fund for K-12 families facing mental health issues related to the COVID-19 pandemic, $18 million to improve the statewide disaster communications system and $17 million to replace radios for state troopers, along with a proposal to add agents for the University of Tennessee extension program.
“We’re 46th in public school student funding. Gov. Bill Lee’s budget won’t change that,” Tennessee Senate Democrats tweeted. “(Seven hundred thousand-plus) people have lost health coverage or don’t get it at work. Lee’s budget ignores them. Half the state is a child care desert. Lee’s plan keeps it that way.”