(The Center Square) – Tennessee’s Senate Finance Chair Bo Watson said budget adjustments will be made because the state is $280 million behind its budgeted estimates on tax collections through the first five months of the fiscal year.
“TN General Fund revenues for December underperformed as compared to budget by -$81.4M which puts us at -$283.6M for the year,” Watson wrote on social media. “Unlike our federal colleagues we will make the necessary spending adjustments to balance our expenses with our revenues.”
Tennessee’s December tax and fee collections were $31.5 million less than December 2022.
The budget process will continue when Gov. Bill Lee presents his budget proposal and gives his State of the State speech at 6 p.m. on Feb. 5.
Tennessee had a similar issue last fiscal year when it revised estimates heading into approving this fiscal year’s budget and then the state fell $252 million short of that revised budget.
During a special session last fall, Watson said the Legislature was able to pass new spending bills and close the books on last fiscal year despite the shortfall because $508 million was reverted from TennCare due to a large influx of federal pandemic funds into the program.
At that point, he said a large number was expected against this year and thus the Senate was confident in its approval of school safety spending during that special session.
