Winter Storm Cancels All Legislative Meetings this Week

The Capitol City was devastated by a winter storm last weekend that ended up being the worst version of what weather forecasters feared. Nashvillians, like many other Tennesseans, woke up on Sunday to the sounds of trees snapping and popping and limbs crashing to the ground from the weight of massive amounts of ice that coated trees, power lines and roads. At one point, the Nashville Electric Service reported over 230,000 outages – an event that was estimated to have impacted nearly 50% of Nashville residents – and more than 300,000 were reportedly without power across the state as bitterly cold temperatures gripped Tennessee.

Governor Lee closed all state agencies on Monday and Tuesday. Some legislative committee meetings had been tentatively left on the calendar for later in the week, but when Speaker Sexton and Lieutenant Governor McNally were able to get an assessment of the condition of the area around the Cordell Hull building, they made the decision to cancel all meetings, including a Tennessee Advisory Commission on Intergovernmental Affairs meeting scheduled for today (Friday).

Bill Filing Stalls

The House and Senate had set filing deadlines for new legislation near the end of January. With the Cordell Hull complex closed, legislators have been working with staff remotely to develop legislation, but the final versions have not been officially filed. Very few, if any, additional bills have appeared on the General Assembly’s website this week. There will likely be a massive rush of bills that appear on Monday and Tuesday of next week as legislators return to Nashville and are able to approve and sign their bills and turn them in. That’s assuming Mother Nature doesn’t interfere again this weekend. There is a potential for snow in the Nashville forecast, but it is not expected to result in significant accumulation. 

Property Tax Proposals Appear

Two bills that county associations have been hearing rumblings about were filed late last week. One is Senate Bill 2074 by Senate Finance Chairman Bo Watson of Hamilton County. Dubbed the “Local Government Revenue Stability Act,” the bill proposes to eliminate all property tax authority for cities and counties in Tennessee. The state would levy an additional 4% sales tax to provide a fund for reimbursing local governments for the lost revenue. The new sales tax would push the state portion to 11% which, when local option sales taxes are added in, would put sales tax in the majority of Tennessee counties at nearly 14%. The bill surprisingly includes language that says local governments would not be relieved of maintenance of effort requirements for funding programs if revenues from this new state revenue stabilization fund are reduced in the future. But with property tax eliminated and most Tennessee counties already capped on sales tax, there is no other significant taxing authority a local government could use to raise funds to meet those requirements. 

A second proposal is Senate Bill 2002 by Senator Hensley. As introduced, it limits the setting of the tax rate on property by a county, municipality or metro government in any fiscal year at a rate that would render more than the previous fiscal year plus an additional 2 percent, subject to certain exceptions. The bill also establishes a procedure by which the 2 percent cap could be exceeded by the passage of a referendum.

Looking Ahead – State of the State, Budget Proposal and More

Next week will be momentous as Governor Lee delivers his final state of the state address on Monday night at 6:00 p.m. central time. The next day, his proposed budget will be presented to the House and Senate Finance Committees. Once the administration’s priorities are revealed and legislators file their remaining bills, we will have a better indication of what possibilities are out there for assistance to county governments and what potential threats also need to be addressed. 

County Government Day is shaping up nicely for February 23rd and 24th, with the Governor, Lt. Governor, and Speaker of the House all currently scheduled to speak. More details about that event will continue to roll out over the coming weeks.