Legislature Approves Budget; Adjournment Just Days Away

The Tennessee General Assembly passed a balanced, $42.6 Billion budget yesterday morning, completing its sole constitutional requirement and signaling that 2021 session is rapidly nearing an end.  While the final budget varied somewhat from the budget that Governor Bill Lee had proposed, the essence remains largely the same.  Indeed, shortly after yesterday’s passage, the Governor expressed appreciation for the General Assembly’s support and stated that he is “proud that this budget delivers on some of our top promises to Tennesseans and invests in external organizations meeting the needs of our local communities.”

Having now passed a budget, members plan to return to Nashville next week to complete selected remaining legislation, including the “behind the budget” bills that were included in the final appropriations bill. Adjournment is expected to take place sometime in the middle of next week. 

Budget highlights include $250 million for a K-12 Mental Health Trust Fund, $50 million for a sales tax holiday for restaurants and prepared food, $190 million for FastTrack projects, $100 million for broadband and $100 million to local cities and counties. The legislative revisions to Governor Lee’s proposals included a 50% reduction in the budgeted amount for broadband infrastructure, grants for local governments and a food tax holiday. The legislature then doubled the Governor’s proposed $50 million deposit into the rainy day fund, opting to instead direct $100 million to the fund, taking it to a record $1.55 billion. Legislators also elected to deposit $250 million into the state pension fund. In another noted development, the legislative branch also stripped a proposed $100 reduction in the professional privilege tax paid by attorneys, physicians, financial planners and other professions, with House leadership indicating a strong desire to have a more robust reduction in the tax – including the possibility of total repeal – during the 2022 session. 

Governor Lee Ends Statewide Public Health Orders

 Declaring that COVID-19 is no longer a public health emergency in Tennessee, Governor Lee announced Tuesday that all statewide public health orders would end on May 31. The Governor made the announcements in conjunction with his issuance of Executive Order 80, which among other things removes the local authority of county mayors in 89 of Tennessee’s 95 counties from being able to require face coverings.  It also extends deregulatory provisions, maintains federal funding, and provides that local health clinics will offer a walk-up vaccine option.  In addition, the Executive Order also retires the “Tennessee Pledge” guidelines for businesses operating during the pandemic.   

Governor Lee has also requested that counties with independent health departments – Shelby, Madison, Davidson, Hamilton, Knox and Sullivan – lift all remaining business restrictions, mask requirements, and other measures no later than May 30.

“COVID-19 is now a managed public health issue in Tennessee and no longer a statewide public health emergency,” said Lee. “As Tennesseans continue to get vaccinated, it’s time to lift remaining local restrictions, focus on economic recovery and get back to business in Tennessee.”

Legislators Approve Bill to Prevent Execution of Disabled Persons

 Both the House and Senate passed a measure this week that would allow death row inmates to appeal their sentence on intellectual disability grounds, and allow people to claim in court that they have an intellectual disability. The bill eliminates a procedural technicality and modernizes the definition of intellectual disability in Tennessee code. It aligns Tennessee with a U. S. Supreme Court ruling in 2002 which deemed that executing a person with an intellectual disability is against the Eighth Amendment. It also reflects a lengthy push for legislation allowing courts to examine the intellectual competency of convicted inmates. The bill now heads to Governor Lee’s desk for signature.

To-Go Alcohol to Continue under Passed Legislation

 To-go alcohol will continue to be permitted for two years, extending a provision that Governor Lee passed during the pandemic. Restaurants that are licensed to sell liquor can continue to offer curbside alcohol until July 2023. It is expected to generate $4.7 million in state tax revenue and $3 million the following year. Drinks are required to be sold with food and can only be for one serving of alcohol. Supporters of the legislation believe this will aid small businesses and help restaurants continue to recover from the effects of the pandemic. It passed the House by a 70-21 margin and prevailed 23-4 in the Senate. 

Medical Marijuana Legislation Fails in House Committee

 The push for medical marijuana in the legislature failed by a single vote in the House Criminal Justice committee Tuesday. The legislation had made substantial progress through the legislature, passing all the necessary Senate committees as well as the House Health Committee, but still faced challenges with House Republicans due to marijuana’s status as a schedule 1 drug, which would result in Tennessee conflicting with federal law. To that end, Governor Lee has indicated he will oppose medical marijuana until it is deemed legal by the Federal Drug Enforcement Agency.

The legislation would have decriminalized possession of non-smokable forms of marijuana for 11 conditions. Medical marijuana would not be able to be sold in the state and doctors would be prohibited from prescribing it to their patients. Law enforcement and prosecutors opposed the legislation, claiming it would be more difficult to know who is legally in possession of medical marijuana.

Looking Ahead

 While adjournment is expected to take place next week, several major pieces of legislation remain, including Certificate of Need reform, the creation of a statewide chancery court, and the opioid abatement settlement legislation.  While each measure appears likely to pass at this point, the last several days of any legislative session can be unpredictable at best.  Recent sessions have frequently been marked by high tensions and bickering between the two chambers, although that dynamic has yet to appear this session. 

 Following adjournment we will send our year-in-review, which is a high-level summary of the political landscape of the session, the outcome of major legislation, and a look ahead to the off season.  In the meantime, have a safe and pleasant weekend.