House, Senate reach deal and pass $38.5 billion budget

The 111th Tennessee General Assembly has now successfully completed its only requirement for the year: Passing a budget.

The $38.5 billion state budget, the first to be drafted by Gov. Bill Lee's office, underwent changes from both the House of Representatives and Senate before the two chambers ultimately agreed on a solution Tuesday.

The House adopted amendments on Tuesday evening to conform to the 2019-2020 budget document that the Senate passed earlier that day — a version that included all of the House's requests.

Despite approving the expenditures, Senate leadership raised concerns about many of the House's appropriation requests being local projects without a wide regional connection or without pertaining to tourism.

It was the first time House members have unanimously approved a budget since Gov. Bill Haslam's first year in office in 2011, said House Speaker Glen Casada.

Members in the House chamber Tuesday night applauded when Rep. Susan Lynn, R-Mt. Juliet, chairman of the finance committee, announced that the final version of the budget would fully fund a Medicaid waiver program for children with severe illnesses and disabilities.

The Katie Beckett waiver, which would provide treatment coverage for those children whose families don't otherwise qualify for Medicaid, had become a sticking point in the budget negotiation process last week and into the weekend.

While the Senate originally said it intended to only fund roughly $15 million of the $27 million program, the upper chamber ultimately cut back some of its other initiatives to allocate more funding for the program and enact roughly $37 million in current and future tax cuts that had been outlined in the Senate plan.

Senate budget leaders raised concerns with the House's proposal to use new revenue from an expanded online sales tax, describing it as unreliable revenue, despite the state comptroller's office confirming it was safe to budget around.

Among the highlights of the budget are:

• A $225 million deposit to the state's Rainy Day Fund, bringing the fund's reserve to $1.1 billion
• $71.3 million in teacher salary raises
• $15.6 million starting salary increases for state correctional officers
• $5.5 million to raise the salaries of veteran correctional officers and counselors by 7.5%  
• $27.3 million to fund the state's share of a Katie Beckett waiver program
• $30 million in additional funds for a school safety initiative to place resource officers in every school around the state
• $22 million in cuts to the state's $400 annual privilege tax, eliminating the tax on 15 different professions
• $222 million in new funding for economic development, including $115 million for Volkswagen and Amazon
• $39.4 million to fully fund the state's Basic Education Program to account for growth and inflation
• $8 million to expand the Tennessee Early Intervention Services programs for children from birth to 3 years old who have learning challenges
• $25 million the Governor's Investment in Vocal Education initiative to expand K-12 career and technical education programs in rural areas
• $24.7 million in funding to treat the Hepatitis C outbreak in prisons
• $3.5 million to expand the Health Safety Net fund for uninsured adults

Reach Natalie Allison at nallison@tennessean.com. Follow her on Twitter at @natalie_allison.

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