Capitol Update – Week of April 17th

Legislature Passes $59.7 Billion Dollar Budget

After passing the budget out of the Finance Committees on Tuesday, the General Assembly passed the state’s nearly $60 billion budget on Wednesday. While in some years there have been significant disagreements about budget priorities between the House and Senate, those were all worked out before the bill was brought to the floor for a vote. The two chambers passed identical versions of the budget, which is the only constitutionally required duty of the legislature. The legislature did redirect approximately $180 million of proposed spending items in the Governor’s proposed budget, but left it largely intact. 

Real Estate Transfer Tax

County associations advocated all session for the state to send a portion of the real estate transfer tax back to the counties where the tax was collected. An amendment added to the proposal (SB1080/HB649) would have phased the shift of funds in over three years, with 0% distributed back to counties in the FY 25-26 budget, 25% in FY26-27, and 50% in FY27-28. Even with this concession, legislators were concerned about binding future General Assemblies to pay for a measure when they were budgeting no funding for it this year. While the final outcome was disappointing, the proposal faced a difficult path this year when the state’s revenues for the first nine months of the year came in only 0.19%  or $22.8 million over estimates. Although the legislature could not find funds to enact the real estate transfer tax change in this budget, numerous legislators expressed their intent to raise the issue with the Governor and ask him to include the proposal in his budget next year. TCSA and its affiliates appreciate all the hard work the bill sponsors, other legislators and county officials put into this effort. We plan to continue pushing this initiative over the coming year. 

Education Maintenance of Effort

At the end of this week, the proposal setting new requirements on education maintenance of effort (HB348/SB614) remained in the House Finance Subcommittee where it had been placed “behind the budget” previously. As amended, the bill provided that if revenue collections for a county fail to generate the budgeted maintenance of effort for the school system, the county cannot increase funding for other offices with a maintenance of effort requirement (mayor, highway, sheriff and election commission) until it restores the shortfall in the education budget. The bill was approved by the Senate on Monday night of this week. County associations will continue to monitor the bill next week, but it appears it will not be voted on by the House this year. The Finance Subcommittee passed out a selection of bills that had been placed behind the budget, but this initiative was not among them. 

Undocumented Students

It also appears that the House will not be voting on a measure regarding the education of undocumented students this year. HB793/SB836 has taken different forms as it has been presented in committees, with some versions requiring local school districts to check the documents of all students and charge tuition to any undocumented students. In the Senate, the bill narrowly passed on the floor last Thursday with 19 votes, with bi-partisan opposition. In the House, the bill was placed behind the budget by the Finance Subcommittee on Monday of this week. It remained there at the end of this week and the impression around the legislature is that there is not sufficient support in the Finance Committee for the bill to be approved.      

Revenue Proposals 

HB1329/SB1315 is a bill brought by Governor Lee’s administration to reduce the fee charged by the Department of Revenue for collecting and remitting various taxes to local governments from 1.125% to 0.75%. This concept has been supported for several years by TCSA, specifically regarding the administrative fee on the local option sales tax. The bill has now passed both the House and Senate and heads to the Governor for his signature.  

SJR48, which would have ratified a recommended rate increase in 911 fees from $1.50 to $1.86, was approved by the Senate this week, but it appears the delays in that chamber will prevent the resolution from passing the House this year. The resolution still has to be introduced in the House, be referred to standing committees (all of which have now closed), then the Finance Committee and on to a floor vote. Joint resolutions have to be completed by one chamber before the other can take them up. The proposal can still be approved by the House next year. 

TACIR Studies

SB160/HB83 has been amended to call for TACIR to study the issue of ambulance reimbursement and costs. As originally introduced, the bill required municipalities that did not provide EMS to share in the cost of services with the county. The amended bill passed on the Senate floor last week. In the House, the bill was approved in its amended form by the Finance Committees and is expected to be heard on the floor next week.

Speaking of TACIR studies, SB703/HB736  directs that commission to study sustainable funding sources that would meet this state’s future transportation infrastructure needs and submit its recommendations to the legislature. That bill has passed the Senate and will be headed for a floor vote in the House next week.

Adjournment Coming Next Week

After adopting the budget this week, the legislature is on track to conclude its remaining work and then adjourn for the year the next week. The House recessed shortly before noon Thursday and plans to return at 10:00 a.m. Monday. The House Finance Subcommittee and Finance Committee met after lunch to review and approve the final bills to be considered next week. The Senate is likewise returning Monday for the Finance Committee to consider its remaining bills, then will work in floor sessions to finish their work. Leader Johnson stated that he hopes the Senate could finish its business on Tuesday, but it might continue until Wednesday of next week.