Tennessee House Bill HB0789

Tennessee 2023-2024 Regular Session

• Introduced: 1/30/23
• Refer: 2/2/23

Caption

AN ACT to amend Tennessee Code Annotated, Section 67-6-103, relative to distribution of revenues.

Impact

The passage of HB 789 would significantly impact how revenues are distributed among Tennessee's local municipalities. It establishes a mechanism that ties the distribution of sales tax to population metrics determined by the latest census data. This new formula aims to fairly allocate resources according to population sizes, which could help address disparities in funding among larger and smaller municipalities. Furthermore, the bill mandates a deduction of 1% from the monthly allocations meant for municipalities, which is earmarked for a municipal technical advisory service operated by the University of Tennessee. This service will assist municipalities in various areas of governance and public service.

Summary

House Bill 789 amends Tennessee Code Annotated, specifically Section 67-6-103, which governs the distribution of certain revenues among municipalities in Tennessee. The bill aims to establish a clear schedule for the allocation of funds to municipalities using a percentage of sales tax collections. The percentages are set to gradually decrease over the upcoming years, starting with 29.0141% for the fiscal year 2023-2024 and decreasing to 28.5262% by fiscal year 2028-2029. This structured approach to revenue allocation intends to ensure financial stability for municipalities within the state by guaranteeing a consistent flow of revenue over several years.

Contention

While the bill aims for structured revenue distribution, there may be points of contention regarding the percentage allocations decreasing over time. Some stakeholders might argue that less funding could hinder smaller municipalities' ability to provide services or maintain infrastructure. Additionally, the necessity of maintaining transparency and accountability in how funds are used and distributed could be a debate point among municipalities and state officials. Questions may also arise about the potential repercussions of public service funding through the proposed deduction for the advisory service, raising concerns about the sufficiency of remaining financial resources for local governments.