Tennessee House Bill HB1402

Tennessee 2025-2026 Regular Session

• Introduced: 2/10/25
• Refer: 2/10/25

Caption

AN ACT pursuant to Article II, Section 24, of the Tennessee Constitution providing for the dollar amount and rate by which the growth of appropriations from state tax revenues will exceed the estimated growth in the state's economy and to amend Tennessee Code Annotated, Title 9, Chapter 4, Part 52.

Impact

The implications of HB1402 on state laws include a more structured methodology for appropriations that aligns with economic performance. By formally linking tax revenue growth to economic indicators, the bill is expected to foster responsible budgeting practices. Supporters argue that this alignment ensures that state expenditures do not outpace economic capacity, thereby promoting fiscal stability. This could potentially lead to better funding for essential services as appropriations would be more reflective of real economic conditions.

Summary

House Bill 1402 aims to amend Tennessee Code Annotated, specifically Title 9, Chapter 4, Part 52, to establish a defined dollar amount and rate by which the growth of appropriations from state tax revenues exceeds the estimated growth in the state's economy. This legislative effort is rooted in Article II, Section 24, of the Tennessee Constitution, emphasizing a systematic approach to manage state tax revenue allocations in relation to economic growth projections.

Contention

However, the bill could also spark debate regarding the limitations it may impose on state funding flexibility. Critics might argue that strict adherence to this framework could constrain funding for urgent needs or emergent situations that require additional resources despite economic growth not aligning with appropriations. Furthermore, establishing such metrics could lead to rigorous scrutiny of budget decisions, which could be met with resistance from various sectors reliant on state funding for projects and initiatives.