Tenn. lawmakers approve $33.8B annual state spending plan after refusing to add Medicaid plan

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NASHVILLE, Tennessee — State lawmakers on Thursday approved Tennessee's $33.8 billion annual spending plan after rejecting Democrats' attempts to add a provision to authorize Medicaid expansion that had been twice defeated earlier in the year.

The House voted 80-12 in favor of the budget, and the Senate later followed suit on a 32-1 vote. Passing a balanced budget is one of the few constitutional requirements for Tennessee lawmakers.

The Republican-controlled House voted largely along partisan lines to refuse the attempt to allow Republican Gov. Bill Haslam to strike a deal with the federal government for Medicaid expansion.

Haslam's Insure Tennessee plan would extend health coverage to 280,000 low-income people, with state hospitals covering the $74 million state share to draw down $2.8 billion in federal money. But fellow Republicans in the Legislature have balked at approving a program so closely tied to President Barack Obama's health care law.

Other elements of the budget bill included:

SCHOOL DISTRICT LAWSUITS

Democrats chafed at the late addition of a provision to ban school districts from using state education money to pay for lawsuits over funding. Hamilton County and several smaller surrounding counties have filed a lawsuit against the Haslam administration over what they call inadequate state funding, and school boards in Knoxville, Nashville and Shelby County. Efforts to remove that language were defeated largely along partisan lines.


INCENTIVES

While some area lawmakers had raised concerns about $166 million in economic incentives for Volkswagen because of labor activity at the German automaker's plant in Chattanooga, the Legislature approved the money with no debate.


STATE MUSEUM

Haslam's proposal to spend $120 million on a new state museum in Nashville drew the ire of state Rep. David Alexander of Winchester, who tried to redirect half the money to the state's emergency reserves and to the road building fund. Alexander's amendment was rejected and both chambers approved the money for the museum to be built near the state Capitol.


RAINY DAY FUND

The budget plan includes adding more than $76 million to the state's rainy day fund to bring the balance to $568 million. The state's emergency cash reserves reached a high of $750 million in 2008, but were drawn down to as little as $284 million in 2011 as the state sought to fill budget gaps during the Great Recession.


LONGEVITY PAY

Haslam's proposal to end longevity bonuses for state employees was heavily modified after being met with strong bipartisan opposition in the Legislature. The change will now only apply to new hires, meaning current state workers will keep the bonuses worth $100 for each year of service — up to a maximum of $3,000.

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