State Funding Board Meets this Week as the Governor Holds Departmental Budget Hearings
The state is well into the process of planning for next year’s budget. As has been the tradition, the governor has held departmental budget hearings in November. Those began last Wednesday and wrap up today. These are more of a Q&A between the governor and his commissioners, discussing the needs of departments and agencies and any improvement requests they make. The archived videos of these hearings can be found here:
https://sts.streamingvideo.tn.gov/Mediasite/Channel/mediasiteadmin-tn-budget-hearings-2023
Meanwhile, the State Funding Board met yesterday to hear forecasts and projections from economists on what the national and state economy might look like next year and what Tennessee can expect from revenue sources. Several presenters noted that this current economy continues to experience a significant mismatch between supply and demand of labor.
Even though there is a shortage of workers, prices have risen faster than wages and consumers have decreased their savings rate or in some cases dipped into savings to support consumption. Still, most of the presenters were optimistic that Tennessee would continue to experience revenue growth in roughly a 4% range. While this is not as high as has been seen for the last couple of budget cycles, the growth rate the state experienced during the pandemic is unprecedented for a period without rate increases.
Presenters at the meeting included Ms. Laurel Graefe of the Nashville Branch of the Federal Reserve Bank, Dr. Don Bruce of the Boyd Center for Business and Economic Research at UT, Dr. Jon Smith, Dr. Joseph Newhard and Dr. Fred Mackara of ETSU, Commissioner David Gerregano of the Department of Revenue and Bojan Savic and Joe Wegenka from the staff of the legislature’s Fiscal Review Committee. Materials and recordings from the Funding Board meeting can be found here:
