The state House and Senate came to an agreement on a 2020-‘21 spending plan early Friday morning after three weeks of resumed session marked by protests, racial tension and hurried planning for the unknown economic effects of COVID-19.

The $39.43 billion budget plan cuts hundreds of millions of dollars from the budget passed in March as the General Assembly sought to close due to the pandemic. That plan was itself a major reduction from the budget originally proposed by Gov. Bill Lee before the coronavirus reached Tennessee and shut down many of its businesses.

Among the disputes as the two chambers sought to agree on a spending plan to send to Lee: whether to keep in place a planned reduction to a tax on stock dividends, whether to institute a $100 million sales tax holiday later this year and whether to spend $70 million from reserve funds for one-time bonuses to teachers whose promised raises were eliminated as part of spending cuts.

The House conceded on the hoped-for teacher bonuses. The budget also included millions of dollars in cuts to vacant state positions and for proposed employee buyouts.

Though Lee’s private-school voucher program is on hold amid a court challenge and most of the funding for its implementation was stripped from the new spending plan, the Senate was successful in including recurring administrative funds for the program in hopes that the court challenge plays out and the program can resume operations next year.

A compromise on the sales tax holiday reduced its scope from approximately $100 million to $25 million. The House conceded to the Senate’s plans to keep in place a scheduled reduction to the Hall Income Tax on stock dividends.

The Senate agreed with the House to issue even more bonds for capital projects after years of taking on no new debts. The move is designed to keep as much cash on hand as possible during the uncertain revenue situation forced by the pandemic, according to Republican leaders.

The two chambers and Lee agreed on a $200 million fund for county and city governments, but the House sought to cap payouts to Nashville and Memphis, which both received federal money unavailable to smaller counties.

Gallatin Republican Sen. Ferrell Haile, whose district includes a sliver of Davidson County, called the House position “unfair,” and the House agreed to double the cap on payouts to the state’s two most populous counties. The state funds, unlike the federal money, would not be limited to COVID-19 costs and could be applied to city and county operating expenses.

Throughout the resumed session, the House took up controversial bills left over from before the pandemic while the Senate mostly stuck to its promise to focus on the budget and coronavirus-related legislation. The House spent hours debating abortion, guns and other bills seemingly destined for the dustbin.

But Senate leaders abandoned their pledge late Thursday in deciding to take up abortion restrictions and protest-inspired criminal enhancements originating in the House.

“There was no deal cut,” House Finance Chair Susan Lynn said about the Senate’s turnabout.

The abortion restrictions, originally proposed by Lee, would be among the most severe in the country and pro-choice groups are already promising to challenge them in court. Under the law, commonly referred to as the heartbeat bill, abortions would be banned after fetal cardiac activity is detected, before many women know they are pregnant. The law includes no exceptions for rape or incest.

“This is not the right way to govern,” said Senate Minority Leader Jeff Yarbro (D-Nashville), who protested the body’s decision to reverse its earlier decision not to take up such measures.

The Senate also took up a bill from House Speaker Cameron Sexton that would make vandalism of state property and camping on state property a felony with a 30-day mandatory minimum prison sentence. The bill was inspired by protests at the Capitol, but Sexton confirmed that it would apply to people experiencing homelessness, too.

Not all Republican senators were supportive of the about-face, though, and its progress in the Senate ultimately fizzled out.

"This legislation flies in the face of the efforts we have made for criminal justice reform focusing on utilizing our scarce resources toward violent acts," Sen. Brian Kelsey (R-Germantown) said.

The two chambers also disagreed about how to operate their shared meeting and office spaces amid public-health recommendations about social distancing. The House allowed lobbyists and members of the public to attend committee meetings and floor sessions while the Senate limited attendance to members and a small number of aides and reporters.

That openness in the House contributed to tension in the final week of the resumed session as protesters, including some who had camped outside the Capitol for days, interrupted House debate. House Speaker Cameron Sexton (R-Crossville) ordered attendees forcefully removed from the House balcony several times this week.

With protests over racism and police brutality raging around the country and the Capitol, lawmakers stoked the fire. Republican Mike Carter, a white man, made a joke about black Democrat Joe Towns and fried chicken, leading to a tearful apology. Then House Republican William Lamberth, also white, objected to a routine memorializing resolution about Ashanti Posey, a slain black teenager from Nashville, leading to uproar from black members of the body and outrage from the girl’s family. The Senate later passed a resolution honoring Posey.

That anger bled into the final days of session, as white Republican Jeremy Faison called black Democrat Antonio Parkinson a racist for asking how many people of color had a tangible hand in crafting the budget deal.

Liability protections push stalls

The House and Senate could not reach a deal on a tort reform bill that Republican leaders said was the most important thing they took up this month. The bill would have protected businesses and other organizations from frivolous coronavirus-related litigation, but the two chambers disagreed about whether the protections should date back to the start of the pandemic or apply moving forward. The House, citing a constitutional provision prohibiting retroactive laws, argued for the latter.

“We’re changing the rules of the football game after it’s already started,” said House Judiciary Chair Michael Curcio (R-Dickson).

After negotiations, the House conceded to the Senate, but the House early Friday morning refused to accept the negotiated deal. The early-morning debate united some of the most conservative and liberal members of the House, who agreed with the House sponsor that the bill seemed to be unconstitutional.

As the clock passed 3 a.m., the House used the waning minutes of the legislative session to tally a few political hits. They passed resolutions bashing the media’s reporting on the pandemic, praising state troopers and the National Guard for their handling of protesters and supporting Secretary of State Tre Hargett, currently in the middle of a dispute over absentee voting.

During the debate on the House floor earlier this week, Democrats in the minority made several efforts to amend the budget — efforts that frequently serve as protest statements. This year, Democrats sought to fund trees to cover a statue of Nathan Bedford Forrest on private property, increased funding for schools and a state employee pay raise. Each effort was shot down.

But amid questions over whether people of color contributed to the formation of the budget, Republicans took umbrage.

“Just because you don’t get everything you might want doesn’t mean you’re not being heard,” said Republican Rep. Matthew Hill.

This post originally appeared in our sister publication, the Nashville Post

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