Bill > SB1592

This bill establishes procedures to ensure continued funding for municipal operations and local education agencies (LEAs) in Tennessee when municipal legislative bodies and LEA governing bodies cannot agree on budgets. Specifically, if a municipal legislative body and the governing body of a municipal LEA fail to agree on an LEA budget by August 31st, the LEA's budget will automatically be set at the minimum amount required to meet state funding obligations, such as the local match and maintenance of effort provisions under the Tennessee Investment in Student Achievement (TISA) Act. However, if this disagreement occurs for three consecutive years, the LEA's budget for the third year must include a mandatory 3% increase in local funding, unless the LEA failed to submit its budget proposal by May 1st in any of those three years. Additionally, if a municipal legislative body has not adopted a budget by the start of a fiscal year, the previous year's budget and appropriations will continue in effect by law until a new budget is adopted, with restrictions on monthly spending to prevent exceeding prior year's allocations without specific authorization and a corresponding funding source. This continuing budget can last for the first two months of the fiscal year, and with approval from the comptroller of the treasury, can be extended for a third month under extraordinary circumstances, but not beyond that. The bill also repeals an existing section of Tennessee Code Annotated related to municipal budgets.