Senate Finance approves four agency budgets; comptroller warns property tax relief shortfall

The Senate Finance, Ways and Means Committee approved the FY2027 operating budgets for the Comptroller, Secretary of State, Department of Revenue and the Treasury on Feb. 10, advancing routine appropriations while spotlighting a handful of programmatic risks.

Comptroller presentation and property tax relief: The Comptroller’s office said Governor Lee’s proposed budget provides funding to meet statutory responsibilities, but warned the state’s property tax relief program for low‑income elderly, disabled recipients and disabled veterans is projecting recurring shortfalls. The program’s statutory recurring appropriation is roughly $41 million; the governor proposed a $10 million nonrecurring addition for FY27. The comptroller’s office reported FY25 expenditures of about $44 million and FY26 projected spending near $48 million. Office staff provided recipient counts: 111,918 total recipients statewide; about 77,225 (roughly 70% of recipients) are low‑income elderly or disabled and consume about 30% of program dollars, while 34,693 recipients are veterans or surviving spouses who currently consume about 70% of the program’s dollars. The office warned that, absent structural change, the veterans category alone is growing at an estimated 14% year‑over‑year and will drive renewed shortfalls by FY28. The committee discussed proration mechanics under current law (payments are in arrears and proration could cause 12–18 month lags), carryforward/reserve amounts and the difficulty of funding recurring obligations with nonrecurring dollars.

Comptroller budget vote: The committee approved the Comptroller’s budget by roll call (10 ayes).

Revenue: Department of Revenue Commissioner David Gerigano presented a request that recognizes a $2 fee per perfected motor vehicle lien tied to a new electronic lien and title (ELT) system required by Public Chapter 745 (2024); the department projects that fee as a pass-through to the vendor and expects it to be borne by lienholders/service providers rather than vehicle purchasers. The department also proposed reductions totaling about $740,000 by eliminating a remaining appropriation for electronic insurance verification ($62,000), closing final out‑of‑state office leases (~$577,000) and achieving scanning contract efficiencies (~$100,000). The committee raised questions about the tire tax informational reporting line: revenue staff estimate the tire tax base at roughly $80 million but currently see about $2 million per month reported on the informational line because many vendors omit the optional line; department staff plan outreach to improve reporting compliance.

Revenue budget vote: The Department of Revenue budget was approved by roll call in committee.

Secretary of State: Secretary Hargett updated members on the Safe at Home program, the rollout of a new Tennessee charitable and business filing system (initial call‑volume issues largely resolved), and digital preservation work at the State Library and Archives. On elections funding, the secretary explained a previously appropriated $8 million is earmarked as a reimbursement program for the May primary and has not yet been expended. The committee also questioned SAVE database checks that initially flagged approximately 14,000 mailings; secretary staff said the notification process and follow up reduced the list to 42 potential non‑citizen matches that were referred to the FBI for investigation (see separate article on SAVE). The secretary said compliance requests sent to libraries allowed for extensions when needed, and staff reported the digitalization project of analog recordings will complete this summer.

Secretary of State budget vote: Committee approved the Secretary of State’s budget by roll call (9 ayes).

Treasury: The treasurer’s office reviewed the department budget, highlighted the composition of funds (including sports wagering pass‑throughs), and flagged several specific items. The Electronic Monitoring Indigent Fund (EMIF) shows recurring revenue of roughly $350,000 while annual expenditures run about $1–2 million; the treasury requested $1.2 million recurring to stabilize the program but that request was not included in the governor’s recommendation. Treasury also requested a position to coordinate cash‑flow forecasting with the Tennessee Housing Development Agency (THDA); the treasurer explained statutory duties as THDA treasurer and said the office plans to rescind an older memorandum that delegated active debt management, seeking closer oversight because THDA’s portfolio includes billions in revenue bond debt. Treasury staff also requested $1.45 million in state funding to offset a year‑to‑year dip in federal reimbursements for the Criminal Injuries Compensation Fund and a $2.25 million recurring increase to cover unclaimed property vendor contract costs.

Treasury budget vote: Committee approved the Treasury budget by roll call (10 ayes).

What’s next: Each approved budget will be processed through the regular legislative calendar. Several members urged longer‑term policy work on the property tax relief program’s eligibility/value limits and attention to EMIF and THDA exposure going into the next budget cycle.