A Recap of the 2023 Tennessee Legislative Session
BY JUSTIN OWEN
The first session of the 113th Tennessee General Assembly has adjourned. While this session received much infamous national attention, I am proud to say that important work still got done to protect Tennesseans’ freedoms. Here is a look at the priorities advanced by our advocacy partner Beacon Impact that passed this year.
Largest single tax cut in Tennessee history: In January, Beacon’s Entrepreneurship & Innovation Council outlined a series of tax reforms that would make our state more competitive and business-friendly. Soon thereafter, Gov. Bill Lee and legislators proposed legislation adopting each of our tax recommendations, all of which ultimately passed. As a result, more than 140,000 small businesses no longer have to pay the state’s business/gross receipts tax, and the top tax rate for other businesses was cut by 37%.
Another reform makes filing personal tangible property tax returns easier on small businesses by streamlining their paperwork, which can often cost more to comply with than they pay in the tax itself. And last but certainly not least, Beacon has long called on the legislature to fix Tennessee’s anti-competitive franchise and excise tax, which is tied for the highest corporate tax of all bordering states. Gov. Lee’s reform package fixed that problem. Along with a one-time grocery tax holiday of three months, these reforms returned $400 million in tax cuts to taxpayers this fiscal year and $150 million in ongoing tax cuts each year thereafter.
Expansion of parental choice: The legislature expanded the state’s education savings accounts program to families in Hamilton County, which has the third-highest number of failing schools after Shelby and Davidson County. And now families who previously qualified for the ESA program will be grandfathered in even if they no longer qualify because the program was held up by legal attacks for two school years. As a result of these changes, thousands more families will have access to schools that better meet their children’s needs. This is great progress, and we will continue to fight until every single Tennessee family has access to a quality education.
Protecting worker freedom: On the heels of the Beacon-led effort to enshrine right-to-work in our state constitution, the General Assembly continued to enact legislation to protect Tennessee workers. Amid attempts by labor unions and federal politicians to strengthen union power in the workplace, a new law will require any company receiving more than $25 million in state tax incentives to protect workers’ rights to a secret ballot in unionization efforts. Unions will no longer be allowed to become certified by the card-check method that is rife with abuse and intimidation.
Another new law proposed by Gov. Lee prohibits the practice whereby local school districts use taxpayer money to collect teachers’ union dues directly from their paychecks. Beacon Impact has worked for three years to stop this practice so that teachers can keep their hard-earned money and taxpayers aren’t paying to collect dues for a political organization that does not align with their values.
Making government work better: Beacon has been raising the alarm about local governments enacting zoning and property use changes as soon as they are merely proposed and without ever casting a vote. To end that practice, the legislature overturned a Tennessee Supreme Court doctrine known as the “pending ordinance doctrine.” Now, any change affecting Tennesseans’ personal or business property can only be imposed once it passes the local legislative body.
Another bill brought by our allies at the Institute for Justice allows food trucks to obtain a single statewide fire permit rather than having to go from city to city to obtain individual inspections for each city they may operate in over time. This drastically reduces the time and cost for these entrepreneurs to operate since their business is by its very nature mobile.
Healthcare reform: The legislature continued the process of reducing the impact of certificate-of-need laws by merging two state boards that have oversight over new healthcare facilities and services. Another bill that passed will make it easier to access telehealth services for behavioral health. These reforms directly impact healthcare cost and access, issues that came up during Beacon’s statewide listening tour last year.