Municipal budgets would continue when local officials miss deadlines

A municipality and its local education agency would use the legally required minimum school budget if they cannot agree on a budget by August 31. This applies to municipalities that have established a local education agency under Tennessee law. The budget would cover the local funding needed to meet the state education funding law's local-match and maintenance-of-effort requirements. If the parties fail to agree for three straight fiscal years and the agency receives only the minimum required funding, the third-year budget would include a 3% increase in required local school funding. The 3% increase would not be required if the local education agency failed to submit its budget proposal by May 1 during any of those three years. The minimum-budget rule would apply when the parties have not agreed by August 31 of a year; the possible 3% increase would apply in the third consecutive fiscal year of failure to agree.

A municipality would keep using the prior fiscal year's operating budget until it adopts a final budget. This applies when a municipal legislative body has not adopted a budget by the first day of the fiscal year. Municipal agencies and other recipients generally could not commit more money in a month than they received in the comparable month of the prior fiscal year. An ordinance could approve a larger monthly amount only if it identifies an equal funding source, and the extra amount would become part of the final budget. The continuing budget could be amended under final-budget procedures for needed debt payments and court-ordered spending. The budget could continue for two months automatically and for a third month only with the comptroller's approval after the municipality shows extraordinary circumstances. The continuing budget would begin when the new fiscal year starts without an adopted budget and could not last beyond the last day of the third month; a third-month extension request must reach the comptroller by the fifteenth day of the second month.

The measure would delete Tennessee Code section 6-56-210. The supplied text does not identify what subject, people, or local governments section 6-56-210 currently covers. The deletion would take effect when the act becomes law.