Lawmakers Could Tap Rainy Day Fund To Help Tennessee’s Flood-Damaged Counties

Governor Lee shies away from using rainy day fund, focuses on TennCare loans.

Image: Sen. Rusty Crowe, a Johnson City Republican, wants to tap Tennnessee’s rainy day fund to aid East Tennessee’s flood-ravaged counties. Image Credit: John Partipilo

By Sam Stockard [The Tennessee Lookout -CC BY-NC-ND 4.0] –

An East Tennessee lawmaker wants to tap the state’s rainy day fund to bolster flood-ravaged counties, despite hesitation by the governor to use anything other than a TennCare loan program to jump-start the region’s recovery.

Republican Sen. Rusty Crowe of Johnson City favors grants from the state’s $2.15 billion rainy day fund – not loans – to provide a long-term boost for 13 mountainous counties rebounding from cataclysmic flooding caused by Hurricane Helene.

The $100 million the governor’s cabinet is taking from TennCare to provide loans to help affected counties remove rubble and repair water and sewer systems is only the “tip of the iceberg,” Crowe told the Tennessee Lookout.

Carter County, for instance, needs up to $9 million of the loan fund to deal with debris cleanup. Yet the county faces another $180 million in damage costs and has a rainy day fund of only $20 million, Crowe said.

“I do think we have had a disastrous rainy day event … we are going to have to help these counties as the cost is beyond their capabilities,” Crowe said in a statement to the Tennessee Lookout.

The veteran senator said he will push to use the state’s rainy day fund, which will require a legislative appropriation either in early January when the 114th General Assembly convenes or in a potential special session in January.

Gov. Bill Lee is declining to endorse use of the rainy day fund or extra funding, only saying, “I’d be interested in knowing their ideas about it. Most importantly, I want to make sure the counties are made whole.”

In addition to tapping the rainy day fund, the state needs to enact a property tax rebate for lost and damaged homes in the affected counties, Crowe said. Residents in the region also are likely to need counseling and years of services to recover from the flood’s effects, he said.

Talk surfaced this fall about the governor calling a special session in January to consider a private-school voucher bill, though several key lawmakers call that “pure speculation.” Still, such a move is drawing criticism from those who believe increased funding should be considered first for flood victims in East Tennessee.

Lee said last week his staff opted for the loan program because it anticipates all the money will be reimbursed by the federal government. The state loans are designed to enable counties to move forward with work and then repay them with federal funds.

“If there are decisions that the General Assembly wants to consider for additional relief to counties, I suspect that’ll come up in the session,” Lee said.

The deadline is this week for flood-damaged counties to apply for loans through the recently-enacted program using money derived from a “shared-savings” program between the state and federal government within TennCare. Lee’s cabinet decided to make that money available until counties receive funds from the Federal Emergency Management Agency, which they can use to pay back the state.

The state has committed nearly $70 million of the $100 million to those damaged counties, and the money is to be distributed this week, according to Lee. He said TennCare still has about $200 million remaining in the “shared-savings” program.

The state is considering “multiple avenues” of relief for businesses and individuals through FEMA to extend the time frame for receiving help and larger federal matching funds than are usually made, he said. 

FEMA also is offering a new housing assistance program for this disaster that the state hasn’t used, Lee said.

The Tennessee Department of Human Services is providing food assistance to flood victims who normally wouldn’t qualify, and the Department of Workforce and Labor Development is offering unemployment payments for flood victims whose homes were destroyed, according to Crowe. The Department of Revenue is providing up to $2,500 in sales tax rebates for appliances and other possessions lost in the flood, Crowe said.

Anita Wadhwani contributed to this story.