Lawmakers divided on how to allocate $3.7 billion in state aid for Tennessee

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NASHVILLE, Tenn. (WKRN) — The federal government is sending $350 billion to state and local governments. The money coming from the American Rescue Plan gives states like Tennessee wide discretion on how to use the funds.

The United States Department of the Treasury said the dollars are intended to meet the needs of those hit hardest by the COVID-19 pandemic.


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$3.7 billion dollars from the American Rescue Plan will come to Tennessee to cover four areas:

Responding to decreasing the spread of covid-19.
Replacing lost revenue.
Support for households and businesses.
Addressing systemic public health and economic challenges.

Governor Bill Lee who will decide how to spend the money wouldn’t answer News 2’s questions about the funding when asked earlier today.

“I will not do an interview here,” said Gov. Lee, who often appears at events for photo-ops.


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At an event later in the day, Lee did not specifically outline how he would like to see the dollars spent.

“There are a number of initiatives that we’ll be looking for, looking at with regard to how federal funding will be used,” Gov. Lee said.


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House Democratic Caucus leader Vincent Dixie says he’s not hopeful Gov. Lee will use the money to aid Tennesseans hit hardest by the pandemic.

“This administration seems to thrive on hoarding cash for a rainy day when it’s storming outside,” Rep. Dixie said.

He says now is the time to reach out and let Gov. Lee know how the money should be spent.


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“This is what we want help with, we want help with our childcare expenses, we want our teachers and first responders to get better pay rate, we want to make sure that we can get healthcare because we need it and make it more accessible,” Rep. Dixie said.

However, Republican Senator Mark Pody says the economy is revving up again, and part of the solution is getting people back to work.

“You use a scalpel to help those people that needs help, but don’t just throw money and thinking that’s going to solve problems, we need solutions,” Sen. Pody said.


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Sen. Pody added the money is a temporary fix, and people should not be stuck on cash that won’t last.

“I’m getting a little bit frustrated with all the money that the federal government is actually sending across the states, and there’s got to be a point in time that we gotta pay that money back, and unfortunately it’s going to be falling on our children and our grandchildren,” Sen. Pody said.

The money could also go to infrastructure projects but cannot go towards off-setting tax cuts.

Some Democratic lawmakers say a special session should take place so legislators can have input and address needs left out during the regular session.


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Gov. Bill Lee’s office said there are no plans for a special session:

“The Governor formed the bipartisan Financial Stimulus Accountability Group to ensure transparency and proper management of federal relief funds. We’re confident this group will continue to support Tennessee’s economy and effectively manage the additional $3.8 billion that was recently approved by Congress.”

Gov. Lee’s office added that all information about the handling of federal relief funds is accessible to the public online, click here.

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