Hamilton County lawmakers caution against using state budget surplus for ongoing programs or tax cuts
State Sen. Bo Watson, R-Chattanooga, said the state is facing inflationary wage pressures to keep enough qualified employees doing the work of state government and to fund increasingly expensive road and building projects.
Watson said state revenues are rising at record highs, but inflation is absorbing most of that increase. The state projects that its tax collections will grow 7.2% to 7.5% in the current fiscal year, which is double what the state normally sees for tax collection gains.
"Over the past two or three years, we have embarked on the largest capital improvement projects that the state has ever been engaged in," Watson said. "Unfortunately, many of those capital projects have been influenced by rising building costs. The challenge of inflation is that it can appear to give you a rosier condition than really exists and it can make things cost more than what was originally budgeted."