NASHVILLE, TN — Treasurer David H. Lillard, Jr. expressed gratitude to Sen. Bill Ketron for sponsoring legislation that will allow better monitoring of state government’s spending plans. The legislation (SB 1571/HB 1891) was recently signed into law by Gov. Bill Haslam.
“This new law will improve the State of Tennessee’s financial planning,” Treasurer Lillard said. “Business corporations prepare cash flow forecasts for their operations. This is a good practice in the private sector, and this new law will require state government to use this process regardless of future changes in office holders. I commend Sen. Ketron for his work in steering these common sense changes through the legislative process. Sen. Ketron led the charge to ensure that our state is a leader in financial accountability and transparency.”
“I am very pleased to have sponsored this legislation,” Sen. Ketron said. “This will make state government finances more transparent to Tennessee taxpayers and will hopefully serve as model legislation for other states in the future.”
The new law establishes a cash flow committee, which will publish forecasts of state revenue and expenditures 18 months into the future. While the state routinely forecasts revenue for budget planning purposes, there has not previously been a statutorily required and published effort to monitor revenues and expenses on a month-by-month basis.
The committee will include representatives from the Treasury Department, the Comptroller of the Treasury, the Department of Revenue and the Department of Finance and Administration. The committee will use revenue estimates provided by the Department of Finance and Administration and expected spending plans from state departments and agencies to forecast what the state’s cash balance will be each month.
The cash flow projections will be available for public viewing on the Treasury Department’s web site beginning in January 2012. Sen. Ketron was the primary sponsor in the Senate, while Rep. Curtis Johnson was the primary sponsor of the legislation in the House of Representatives.