Proposed Budget Highlights
The governor’s proposed budget is fiscally conservative, invests in core services such as education, public safety, mental and physical health, children’s services, roads and airports, nuclear power, and conservation, and positions the state for future success.
Education
- Proposes legislation to establish a statewide school choice program for Tennessee families while prioritizing low-income students and students with disabilities. The legislation would fund 20,000 scholarships.
- Increases recurring state funds for the public education funding formula and provides non-recurring funds to support a $2,000 bonus for teachers.
- Provides recurring funds for summer learning camps and the summer transportation program.
- Recommends recurring funds to increase the number of school-based behavioral health liaisons.
- Recommends legislation to provide free attendance to Tennessee Colleges of Applied Technology with a recurring appropriation from the Lottery for Education account.
Taxes, Infrastructure and Business Development
- Proposes a joint resolution to fully enact the Tennessee Rural and Workforce Housing tax credit, which was enacted in 2024 but requires a joint resolution to be fully enacted.
- Proposes legislation to reduce the administrative fee collected by the Department of Revenue on all taxes administered by the department.
- Supports legislation to reapportion the sales tax on tires from the general fund to the highway fund.
- Recommends a non-recurring general fund subsidy to the Department of Transportation for existing projects and adding
projects, plus a non-recurring general fund subsidy for aviation infrastructure needs.
- Recommends a non-recurring general fund subsidy to establish a starter home revolving fund aimed at increasing the availability of starter homes across the state with a focus on rural areas.
- Provides recurring and non-recurring funds to create a regulatory framework around the nascent nuclear fusion industry.
Health and Social Services
- Utilizes shared savings from the TennCare Medicaid demonstration waiver to continue initiatives and fund new initiatives including additional slots in the Employment and Community First CHOICES program, workforce development program in the long-term services and supports program, and nursing facility resiliency grants.
- Proposes multiple appropriations in TennCare including for medical inflation, increased utilization, and increased prescription drug costs.
- Provides funds to increase bed capacity at a mental health institute, continue a pilot program to address unmet dental services needs, and provide support services for children with intellectual and developmental disabilities.
Public Safety
- Increases the number of law enforcement positions statewide including new trooper and support positions and additional staff at the Tennessee Bureau of Investigation for victim services, intelligence analysis, aviation, security, Medicaid fraud enforcement, and administration.
- Proposes recurring funds to increase the number of schools included in the statewide school resource officer grant program by including alternative schools.
- Provides recurring and non-recurring funds to upgrade regional response vehicles at the Emergency Management Agency.
Outdoor Heritage
- Recommends recurring and non-recurring funds to create three new state parks, further develop two parks, and support maintenance of state parks.
- Proposes non-recurring funds for environmental cleanup, including a comprehensive water resource management plan and to match federal funds for state water revolving funds and electric grid enhancement.
- Recommends recurring funds for the agricultural enterprise fund and agricultural enhancement fund to start or expand agricultural, food, and forestry businesses.
State Employee Investments
- Recommends funds to continue implementing Pay for Performance in executive branch agencies, funding a pool of funds for salary increases.
- Funds salary increases for state employees not covered by the Tennessee Excellence, Accountability, and Management (TEAM) Act.
- Provides state funding as required to pay salary increases mandated by state law for certain job classifications including judges, the Attorney General, assistant district attorneys, and assistant public defenders.