Proposed Budget Highlights
The governor’s proposed budget includes strategic funding to modernize transportation, ensure economic and educational opportunity, preserve the state’s natural resources, protect children, and strengthen families.
Tax Relief – Tennessee Works
- Proposes changes to the sales tax, franchise tax, excise tax and business tax estimated to reduce tax collections by almost $54.0 million recurring and $360.0 million non-recurring, including the following:
- Adopts the single sales factor apportionment for franchise and excise taxes.
- Conforms with the federal bonus depreciation provisions of the 2017 Tax Cuts and Jobs Act.
- Creates a three-month sales tax holiday on food.
- Establishes a state paid family leave tax credit against franchise and excise taxes for a two-year pilot period.
Education
- Provides $350.0 million in a recurring cost increase for the new public education funding formula – Tennessee Investment in Student Achievement.
- Combined with a recurring $750.0 million in the base budget, new recurring state funding for the education formula is more than $1.0 billion.
- Recommends a recurring state appropriation of $47.9 million for higher education to fully fund the outcome funding formula and a 7.7 percent inflationary increase.
- Recommends $952.9 million for technical college facilities, including updates to outdated campuses, new buildings/additions, and new campus locations.
Health and Social Services
- Proposes multiple appropriations in the TennCare program including:
- $5.1 million recurring to increase the pregnancy eligibility threshold to 250 percent of the federal poverty level.
- $4.7 million recurring to permanently extend postpartum coverage for a full year.
- $13.6 million recurring to increase the parental eligibility income threshold to 100 percent of the federal poverty limit.
- $5.2 million to implement 12-month continuous coverage for low-income children.
- Provides $22.0 million recurring for children in longer-term placements who are unable to be placed in traditional foster care.
- Recommends $100.0 million non-recurring to make direct support grants to crisis pregnancy centers statewide.
Public Safety
- Recommends 25 forensic services positions and $4.5 million in the Bureau of Investigation.
- Recommends 142 new trooper positions and $28.7 million in the Highway Patrol.
- Recommends 122 agents and $24.7 million in the Homeland Security Office, specializing in school safety and threat assessment initiatives.
- Proposes $10.0 million in evidence-based programming grants for jails, with a mental health focus.
Transportation and Economic Development
- Proposes use of public-private partnerships, allows for alternative project delivery, and brings the electric vehicle fee into parity with gasoline vehicles.
- Establishes the Transportation Modernization Fund and allocates $3.0 billion into the fund from the general fund for transportation projects that address congestion in all four Department of Transportation regions.
- Appropriates $103.0 million ($18.0 million recurring) for the Jobs4TN program to recruit new businesses and support workforce training, marketing, and education.
- Provides $45.0 million non-recurring in grants and services to assist rural communities and distressed counties.
Outdoor Heritage
- To grow state parks and natural areas, recommends $328.7 million ($324.9 million non-recurring) in operating and capital improvements.
- Recommends $41.2 million ($40.8 million non-recurring) for trails.
- Recommends $82.7 million ($71.5 million non-recurring) for environmental cleanup.
State Workplace Investments
- Provides $92.6 million to continue implementing Pay for Performance in executive branch agencies; this funds a 5 percent increase pool.
- Salary increases for state employees not covered by the TEAM Act funded with a $20.8 million appropriation.
- Recommends $165.0 million recurring to address employee salaries in relation to the market.
- Proposes $35.7 million non-recurring to double the state match to employee 401(k) accounts for the first $50 employee contribution.
- Recommends making non-recurring deposits of $300.0 million to the retirement system trust fund and $250.0 million to the OPEB trust fund to reduce or eliminate unfunded liabilities.