Enacted Budget – Fiscal Year 2025
On May 15, Tennessee Governor Bill Lee signed the state’s fiscal 2025 budget that appropriates $52.8 billion in all funds, a decrease of 13.5 percent from fiscal 2024 (as cited in the 2023-2024 Fact Book). The revenue forecast projects general fund revenues of $19.2 billion in fiscal 2025, an increase of 0.5 percent over fiscal 2024. The budget dedicates $100.0 million to the state’s Rainy Day Fund, bringing totals to an historic $2.15 billion.
Several priorities were funded in the budget and other legislation, including investments across tax relief, K-12 education, public safety, and conservation. Education investments include more than $261.0 million to strengthen K-12 education through funding formula growth, including teacher pay raises; $2.5 million to strengthen reading and phonics skills; and $15.0 million to fund charter school facility improvements. To promote strong and healthy families, investments include $197.0 million over five years for rural health; $100.0 million over five years to strengthen mental health care; and $26.7 million for services for people with disabilities. Public safety investments include $17.0 million for an additional 60 troopers and related support staff; $8.0 million to expand the school-based behavioral health liaison program; and funding for a National Guard recruitment incentive package. Other provisions include $63.0 million to create eight new state parks; $15.0 million to expand blueway trail access and drive economic activity in rural communities; $20.0 million to improve water quality; and $10.0 million for the Nuclear Fund to recruit companies that establish a nuclear development and manufacturing ecosystem. For tax changes, the budget, along with separate legislation, simplifies the franchise tax and includes refunds of previously paid tax. The fiscal 2025 impact of the changes is $393.4 million in recurring funding.