Budget Cycle

Governor Submits Budget
February 1
Fiscal Year Begins
July 1 

Governor Signs Budget 
10 days after legislative signatures

Budget Links

FY2024 (proposed)
FY2023 (enacted)
FY2022 (enacted)
FY2021 (enacted)
FY2020 (enacted)
FY2019 (enacted)

Proposed Budget - Fiscal Year 2024
On February 6, Governor Bill Lee proposed a fiscal 2024 total budget of $55.6 billion, a decrease of $618.6 million or 1.1 percent compared to fiscal 2023. The decrease is largely attributable to an expected decrease in federal funding due to the expiration of federal pandemic funding. State funds total $29.9 billion, an increase of 11.5 percent and general fund appropriations total $25.2 billion, an increase of 19.3 percent. Recurring state general tax revenues are estimated at $19.9 billion in fiscal 2024, an increase of $437.0 million or 2.3 percent over fiscal 2023. The proposed budget includes a deposit of $250.0 million to the rainy day fund bringing the total to $2.05 billion at the end of fiscal 2024.

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.


  • 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  • Recommends $952.9 million for technical college facilities, including updates to outdated campuses, new buildings/additions, and new campus locations.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.