The budget moved front and center on Capitol Hill during the week of February 8th as Governor Bill Lee presented his proposal to fund state government with improvements prioritizing education, health care, and job development, particularly Tennessee’s rural communities. Lee’s State of the State / Budget Address was also highlighted by an accounting of Tennessee’s COVID-19 response and plans for a full economic recovery. Consistent with conservative principles, the budget does not propose new taxes. Tennessee is recognized as the third least taxed state in the nation. Since 2011, the General Assembly has reduced sales tax on food by nearly 30 percent, phased out the Hall income tax, eliminated the gift and inheritance taxes, reduced the professional privilege tax for 15 professions, and cut taxes on manufacturing to enhance job creation.

2021-22 budget continues focus on improving education in Tennessee - The 2021-22 budget proposes investing an additional $341.6 million to improve education for students in kindergarten through 12th grade in Tennessee. The new funds include $120 million to raise the instructional salary component for teachers and other positions; $110 million to improve literacy rates in the lower grades; $24 million in facility grants for high performing charter schools; and $70.5 million to fully fund the Basic Education Program (BEP).

In higher education, the proposed budget provides for improvements of $157.2 million, including $36 million to fully fund the Outcome-Based Funding Formula. The formula is a complex funding tool that allocates state funds to Tennessee’s public colleges and universities based on performance. The budget proposal also includes $10 million to develop work-based learning and apprenticeship opportunities through the Governor’s Investment in Vocational Education (GIVE) Act. Currently, Tennessee has 28 GIVE Act projects in 18 at-risk counties. The new funds would create 10 additional GIVE sites, with a priority on distressed and at-risk communities with the greatest need for workforce revitalization. Also included in the budget is $6.1 million dollars to fund the merger of Martin Methodist College in Pulaski with the UT System.

Budget prioritizes jobs, expansion of broadband, and rural economic development – Governor Bill Lee continued a strong emphasis on job creation and rural development this year with a significant $472 million investment in his proposed budget. One of the highlights of this year’s budget proposal is $200 million to expand high speed broadband to just about every community in Tennessee. This is critical for job recruitment, education and telehealth services.

The budget also proposes to invest $21 million in rural communities and distressed counties to directly support rural infrastructure, industrial site development, small business development and revitalizing small town main streets. Similarly, a key investment of $5.5 million is proposed for the Agriculture Enhancement Program (TAEP). The program provides cost share dollars to agricultural producers for the purpose of making long-term investments in Tennessee farms and communities. In other jobs investments, the budget provides $95 million for Fast Track Grants used for specific infrastructure projects benefitting one or more companies committed to creating new jobs and investing capital in Tennessee. Finally, the budget proposes $135 million to impact job creation and investment opportunities in Tennessee’s aviation industry. Aviation, which is critical to the economic development of communities across the state, was hard hit by the economic effects of COVID-19.

Health and social services improvements included in new budget proposal – Health and social services would be improved under the budget presented by Governor Bill Lee in his State of the State / Budget Address. $1815 million in health and social services improvements in the budget include funds to extend postpartum coverage to all women receiving TennCare benefits from 60 days to 12 months to increase access to care for new mothers. It also includes $37.9 million to cover medical inflation in the TennCare program; $11 million for the Employment and Community First (ECF) Choices Program to help people with intellectual and developmental disabilities become employed and live independently; and $9.7 million to help raise the hourly pay for direct support professionals of those who work with some of Tennessee most vulnerable citizens through the Department of Intellectual and Developmental Disabilities (DIDD).

The budget also proposes widening the state’s Behavioral Health Safety Net and Health Care Safety Net. The $2 million investment in the Health Care Safety Net focuses on services that help uninsured patients get preventative and disease management care and avoid more costly hospitalizations. The $6.5 million in funds for the Mental Health Safety Net would provide services for school aged children struggling with mental health issues. In response to the ongoing battle against COVID-19, the new state spending plan proposes $150 million to provide testing, vaccine supports, hospital and school assistance, and personal protection equipment (PPE). Tennessee has built a strong infrastructure to deliver tests in partnership with the medical community across the state.

Budget proposes $200 million for local government recovery and rebuilding – Local governments will be aided by improvements proposed in Governor Bill Lee’s 2021-2022 budget. The proposal includes $200 million in infrastructure grants to help local government and communities recover from COVID faster. The funding will assist local governments with road projects, school construction and renovation, IT hardware upgrades, utility system upgrades, public safety improvements and capital maintenance. The budget also offers improvements for local government jails. Approximately $16.5 million is proposed to assist local jails with evidenced-based programs to help inmates prepare to obtain employment and become good and productive citizens when they leave prison.

Contact Senator Hensley at

425 5th Avenue North, Suite 746

Nashville TN 37243

615-741-3100

Toll Free 1-800-449-8366

ext. 13100

Fax 615-253-0231

855 Summertown Highway

Hohenwald TN 38462

Phone 931-796-2018

Cell Phone 931-212-8823

E-mail:

[email protected]