Full 'Tennessee: Leading the Nation' agenda passes

Gov. Bill Lee

(April 23, 2023) On April 21, Tennessee Gov. Bill Lee marked the close of the 2023 legislative session, which includes the successful passage of his $56.2 billion budget and full legislative agenda as outlined during his State of the State address in February.

“To prepare Tennessee for continued growth and prosperity, we’ve made strategic investments to cut taxes, strengthen our workforce, ensure educational opportunity and modernize transportation infrastructure across our state,” said Lee. “I commend the General Assembly for its partnership to pass conservative measures and maintain Tennessee’s reputation for strong fiscal stewardship.”

Lee’s agenda included the landmark Transportation Modernization Act, historic legislation that will create a new transportation strategy and invest $3.3 billion to accommodate Tennessee’s record growth, address traffic congestion and meet transportation needs across rural and urban communities without raising taxes or taking on debt. 

The roster of budget and legislative priorities also dedicated $250 million to Tennessee’s Rainy Day Fund, bringing totals to an historic $2.05 billion, and included significant investments in tax relief, K-12 education, Tennessee’s skilled workforce and conservation. Notably, Lee led a comprehensive school safety proposal to enhance physical security in public and non-public schools across Tennessee. 

Highlights from Lee’s agenda include the following: 

Transportation & Infrastructure Modernization

• $3 billion to the Transportation Modernization Fund to alleviate urban congestion and fund rural road projects across the state, which includes $750 million allocated to each of Tennessee’s four TDOT regions 
• $300 million to expand the State Aid Program for local road projects, allocating 15 times more funding toward local communities than they receive each year for transportation projects
• Ensures that Tennessee has the resources necessary to meet current and future transportation needs by engaging in Public-Private Partnerships (P3s), Alternative Delivery Models and Electric/Hybrid vehicle fee parity

Economic Opportunity & Tax Relief 

• More than $400 million in tax cuts for Tennessee families and businesses through the Tennessee Works Tax Act, one of the largest tax relief measures in Tennessee history
• $273 million for a one-time, three-month sales tax holiday on grocery items, providing tax relief for Tennessee families
• More than $150 million in annual small business tax relief, including raising the exemption threshold for the business tax, exempting the first $50,000 of net income from excise tax and protecting the first $500,000 in property investment from the franchise tax
• $64 million to simplify tax administration and conform with the federal bonus depreciation provisions of 2017 Tax Cuts & Jobs Act, allowing businesses to more quickly recover costs and further incentivize investment in Tennessee production
• Provides foundation for supporting Tennessee’s continued economic growth, aligning Tennessee with more than 30 states by adopting “single sales factor” apportionment for franchise and excise tax

Skilled Workforce

• Nearly $1 billion to complete the TCAT Master Plan to improve 16 existing TCATs, replace seven outdated facilities and build six brand new TCATs at strategic locations across Tennessee

Enhanced School Safety Measures

• $30 million for more than 100 Homeland Security agents across all 95 counties to serve Tennesseans and students in both public and non-public schools
• $140 million for one full-time, armed School Resource Officer (SRO) for every public school
• $40 million for public school security upgrades
• $14 million for private school security upgrades
• $8 million for additional School-Based Behavioral Health Liaisons across the state
• Enacts a multi-tiered accountability plan to ensure exterior doors are locked while students are present
• Requires that private security guards receive active shooter training prior to being posted at schools 
• Requires every school district to establish threat assessment teams to ensure students are connected to support services and behavioral health professionals when appropriate
• Requires every public and private school to develop annual safety plans, including a newly required incident command drill for school leaders and law enforcement

Great Schools 

• $350 million in additional funding to local education agencies through Tennessee Investment in Student Achievement (TISA)

-Combined with $750 million in the base budget, new recurring state funding for the education formula totals more than $1 billion

-Includes $125 million for teacher pay raises

• Increases the minimum teacher salary to $50,000 by 2026, making Tennessee a top-10 state for teacher pay in the nation, and protects teachers and taxpayers by ensuring school districts no longer collect union dues  
• Includes funding to extend summer learning camps and expand the eligibility age to Kindergarten through 9th grade

Strong & Healthy Families

• $330 million in shared savings under our first-in-the-nation TennCare Medicaid waiver will help provide for the health of mothers and infants in our most vulnerable communities, providing care at no additional burden to Tennessee taxpayers that will:

-Cover the cost of diapers during the first two years of a baby’s life for mothers on TennCare, becoming the first state in the nation to support parents in this way

-Expand TennCare to underserved parents, supporting an extra 8,100 parents each year

-Establish continuous coverage for children, ensuring no lapse in coverage for children for at least a year, which will help an estimated 10,000 children remain enrolled

-Make permanent Tennessee’s post-partum coverage benefit, ensuring a full year of TennCare coverage to support approximately 3,000 new mothers every year

-Adjust TennCare’s income threshold for pregnant women to 250% of the federal poverty level to cover an additional 2,400 new mothers in need every year

• $20 million for Crisis Pregnancy Provider Support Grants to support crisis pregnancy non-profits, improving access to healthcare and information for expecting mothers
• $10.25 million for TN Fosters Hope grant funding to elevate high quality care for children and families impacted by foster care and adoption, allowing providers to expand services to foster and adoptive families
• $29 million to expand programming for children with complex or special needs that face challenges being placed in a traditional foster or adoptive home by further developing the provider network and providing respite and long-term care

Protecting Tennessee Children

• Improves the state’s foster care and adoption process to make foster care, adoption and surrender more child-centered and user-friendly by providing more supports for expecting mothers and foster/adoptive families 
• $5.7 million in supplemental 2022-23 funding to increase provider placements for children in state custody 
• $33 million to increase bed capacity in the Department of Children’s Services (DCS) provider network, reducing the time children and youth spend in offices and children’s homes 
• $15.9 million to align DCS case manager salary with market salary regionally and in the private sector 
• Modernizes the process for storing and recording adoption records within DCS

Safe Neighborhoods

• Adds 100 Highway Patrol Troopers and related support staff and 25 Tennessee Bureau of Investigation Forensic Services staff
• $30 million addition to the TN Law Enforcement Hiring, Training and Recruitment Program (Year 2)
• $50 million expansion of the Violent Crime Intervention Fund
• $357 million for network expansion of the Tennessee Advanced Communication Network (TACN) to transition remaining state agencies into TACN, improve coverage and provide infrastructure grants for local agencies to join TACN

Brighter Future 

• Improve and expand three additional state natural areas, build two new park lodges, complete four more outdoor trails and create four new state parks
• $5.3 million for the Rural Brownfields Investment Act to begin remediation efforts for 175 known brownfield sites, including the creation of a new state-administered grant and technical support program for remediation and economic development of existing brownfields
• $50 million for a Nuclear Fund to recruit companies to our state that will establish a nuclear development and manufacturing ecosystem built for the future of Tennessee

Asset Management

• $1.7 billion to address capital improvements and maintenance, including Tennessee State Parks and TCATs
• Ensures more than $2.6 billion of recurring revenue is allocated to one-time expenditures, allowing the return of these resources for review and budgeting next fiscal year