Tennessee governor’s budget plan funds more school vouchers, business tax break, new state parks

NASHVILLE, Tenn. (AP) — As Tennessee’s recent boom years fade with slower tax revenues, Gov. Bill Lee is forging ahead on some big-ticket items in his state budget proposal — among them, a dramatic expansion of taxpayer-funded vouchers to help kids attend private schools, a big tax break for businesses, and growth of state parks and natural areas.

The Republican’s spending plan for fiscal year 2024-2025 clocks in at $52.6 billion, down from this year’s estimated $62.5 billion budget, as state tax revenues have largely flattened and funding under some federal initiatives has dried up. The administration says it has some money at its disposal after deciding to spend about $2.6 billion from year-after-year tax revenues on one-time projects this year, freeing those sources of cash for next year.

Lawmakers in the Tennessee General Assembly, where Republicans hold supermajorities, will take up the budget and make any changes in the coming months.

Here is a look at some key increases in state spending:

FRANCHISE TAX, $1.6 billion: Would include an ongoing $410 million franchise tax break and $1.2 billion in one-time money backfilled into the current year’s budget to give businesses tax refunds, both aimed at avoiding a legal challenge over the state’s current tax

SCHOOL VOUCHERS, $144 million: Would serve up to 20,000 students in the first year, half of them restricted by their family’s income, the other half unrestricted by income level

PUBLIC SCHOOL FUNDING, $261.3 million: Would add to the K-12 education funding formula, including money for incremental raises to teacher pay aimed at reaching $50,000 starting pay by the 2026-2027 school year

PARKS, NATURE, AGRICULTURE, $207.3 million: Various initiatives would include new state parks at Hiwassee Scenic River, Ocoee River, Head of the Crow, Fort Southwest and Cardwell Mountain; a new grant program to support a lake improvement project named for fishing legend Bill Dance; and a farmland conservation fund and an agriculture enterprise fund

RURAL HEALTH, $81.1 million: Includes several items to address health care apprenticeships, training, career pathways, specialty care and technical assistance, the largest of which is $50 million for grants for applicants seeking to improve rural care

RAINY DAY FUND, $20 million: Increases state reserve fund to $2.07 billion

STATE EMPLOYEES PAY HIKE, $49 million: Adds 3% increase to the fund that pays many state employees; more funding is included to give raises to additional state workers

MORE STATE TROOPERS, $17.4 million: Funds 60 new state troopers, supervisors and support staff

SCHOOL FOR FORD PLANT, $3.2 million: Adds year-over-year money for a Tennessee College of Applied Technology at the Ford electric vehicle and battery campus planned for outside of Memphis

SCHOOL MENTAL HEALTH WORKERS, $12 million: Funds more than 100 additional behavioral health liaisons in schools across the state, in addition to grants

BEHAVIORAL HEALTH HOSPITALS, $15 million: Aims to increase access to complex mental health inpatient care

CHILDREN’S HOSPITALS, $10 million: Expands resources in children’s hospitals to care for young patients with behavioral health concerns