The House and Senate of the 112th General Assembly on Thursday successfully approved a no-debt $42.6 billion budget that provides strategic investments in education, health care, public safety and economic development initiatives.
The budget provides a return to many pre-pandemic priorities with the 2021-22 fiscal year budget. The 2021-22 fiscal year budget invests $100 million into the Rainy-Day fund, bringing the state’s savings account to $1.55 billion. The budget also sets aside $250 million through the Tennessee Consolidated Retirement System. Tennessee remains on solid financial ground as one of the indebted states in the nation with a AAA bond-rated state rating.
The budget provides $730 million in new spending for education, including the spending from the special session. This includes more than $480 million on K-12 education and more than $240 million on higher education.
The Basic Education Plan (BEP) will be fully funded at approximately $62 million. Tennessee educators will receive $120 million to provide a pay increase in addition to $43 million allocated for teacher salary increases during January’s special session. The budget includes $79 million to address the growing needs of Tennessee Colleges of Applied Technology campuses. The new budget funds $250 million for a Mental Health Trust Fund to provide mental health assistance and support for K-12 students.
Additionally, the budget cuts more than $50 million for a sales tax holiday on grocery sales and prepared foods from July 30-Aug. 5.
The budget also puts a strong emphasis on job creation and rural development with a significant $100 million investment to expand high-speed broadband to underserved Tennessee communities. These funds are in addition to federal coronavirus stimulus money provided for this purpose. In other jobs investments, the budget provides $190 million for Fast Track Infrastructure Grants to add high-quality jobs throughout the state. It also provides $7 million to help support Tennessee entrepreneurs and innovators with promising start-up companies.
Health care is another essential priority for next year’s budget. It provides $37.9 million to fully fund medical inflation in the state’s TennCare program and adds $5 million to further widen the state’s Health Care Safety Net. The Health Care Safety Net focuses on services that help uninsured patients get preventative and disease management care and avoid more costly hospitalizations.
Key budget highlights include:
- $100 million for cities and counties with funds available in July for any non-recurring needs;
- $931 million for capital improvements to keep the state’s infrastructure strong without incurring debt;
- $9.5 million to improve salaries for probation and parole officers to offer competitive pay with other states
- $4.4 million for new agents in TBI;
- $17 million for a new radio communications system, $2.3 million for body cameras and full funding of the salary plan and survey for state troopers;
- $8 million to expand marketing and tourism initiatives
- $145 million for air and rail transportation infrastructure
The FY21-22 budget takes effect July 1, 2021.