Monday, July 1, marks enactment of the state’s new budget as Tennessee’s 2019-2020 fiscal year begins.  The new budget provides tax relief, while taking care of the state’s most vulnerable citizens, investing in education, ensuring the safety of the public, and maintaining the fiscal discipline that has earned Tennessee recognition as the best managed state in the nation.

 

“This budget reflects the hopes, dreams, and visions of Tennesseans,” said Senate Finance, Ways, and Means Committee Chairman Bo Watson (R-Hixson).  “For where your treasure is, there your heart will be also.  Eighty percent of our “treasure” is directed to education, health care, human services, transportation and safety/corrections.”

 

Watson said the $38.6 billion balanced budget proposes state government maintains Tennessee’s sound fiscal practices by not taking on any new debt, continuing to reduce unnecessary spending through state government efficiencies, and putting a record investment in the state’s emergency savings account, better known as the Rainy Day Fund.  He said the budget continues to invest heavily in education, including $71 million for teacher pay raises.  It also provides $27.4 million to fund the Katie Beckett program to expand TennCare coverage to in-home care for about 3,000 children with severe and medically complex disabilities whose parents’ incomes exceed current limits set for the program.

 

On tax relief, the new budget appropriates $22 million to cut the professional privilege tax utilizing the online sales tax windfall that resulted from the Supreme Court’s Wayfair decision.  The General Assembly has cut or reduced taxes every year since 2011, saving taxpayers approximately $845 million.  This includes reducing the sales tax on food by nearly 30 percent, phasing out the Hall income tax, eliminating the gift and inheritance taxes, and cutting taxes on manufacturing and small business to enhance job creation.

 

Highlights of the budget include:

 

Sound Financial Practices

• Historic deposit to the Rainy Day Fund of $225 million, bringing the emergency fund to the highest level in state history at $1.1 billion;
• Puts $4.6 million in the state’s pension fund to reduce future liabilities and keep promises to retirees, as well as maintain Tennessee’s status as the least indebted state in the nation per capita; and
• Reserves approximately $15 million to fund future tax relief next year.

 

Education Investments

• Appropriates a total of $11.3 billion in education, including $6.6 billion in K-12 funding;
• Provides $71 million for teacher pay raises;
• Includes $39.4 million to fully fund the state’s Basic Education Program (BEP);
• Includes a total of $40 million for school safety grants for K-12 schools; and
• Provides $8 million to expand the Tennessee Early Intervention Services Program for young children up to age three with learning challenges.

 

Prioritizing Vocational Education

• Includes $25 million for the Governor’s Investment in Vocational Education (GIVE) Initiative  community grants to upgrade and expand K-12 and career and technical education programs in rural areas;
• Provides $4 million to increase access to vocational education for high school students by doubling the dual enrollment credits available;
• Contains $12.3 million for additional needs-based student assistance awards;
• Provides $2 million in grants to enhance rural high school career initiatives; and
• Includes $426,000 recurring and $975,000 non-recurring for the Correctional Education to help inmates obtain employment and reduce recidivism.

 

Improving Healthcare

• Includes $27.34 million to create a Katie Beckett program to help families provide in-home care for some of the state’s most vulnerable children;
• Provides $9.3 million to the Employment and Community First Choices (ECF) program to expand services to help individuals with an intellectual or developmental disability gain as much independence as possible;
• Provides $3.5 million to serve the uninsured in Tennessee through increased funding for community faith-based organizations and federally qualified health clinics which assist the Department of Health in providing services; and
• Includes $11.9 million to continue funding appropriated last year to raise the pay of direct services personnel working with individuals with intellectual and developmental disabilities.

 

Renewed Focus on Mental Health

• Contains $5 million for the state’s Behavioral Health Safety Net to expand services to an additional 7,000 uninsured adults with serious mental illness;
• Provides $3 million for a new Creating Homes Initiative that will provide regional housing facilitators to help those recovering from substance use disorder;
• Provides $4 million for a transportation plan to individuals who are mentally ill or suffering from Alzheimer’s or dementia from being transported by law enforcement officers; and
• Adds $6.2 million to support the state’s four regional mental health institutes.

 

Safer Communities

• Provides $45.1 million for corrections;
• Appropriates $21.5 million to support mental health and substance abuse services;
• Includes $3.3 million to increase the penalties for fentanyl and its derivatives;
• Provides $15.6 million to increase the starting pay for corrections officers and $5.5 million to raise salaries for veterans officers and counselors in the state’s prisons to hire and retain personnel essential to public safety;
• Adds $2.4 million to hire 40 additional state probation and parole officers to reduce the current caseload levels and bring supervision standards in line with industry best practices; and
• Provides $1 million in grants to Men of Valor and Project Return to help keep former offenders on the right path.

 

More information on the budget can be accessed at the General Assembly’s website at the following link.