Tennessee lawmakers pass $56.2B budget for 2024. Here’s what’s in the spending plan.
Tennessee lawmakers approved a $56.2 billion state operating budget for the 2024 fiscal year on Thursday, with a record investment on road projects, and landmark spending on sports and entertainment facilities, school resource officers, and facility improvement projects at the state’s Colleges of Applied Technology.
Lawmakers passed budget bills on Wednesday and Thursday, with wide bipartisan support. Just five House Democrats voted against it, and the Senate passed the budget unanimously.
Earlier this year, Gov. Bill Lee proposed a $55.6 billion budget, slightly less than last year as federal pandemic relief money is set to expire. The spending plan grew by $600 million before being passed.
Amid budget negotiations, lawmakers pushed back on several funding proposals pitched by the Lee administration, slashing the governor's proposal to give $100 million in state-funded grants to pregnancy resource centers to $20 million. Lee previously sat on the board of a crisis pregnancy center in Nashville and supported efforts to make Tennessee's laws prohibiting abortion among the strictest in the nation.
During Senate discussion on Thursday, Senate Majority Leader Jack Johnson, R-Franklin, heralded the 2024 budget proposal as “responsible, conservative governance,” noting that it does not raise taxes or take on new debt, and adds $250 million in new dollars to the state’s rainy day fund.
But Sen. Jeff Yarbro, D-Nashville, criticized the trend in recent years of rolling over billions in surplus revenue by making significant swaths of the budget non-recurring as not the most effective way to maximize taxpayer dollars.
“Using more of your regular recurring income for one-time projects – that’s usually not the soundest way to manage an operation,” Yarbro said, noting that amid billions in state budget surplus this year, the legislature approved what he described as a “standard fare” salary increase for teachers.
“If we chose to just keep back $1.5 billion of the recurring surplus and put the other billion into education – that would still be one of the largest recurring surpluses held over in the state’s history – but what we would achieve in the meantime is we would get out of the bottom 10 [states in the U.S.] in education funding,” he said.
Here are some key spending items that made the final spending plan:
$3.3B for road projects
Lawmakers funded Lee’s pitch to spend a landmark $3.3 billion in one-time money toward the state’s $26 billion backlog of unfunded road projects across the state. Funding will accompany state authorization to pursue privately managed, tolled option lanes in congested areas. Of the total, $3 billion will be divided evenly between the Department of Transportation’s four regions, with $750 million going to each. The remaining $350 million will go to the state’s aid program for local road projects.
$140M for public school resource officers
In the wake of the deadly Covenant shooting, Lee proposed the state fund a full-time armed school resource officer in each public school, and make state funds available for private schools to hire SROs. Lawmakers approved a total of $140 million for school resource officers for public schools, amounting to $75,000 per officer, and another $7 million for a grant program to offer state funding for school resource officers in private schools. Another $8 million will go to expand behavioral health offerings.
$350M for Memphis sports facilities
Lawmakers approved a one-time $350 million tourism-related infrastructure grant for the city of Memphis to go toward funding renovations at FedExForum and Simmons Bank Liberty Stadium, with an aim at securing a long-term commitment from the Grizzlies and help push the University of Memphis into a Power 5 conference for football.
$200M for Tennessee Performing Arts Center
The Lee administration proposed the funding to cover relocating the Tennessee Performing Arts Center, currently located in downtown Nashville. Last year, Nashville Mayor John Cooper suggested the facility could move into his proposed East Bank development, as part of a revamp with a new Tennessee Titans stadium. The budget includes $200 million for TPAC, subject to a 20% match by the corporation. Lawmakers indicated in the budget bill that they intend to approve another $300 million for TPAC in next year's budget.
$1.1B funding increase for Tennessee’s new K-12 education funding formula
Lawmakers approved $750 million to fully fund the base allotment for the state’s new K-12 education funding formula, known as the Tennessee Investment in Student Achievement Act, which the legislature passed last year to replace the Basic Education Program. They also approved an additional $350 million toward the new funding structure.
$45.8 million in business tax cuts
Lawmakers approved a $37.8 million excise tax reduction, excluding the first $50,000 in net income from small businesses, impacting about 23,000 small- and medium-sized businesses statewide. Lawmakers also approved an increase in the exemption for small businesses to $100,000 in net income — a $8 million tax cut for small businesses.
$288 million in grocery tax cuts in three-month holiday
Tennesseans will not pay state grocery sales taxes in August, September, and October this year, as lawmakers in both chambers approved a tax break proposed by Lee with bipartisan support. It’s projected to cost the state $288 million in sales tax revenue, resulting in an average of about $100 in tax savings per family.
Tennessee is one of 13 states that still imposes sales tax on groceries, and has the sixth-highest grocery sales tax in the nation: a 4% state tax in addition to local sales taxes, and lawmakers did not consider a tax rate cut, citing national economic concerns.
$987.8M for capital improvements at Colleges of Applied Technology
At Lee’s request, lawmakers approved $987.8 million to fund six new Colleges of Applied Technology campuses as well as capital improvements at existing TCAT facilities across the state. Of that, $370.8 million will go to update outdated facilities in seven TCAT campuses, $386.2 million will fund new buildings and expansions at 16 existing TCAT campuses.
25 new TBI forensic positions
Tennessee Bureau of Investigations’ evidence processing times for sexual assault kits sparked public outrage after a nearly 12-month delay processing evidence that implicated the suspect in Memphis mother Eliza Fletcher’s murder last fall in a previous crime. In response, lawmakers included funding in the budget for 25 new forensic positions at the TBI with an aim at reducing evidence processing times. That will add to another 25 positions funded last year.
$2 million to audit Tennessee State University
Lawmakers approved $2 million in one-time funding for an audit of Tennessee State University to be conducted by an independent firm.
A State Comptroller report last year found that decisions made by university leadership led to a spike in enrollment which led to a housing crisis, and recommended lawmakers vacate and restructure the school’s board of trustees.
But the additional money for another audit is drawing criticism from TSU supporters, who say the historically Black college has undergone multiple audits already.
“The legislature’s willingness to waste $2 million in taxpayer dollars on yet another audit of the state’s only public historically Black university is another infuriating example of the Republican supermajority bullying minorities in this state," the Rev. J. Lawrence Turner, chair of the Steering Committee of African American Clergy Collective of Tennessee, said in a statement.
$288M for new state parks, natural areas
Lawmakers approved $288 million in one-time capital funding for the Tennessee Department of Environment and Conservation to create four new state parks, and improvements for three existing state natural areas. Funding will go to establish Scott’s Gulf Wilderness Park in the Cumberland Plateau, Middle Fork Bottoms State Park in Madison County, Devil’s Backbone State Park near Hohenwald, and North Chickamauga Creek State Park in southeast Tennessee. Lawmakers also approved funding for improvements at three existing State Natural Areas, one State Park, and funding for renovate lodges at Henry Horton State Park and Natchez Trace State Park.
Democrats push back
Lawmakers took up budget bills and throttled toward adjournment amid repeated demonstrations at the state Capitol for new policies restricting access to guns. During discussion on the spending bills, several Democrats criticized the legislature for not including funding for more gun-control policies.
Rep. Justin Jones, D-Nashville, who was expelled from the House after breaking chamber rules and leading a gun-reform protest, said new funding for school resource officers will not address the root cause.
“That’s not what Tennesseans are asking for," Jones said of the SRO funding item. "They're asking for meaningful gun legislation.”
Senate Minority Leader Raumesh Akbari, D-Memphis, voiced support for the budget as a whole, but mirrored Jones’ comments as the chamber took up the bill on Thursday.
“I only wish that we could have had some sort of meaningful gun reform that could have been funded in this budget,” Akbari said, saying Senate Democrats are ready to work toward reform in the coming months.
Other Senate Democrats voiced support for the budget, but said the state should do more to relieve Tennesseans’ financial stress by expanding Medicaid and offering permanent grocery tax cuts instead of a temporary holiday.
“This budget is delivering millions to corporations, while working families are going to get about $15 a month off their grocery bill,” said Sen. Heidi Campbell, D-Nashville, noting that more than 50% of Tennesseans are experiencing some kind of financial stress.
“I would love to have seen that permanent tax cut to go to our working families,” Sen. Charlane Oliver, D-Nashville, agreed.
Other notable funding items:
$18.5 million in one-time grant funds for volunteer fire departments, rescue squads, EMS providers and inclusion parks for the intellectual and developmentally disabled
142 new Tennessee Highway Patrol troopers and related support staff
$30 million to the state’s Law Enforcement Hiring, Training and Recruitment program
$50 million to expand the Violent Crime Intervention Fund.
$5 million for state museums and cultural facilities
$11 million to the Department of Children’s Services to increase private provider case management
$12 million toward pay raises for legislative and fiscal review support staff
$900,000 to establish grant program to support worker’s compensation for firefighters diagnosed with PTSD related to their work
Reach Vivian Jones at vjones@tennessean.com.
This article originally appeared on Nashville Tennessean: Tennessee lawmakers pass $56.2B spending plan for 2024. Here’s what’s in it.
