House and Senate Finance Chairs State Rep. Patsy Hazlewood, R-Signal Mountain, and State Senator Bo Watson, R-Hixson, on Thursday marked the passage of a $52.8 billion budget for the 2024-25 fiscal year.
Officials said, "This year’s budget highlights lawmakers’ continuous efforts to keep taxes low and remain fiscally responsible while prioritizing the needs of Tennesseans. The zero-debt budget is a spending plan that advances Republicans’ efforts to strengthen families, improve public safety, advance education, and create new opportunities for businesses to grow."
Rep. Hazlewood said, “This budget addresses a diverse range of needs across our state while continuing our tradition of good fiscal governance. Crafting this budget was a challenge because we are facing increasing demands due to rising inflation. Tennessee remains a model for economic prosperity because we’ve managed our spending limits and planned well for the future.”
Total legislative initiatives make up nearly $21 million in recurring investments and $141.5 in nonrecurring expenditures. While revenues have slowed considerably, Tennessee continues to be among the most fiscally stable states in the nation with no state income tax and low tax burden overall, it was stated.
Senator Watson said, “After years of unprecedented revenue growth, the state’s revenues have normalized. We’ve tightened our belts and kept recurring expenses low to alleviate future financial burdens. Despite declining revenues, this budget maintains low taxes while also providing services to those in need, particularly disabled and vulnerable populations. Through this budget Tennessee continues to lead the nation in fiscal conservatism, and I am proud of our work.”
The slate of budget and legislative priorities includes significant investments in rural and behavioral health care with $303 million in new dollars directed to 17 programs. These funds will help to expand bed capacity, fund infrastructure projects for children’s hospitals and expand access to behavioral health inpatient care.
The budget adds $261 million in new recurring dollars for K-12 education, bringing the total base Tennessee Investment in Achievement (TISA) budget to $6.8 billion and the overall budget for public education to $8.55 billion. The new dollars will cover medical insurance premiums, retirement for teachers, and funding for teacher raises to bring the annual starting base salary up to $50,000 by 2026.
Among new investments in public safety, are $17 million for 60 new Tennessee State Trooper positions and $750,000 in security grants for houses of worship.
The budget includes a $36 million investment to help distressed counties and rural communities with economic development, such as community asset improvements, marketing and downtown revitalization grants.
It also makes a $100 million deposit in the state’s Rainy-Day Fund, which serves as the state’s savings account to help withstand economic downturns, bringing the fund to a historic balance of more than $2.15 billion.
Tennessee is among the lowest-taxed states in the nation and collects zero income tax. Tennessee holds the highest bond rating issued by all three of the nation’s credit rating agencies, which reflects extreme confidence in the Volunteer State’s preparedness in meeting financial commitments in tough economic times.