Gov. Lee delivers annual State of the State address
Outlines vision to secure Tennessee’s future
(NASHVILLE) January 14, 2025 - This week Governor Bill Lee delivered his seventh State of the State address on Monday evening in a joint session of the General Assembly, where he laid out his 2025 budget priorities. Lee’s proposed $59.5 billion budget includes strategic investments to secure a prosperous future for Tennessee. It prioritizes economic and educational opportunities, infrastructure, protecting communities and preserving Tennessee’s natural resources.
On Tuesday, the Senate Finance Ways and Means Committee was presented with a more detailed overview of Lee’s 2025 budget proposal by Department of Finance and Administration Commissioner Jim Bryson.
Continued Fiscal Responsibility
In his seventh State of the State, Gov. Lee commended the General Assembly for its role in fostering a strong fiscal legacy. He praised the leadership throughout the state for their commitment to sound economic policies. These policies have positioned Tennessee for long term growth and stability. The Governor emphasized how continued partnership with the General Assembly is key to sound fiscal management.
“Government is usually seen as a bureaucratic mess,” said Lee. “But this General Assembly proved everyone wrong and showed what happens when we move, not at a government pace, but at a real world pace.”
Gov. Lee and the General Assembly remain committed to the state’s economic future through fiscal responsibility and promoting economic development. Because tax revenue growth is slowing and leveling out to normal rates after years of record growth, lawmakers and Gov. Lee will work together to carefully plan the best way to be responsible with taxpayer dollars.
Lee’s proposal includes an additional:
$35.6 million investment into the Rainy Day Fund, bringing Tennessee’s reserves to nearly $2.2 billion, the largest in state history
$7 million to expand the Tennessee Youth Employment Program to operate year-round, double its participation, and reach even more underserved communities
$45.8 million for Rural Development Grant Fund to enhance Tennessee’s rural and distressed communities through site development, community asset improvements, strategic planning and downtown revitalization
$25 million for FastTrack grants to recruit new business to Tennessee and support workforce development
$6.3 million to create a statewide Micro-Credentialing Program to develop short-term, targeted certifications that equip Tennesseans with high-demand skills identified by industry and state partners
$25 million to expand the RevV Program to connect private companies with Tennessee’s research institutions to drive research and development and job creation
$5 million to create TN Accelerates, a partnership between Tennessee Economic and Community Development and the Department of Labor and Workforce to create customized workforce training programs tailored to the specific needs of incoming and existing businesses
$5 million for the Tennessee Entertainment Commission to fund incentive grants to strengthen Tennessee’s music and film industry
$10 million for the Rural Grant Opportunity Fund to match funding for at-risk and distressed counties seeking state and federal grants
$10 million for the Small Business Innovation Research and Small Business Technology Transfer Matching Funds to match federal funds assisting Tennessee startups in securing competitive research and development grants
Housing + Infrastructure
$1 billion to the Tennessee Department of Transportation to address the state’s infrastructure needs, including expediting existing road projects and funding new projects across rural and urban Tennessee
$60 million to create the Starter Home Revolving Loan Fund to support construction of new, affordable starter homes for hardworking Tennesseans, prioritizing rural communities
$30 million to fund the Rural and Workforce Housing Tax Credit, making it easier to build homes and businesses
Disaster Relief
On September 27, 2024, Hurricane Helene hit Tennessee. Helene left devastation across Northeast Tennessee. In response, Governor Lee called a special session in January to address the tragedy. During the special legislative session in January 2025, Gov. Lee and the General Assembly appropriated more than $450 million in direct disaster relief as part of a comprehensive plan to support ongoing recovery efforts and allow for proactive preparation for future emergencies. Gov. Lee’s proposed budget includes the following additional investments:
$4 million to implement and maintain a Mesonet system, which will monitor weather-related and flooding threats in the state
$3 million to upgrade TEMA’s regional response vehicles
Education
This budget continues to prioritize education. From infrastructure funding, to passing legislation to empower parents with the freedom to pick the right school for their child, the General Assembly in partnership with Gov. Lee have made historic investments in public education while providing more choice for parents. Gov Lee’s proposed budget includes:
Public Education Investments
$198.4 million for teacher bonuses in recognition of their hard work and dedication and for leading the nation in student achievement and growth
$244 million to strengthen education through the Tennessee Investment in Student Achievement (TISA) formula growth, including teacher pay raises
$62.7 million for K-12 infrastructure and facilities funding
$27.3 million for summer learning programs to support students between school years
$25 million further investment in the Fast Growth Fund, to support fast-growing districts
$17 million for Grade A School Grants
$10 million to provide paid parental leave for Local Educational Agency employees
Expanding Choices for Tennessee Parents
“We innovated our approach to education with new, creative investments in public school facilities, and we have finally brought universal school choice to Tennessee families,” said Lee. “Our budget confirms what I’ve said all along – Tennessee will strive to have the best public schools in the nation and give parents choices in their child’s education, both at the same time.”
In the January special session the General Assembly passed historic legislation to provide Education Freedom Scholarships to empower parents with the freedom to pick the right school for their child and have a say in where their tax dollars are spent – regardless of income or zip code. This school choice initiative invests $145.9 million in Education Freedom Scholarships.
Higher Education
$12 million to create the TennesseeWORKS Scholarship, a new award that will cover every penny of Tennessee Colleges of Applied Technology (TCAT) tuition and fees for all students while relieving the extra cost burden of tools and equipment for those most in-need
$52.8 million to fully fund the outcomes-based funding formula, which may be used for program improvements that assist higher education institutions in meeting outcomes including student progression, degree production, research and service, efficiency metrics, and other measures related to institutional mission
$2.27 million to develop Tennessee Board of Regents’ Center for Workforce Development to expand workforce training for businesses and industries, including specialized onboarding and apprenticeship programs, in partnership with TN Accelerates
$2 million to create a common application system for Tennessee’s community colleges, streamline student transfer, and implement a statewide customer relationship management system to enhance student outreach and support
Strong + Healthy Families
$95.5 million utilizing Shared Savings to enhance long term care services and supports for older adults and people living with disabilities
$41 million to support the Department of Children’s Services (DCS) with placement of children within the provider network
$7.2 million to expand the WAGE$ Program and reduce turnover in Tennessee’s childcare workforce by increasing pay and rewarding greater education
$5.9 million to cover childcare for more working families through an expansion of the Smart Steps Child Care Program and ease the benefits cliff
$24 million to continue a Department of Health pilot program to address unmet dental service needs and increase the number of dentists in Tennessee
$11.8 million to reduce waitlists in the OPTIONS and Senior Nutrition programs
$10.9 million to expand programming at the Boys & Girls Club of Tennessee
$5 million to increase bed capacity at the Middle Tennessee Regional Mental Health Institute
$3 million for a partnership between Department of Children’s Services (DCS) and Department of Disability and Aging (DDA) to provide additional support services for children in DCS care with intellectual and developmental disabilities
Safe Neighborhoods
During the special legislative session in January 2025, Gov. Lee and the General Assembly passed a robust legislative agenda and appropriated $5 million to prepare Tennessee to assist in the implementation of the Trump Administration’s illegal immigration policies. Gov. Lee’s proposed FY25-26 budget includes the following additional public safety investments:
$130 million further investment in the Violent Crime Intervention Fund to support local law enforcement and local jurisdictions through grants to fund evidence-based strategies to improve public safety
$75 million to establish Downtown Public Safety grants to increase public safety in downtown areas with businesses and commercial activity
$38 million in funding for an additional 117 State Troopers and related support staff to improve public safety across the state
$5 million to further expand the Statewide School Resource Officer (SRO) Program Grant, which places SROs in each K-12 public school and public charter school in Tennessee
$3.7 million in funding for an additional 22 TBI positions to support victim services, intelligence analysis, aviation, security, Medicaid fraud enforcement, and administration
$1.3 million in additional funding for Houses of Worship Security Grants
$1 million to expand the school-based behavioral health liaison program, giving students across Tennessee schools important resources and mental health support
Conservation
Governor Lee also emphasized the importance of investing in conservation and proposed:
$100 million to execute a comprehensive regional water resource plan to ensure long-term water needs are met while protecting the ecological health of the Duck River
$52 million to create five new Tennessee State Parks, with the goal of funding a total of eight new state parks by the time Gov. Lee leaves office, setting the Tennessee record for the most state parks created by one administration
$6.2 million to address maintenance needs at Tennessee State Parks, preventing a backlog of deferred maintenance
$40 million for environmental cleanup, including creation of a comprehensive water resource management plan in the Duck River region, state water revolving fund projects and electric grid enhancement
$30 million to aid Tennessee Wildlife Resources Agency’s capital outlay and maintenance needs
Agriculture
$25 million to create a Farmland Conservation Fund
$20 million in additional funding for the Agricultural Enterprise Fund and Agricultural Enhancement Fund, both of which are utilized to aid Tennesseans in creating and expanding agricultural, food and forestry businesses and make long-term strategic investments in rural communities
Energy
In the speech, Gov. Lee made a point to showcase the Nuclear Investments Tennessee is continuing to make. Home to many world renown industry leaders, Tennessee is leading the way in innovation. The investments proposed by Governor Lee in nuclear energy include:
$50 million to create the Small Modular Reactor (SMR) Grant Fund to support Tennessee Valley Authority’s Clinch River Nuclear SMR project to position Tennessee as a leader in next-generation nuclear energy
$10 million further investment in the Nuclear Energy Fund to attract advanced nuclear technology companies
$2.6 million to develop the nation’s first regulatory framework for commercial nuclear fusion power
$10 million further investment in Governor’s Investment in Vocational Education (GIVE) to support nuclear workforce education, as recommended by the Nuclear Energy Advisory Council
$20 million for the Federal Grant Matching Fund, to support proposals from Tennessee universities and businesses applying for research funding from federal agencies like the National Science Foundation and Department of Energy
Lawmakers continue efforts to combat human trafficking and protect victims
For over a decade, Tennessee has been a leader in recognizing and protecting victims of human trafficking. This week, Senators advanced two measures to continue their efforts.
Ink of Hope Act
The Senate Commerce and Labor Committee unanimously passed Senate Bill 171 aimed at combating human trafficking through awareness and training within the tattoo industry. Sponsored by Senator Becky Massey (R-Knoxville), the Ink of Hope Act would require tattoo artists to receive training on recognizing and reporting the signs of human trafficking as a part of their licensing requirements.
In the committee on Tuesday, Sen. Massey emphasized the importance of the issue, noting that sex trafficking is the second fastest-growing criminal industry.
SB 171 now advances to the Senate floor for a final vote.
Designating January as Human Trafficking Awareness Month
Another measure aimed at human trafficking advanced this week in the Senate Judiciary Committee. Sponsored by Senate Majority Leader Jack Johnson (R-Franklin), Senate Joint Resolution 15 establishes January as “Human Awareness Trafficking Month”. The resolution recognizes that human trafficking exists in every community across the state, and action must be taken to stop it.
“Human trafficking is a scourge on our society,” said Johnson. “Every child who is a victim of human trafficking is a tragedy, and unfortunately, there are estimates that 300,000 children have been lost in our society that cannot be found or identified. This is a devastating number. We want to do everything we can to raise awareness of this heinous crime and protect victims.”
In 2011, the Tennessee Bureau of Investigation (TBI) issued a groundbreaking report detailing the scope of human trafficking across the state. As a result of legislation passed in 2023, the TBI now makes annual reports to the General Assembly on the issue, ensuring lawmakers remain informed and proactive in addressing this crisis.
Since 2011, the General Assembly has passed a series of laws to crack down on traffickers and strengthen protection for victims. These legislative efforts earned Tennessee Shared Hope International’s highest ranking in the nation for fighting human trafficking in 2017, 2018, 2019, and 2023.
Through strong policies, continued vigilance, and bipartisan commitment, Tennessee remains a national leader in the fight against human trafficking.
Legislation to enhance armed guard certification proposed
In an effort to further enhance safety in Tennessee, Senate Finance Chair Bo Watson (R-Hixson) filed legislation to create a new classification for private protective services in Tennessee. Senate Bill 1384 creates an enhanced armed guard certification that allows qualifying candidates to carry a rifle-caliber weapon.
"This legislation ensures that highly trained security professionals have the appropriate tools to effectively protect people and property,” said Watson. “By creating this enhanced certification, we are strengthening safety measures and giving businesses greater confidence in their security personnel."
Eligible candidates must be registered with the Tennessee Department of Commerce and Insurance and meet several other requirements, including:
Have a minimum of five years of experience as a full-time law enforcement officer or a minimum of four years of service as a full-time member of the United States Armed Forces.
Be retired or separated and in good standing or have received an honorable discharge
Submit to and pass a criminal background check and psychological evaluation
Complete and pass a 16-hour training course and written examination.
Hurricane Helene Update
Tennessee Department of Transportation (TDOT) Commissioner Butch Eley, alongside regional TDOT directors, updated the Senate Transportation and Safety Committee this week on the department’s efforts to address the widespread destruction caused by Hurricane Helene in Northeast Tennessee. The storm resulted in significant damage, crippling vital infrastructure by shutting down numerous bridges and roads, including major sections of I-26 and I-40. While I-26 has reopened with one lane of traffic in each direction, I-40 remains under construction. In the aftermath, 49 roads were closed, 13 bridges were completely lost, over 500 bridges sustained damage, and 278 state routes and interstate bridges required evaluation.
TDOT acted swiftly, inspecting all 278 state routes and bridges and successfully reopening 42 out of 49 closed roads within a week of the disaster. The remaining 7 roads have been contracted out for repairs, which are already underway.
“Our team had people running into the water to save people,” said Commissioner Eley. “We had people whose family and businesses were impacted. They were so devoted that they did whatever it took to serve the people of Tennessee. I am so proud of the way this team reacted.”
The total cost of the damage to Tennessee from Hurricane Helene stands at $510 million. Thanks to Tennessee’s strong fiscal management over the years, the process of allocating recovery funds has been swift and efficient. Additionally, federal aid has been flowing in, with more anticipated to support ongoing recovery efforts. So far, Tennessee has received over $100 million in total federal transportation aid with an application pending for an additional $178 million.
In Brief…
Gov. Lee signs Education Freedom Act into law - Gov. Bill Lee was joined by lawmakers, students and school choice advocates on Feb. 12 to sign the Education Freedom Act of 2025 into law. Families across the Volunteer State will now have the freedom to choose the education that best fits the needs of their children beginning in the 2025-26 school year. The General Assembly approved the new law during a special session in late January.
Air Ambulance Reimbursements - The Senate Health Committee advanced legislation this week to improve services and funding for air ambulance providers, which are largely located in rural Tennessee. Sponsored by Senator Paul Bailey (R-Sparta), Senate Bill 138 ensures that TennCare reimburses air ambulance services which have a base in Tennessee at a rate no less than 67.5 percent of the federal Medicare’s allowable charge for participating providers. Currently, air medical providers lack control over the demand for their services and the mix of payers in need. SB 138 addresses this issue by establishing a more stable reimbursement structure, helping to sustain these critical emergency services for Tennesseans. The bill passed the Judiciary Committee with a 9-0 vote and now moves to the Finance Committee for further consideration.
Manufactured Home Definition Updates - Freshman Senator Tom Hatcher (R-Maryville) received unanimous approval on his first ever bill presented in the Tennessee Senate this week. The Senate Commerce and Labor Committee advanced Senate Bill 119, sponsored by Hatcher, to align the state’s definition of manufactured home with federal standards. The legislation ensures that any future changes to the federal definition will automatically update in the Tennessee Code Annotated (TCA), preventing inconsistencies and reducing the need for repeated legislative adjustments. Since state agencies already adhere to federal regulations, SB 119 streamlines the legal framework, improving clarity and consistency across regulatory practices.
Surgical Assistant Credentialing - The Senate Commerce and Labor Committee has unanimously approved Senate Bill 174, a measure aimed at strengthening the healthcare workforce and streamlining the registration process in Tennessee for qualified surgical assistants. Sponsored by Senator Becky Massey (R-Knoxville), the legislation updates state law to ensure that applicants with current credentials from the American Board of Surgical Assistants can be registered as surgical assistants by the Board of Medical Examiners, provided they meet all necessary requirements. The bill helps to address workforce concerns, improve patient care, and reflects the evolving needs of the medical industry. With unanimous committee approval, it now moves to the Senate floor for a final vote.
Four Chaplains Day – The Senate approved a resolution this week to designate the first Sunday in February as Four Chaplains Day to recognize and honor the sacrifice of four U.S. Army chaplains during World War II. These chaplains died while saving others during the War. The measure Senate Joint Resolution 7 is sponsored by Senate Majority Leader Jack Johson (R-Franklin).
Efforts to curb opioid abuse show promising results – The Senate Health and Welfare Committee heard an update from the Billion Pill Pledge Program which recently launched in Tennessee and is already showing tangible results. The program targets key entry points for prescription opioids in communities, aiming to significantly reduce opioid use nationwide. Tennessee faces a high rate of opioid prescriptions with 58.6 prescriptions per 100 residents, which ranks Tennessee 46th in the nation. However, within just six months, the program has assisted more than 240 patients, achieving a 40% reduction in opioid use during this period. These outcomes underscore the program’s potential to drive positive change in both public health and economic costs related to opioid addiction. The initiative aligns with Tennessee’s broader strategy to combat the opioid crisis, complementing legislative efforts that have been in place since 2018. Over the years, the General Assembly has passed critical laws to limit opioid prescriptions and improve access to addiction treatment, demonstrating Tennessee’s continued commitment to tackling the opioid epidemic head-on.
State offices will be closed Monday, Feb. 17 to observe Presidents Day.
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