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Gov. Lee’s budget amendment includes tax holidays, investments in mental health, education and economic development

The state budget is the central focus in the last remaining weeks of the first session of the 112th General Assembly as committees begin to complete their business for year. Gov. Bill Lee this week announced his amendment to the proposed 2021-22 fiscal year budget which includes $580 million in available funds. These funds will be invested in strategic long-term projects that focus on a return to pre-pandemic priorities and deliver critical services while not growing government. The budget amendment also includes nearly $100 million for a two-week sales tax holiday on all grocery sales, purchases at restaurants, and all prepared food. 

This amendment includes record investments in broadband, economic development, safety and law enforcement, increasing reserves, and education.  

A key provision of the budget amendment is a $250 million investment in a Mental Health Trust Fund to assist K-12 families who are facing significant mental health issues in the wake of COVID-19. This proposal creates strong mental health services for school-aged students through a systemwide, evidence-based approach.

Gov. Lee’s budget amendment includes:   

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 Tax Cuts 

  • $25M for a two-week sales tax holiday for groceries 
  • $75M for a two-week sales tax holiday for restaurants and all prepared food 
  • $16M to reduce the professional privilege tax by 25 percent

K-12 Education and Mental Health 

  • $250M trust fund to assist K-12 families facing significant mental health issues in the wake of Covid-19 
  • $18.5M to transportation to students for summer learning  
  • $2M to provide an additional grade aligned books and resources over the summer for 88,000 rising first graders

Higher Education 

  • $79M to eliminate current TCAT waitlists statewide, currently at 11,400 students 
  • $25M to Tennessee Promise to permit increases in the Hope Scholarship  
  • $4M to increase Agriculture Extension Agents at University of Tennessee and Tennessee State University  

Rural & Agriculture  

  • $50K to support the state fair (in addition to the $250,000 recurring in originally proposed budget)
  •  $3M to provide additional funding for rural projects as part of the Rural Economic Opportunity Fund (in addition to $21M in originally proposed budget for total of $24M)   

Safety 

  • $500K to provide gun safety programming for children  
  • $17M to replace radios for state troopers   
  • $18M to improve the statewide disaster communications system  
  • $680K to add 4 new Homeland Security Agents  

Economic Development 

  • $5M to provide grants to restore and preserve historic downtowns across the state  
  • $3M to increase employment in Tennessee through the Small Business Innovation program 

Transportation 

$3M recurring and an additional $10M nonrecurring to provide additional direct funding to airports across Tennessee through the Transportation Equity Fund (total $50M investment in air infrastructure) 

To view the full budget amendment, click here.

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