Governor proposes three-months sales tax holiday on food and funds for expansion of the Tweetsie Trail in new budget

Published 1:08 pm Tuesday, February 7, 2023

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Monday, Tennessee Governor Bill Lee delivered his fifth State of the State address and presented budget and legislative priorities for the upcoming year to a joint session of the General Assembly and fellow Tennesseans.
Among his proposals was $268.3M for a one-time three-months sales tax holiday from August 1 to October 31, 2023, providing tax relief for Tennessee families and improvements to TCAT campuses across the state.
Also, the Governor proposed $6.3 million to expand the Tweetsie Trail in Carter County, connecting four communities, two bike parks, and a pedestrian bridge.
“Tennessee is leading the nation as a guiding light for opportunity, security and freedom,” said Lee. “I’m proud to propose a budget and strategic policies that ensure our state continues to be a shining example for educational opportunity, strong families, innovation and economic prosperity.”
Our state’s strong fiscal stewardship places Tennessee in one of the strongest budgetary positions in history and allows for investments to secure continued success. Lee’s proposed $55.6 billion budget includes strategic funding to modernize transportation, ensure economic and educational opportunity, preserve our natural resources, protect children, strengthen families and more.
Notable highlights from Gov. Lee’s FY23-24 agenda include:
Transportation & Infrastructure Modernization
 $3B to the Transportation Modernization Fund to alleviate urban congestion and fund rural road projects across the state
— $750M allocated to each of TN’s four TDOT regions
— $300M to expand the State Aid Program for local road projects
— Proposing new comprehensive legislation centering on Alternative Delivery Models, Public-Private Partnerships, Electric/Hybrid Vehicle Fees
Economic Opportunity & Tax Relief
 $288.3M for a one-time three-months sales tax holiday on food from August 1 to October 31, 2023, providing tax relief for Tennessee families
— Beginning a three-year transition to Single Sales Factor for franchise and excise taxes to improve TN’s ability to compete for jobs and investment
— $64M to simplify tax administration and conform with the federal bonus depreciation provisions of 2017 Tax Cuts & Jobs Act, allowing businesses to more quickly recover costs and further incentivize investment in Tennessee production
— $37.8M for Small Business Excise Tax Relief, establishing a standard deduction from excise tax for up to $50,000 of reported net income, earning taxpayers a maximum of $3,250 in direct savings for Tennessee businesses
— $20.3M for Small Business Franchise Tax Relief that exempts up to $500,000 of property from the franchise tax, giving small- and medium-sized businesses that own property in Tennessee up to $1,250 in tax savings on their annual franchise tax liability
— $7.9M for Small Business Relief from the Business Gross Receipts Tax, increasing the filing threshold for business tax from $10,000 to $100,000 to ensure that only businesses with $100,000 of gross receipts or more will be subject to the business tax. This includes funding to hold local jurisdictions harmless.
— $7.3M to establish a state paid family leave tax credit against franchise and excise tax for a two-year pilot period that will mirror the federal tax credit
Skilled Workforce
 $370.8M to update outdated facilities in seven TCAT campuses state-wide
— $386.2M to invest in new buildings, expansions and improvements to 16 current TCAT campuses
— $147.5M to build six new TCATs to better serve more students across Tennessee
Strong & Healthy Families
 $18.7M to increase the income threshold for pregnant women and caregivers to expand access to TennCare Services
— $5.2M to provide 12-month continuous TennCare eligibility for low-income
— $4.7M to permanently extend postpartum health coverage under TennCare
— $100M for Crisis Pregnancy Provider Support Grants supporting crisis pregnancy centers statewide, improving access to healthcare and information for expecting mothers
— $10.25M for TN Fosters Hope grant funding to elevate high quality care for children and families impacted by foster care and adoption, allowing providers to expand their services to foster and adoptive families
— $27M to expand programming for children with complex or special needs that face challenges being placed in a traditional foster or adoptive home by further developing the provider network and providing respite and long-term care
— $15M to fund the Summer Youth Employment Program to connect youth and young adults ages 14 to 24 with career exploration opportunities and paid work experiences
Protecting Tennessee’s Children
 $33M to increase bed capacity in the Department of Children’s Services (DCS) provider network to reduce the time children and youth spend in offices and children’s homes
— $39.8M to increase the rate of payment for providers in the DCS provider network that offer residential and clinical services to children in state custody
— $7.3M to support foster families and incentivize foster care and adoption of sibling groups and teens
— $15.9M to align DCS case manager salary with market salary regionally and in the private sector
— $11.4M to contract short-term private case managers to alleviate the burden on DCS case managers
— $5M for Juvenile Justice Youth Intervention Partnerships to increase collaboration with community-based partners to support youth stepping down from juvenile facilities
— $31M to replace the Tennessee Family and Child Tracking System (TFACTS), the DCS case management and payment system
Great Schools
 $350M in additional funding to local education agencies through Tennessee Investment in Student Achievement (TISA), including $125M for teacher pay raises
— $60.8M to extend summer learning camps and expand eligibility age from 4th grade to Kindergarten through 9th grade
— $10M for Summer Bus Transportation
— $20M in School Safety Grants to enhance school security
— $29.7M for the TN School Safety Initiative, expanding staffing to place at least one Homeland Security Special Agent in each of the state’s 95 counties to provide threat assessments and collaborate with local law enforcement
— Expanding the Grow Your Own apprenticeship program to help solve teacher shortages, serving 600 new apprenticeship candidates per year
— Five percent salary pool increase for higher education employees to ensure they attract and retain the best employee base possible
Safe Neighborhoods
 Adding 100 Highway Patrol Troopers and related support staff and 25 Tennessee Bureau of Investigation Forensic Services staff
— $30M addition to the TN Law Enforcement Hiring, Training, and Recruitment Program (Year 2)
— $50M expansion of the Violent Crime Intervention Fund
— $357M for network expansion of the Tennessee Advanced Communication Network (TACN) to transition remaining state agencies into TACN, improve coverage and provide infrastructure grants for local agencies to join TACN
— $10M to support successful re-entry by expanding Evidence-Based Programming Grants in prisons and jails with a focus on mental health
Brighter Future
 $66.5M for the Natchez Trace Recreation Area, establishing a sportsman’s themed park with a lodge, cabins, campgrounds and a shooting range
— $28.3M to create Scott’s Gulf State Park, a 9,000-acre park uniting Virgin Falls State Natural Area with surrounding nature areas into a single wilderness park
— $30M to revitalize the Heritage Conservation Trust to support public-private partnerships through a matching grant program
— $15.4M for trail infrastructure and development of the Cumberland Trail
— $10.3M to address critical gaps along the Wolf River Greenway, a 26-mile paved trail meandering from the Mississippi River to Germantown
— $6.3M to expand the Tweetsie Trail in Carter County, connecting four communities, two bike parks and a pedestrian bridge
— $70M to TN Clean Initiative, cleaning up state superfund sites, Oak Ridge and all 47 known dry cleaner sites
— $6.3M for the Rural Brownfields Investment Act to revitalize 175 known brownfield sites, creating a new state-administered grant and technical support program for remediation and economic development of existing brownfields
— $4.7M grant funding to improve local water quality by optimizing wastewater treatment plants, collaborating with agricultural partners to practice best management principles and supporting cities with reduction of nutrients in stormwater
Asset Management
 $1.7B to address capital improvements and maintenance, including Tennessee State Parks and TCATs
 Ensuring more than $2.8B of recurring revenue is allocated to one-time expenditures, allowing the return of these resources for review and budgeting next fiscal year

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