Breaking News
More () »

Tennessee Gov. Bill Lee says 2021-2022 budget has passed

The budget totals $42.6 billion and includes investments in literacy, mental health, broadband, and safety.

NASHVILLE, Tenn — UPDATE 4/29/2021 - Tennessee Governor Bill Lee announced the passage of the 2021-2022 fiscal year budget Thursday, following some items being scaled back. (Read more HERE.)

Below is the full news release from the Governor's Office on the budget passage.

Today, Tennessee Governor Bill Lee announced the Fiscal Year 2021-2022 budget has passed through the General Assembly. The budget totals $42.6 billion and includes historic investments in literacy, mental health, broadband, and safety.

“I’m proud that this budget delivers on some of our top promises to Tennesseans and invests in external organizations meeting the needs of our local communities,” said Gov. Lee. “Thank you to the General Assembly for their steadfast commitment to our shared goals and establishing Tennessee as a fiscal leader across the nation.” 

RELATED: Tennessee lawmakers scale back Gov. Bill Lee's sales tax holiday plan 

As a result of fiscal prudence and over $180 million in spending reductions from the state agencies, Tennessee is able to return to pre-pandemic priorities and invest in public-private partnerships.

The budget also includes historic investments in some of the state’s most pressing issues including:

  • $100M to provide high speed broadband to every Tennessean
  • $250 investment in Mental Health Trust Fund
  • $79 million to eliminate the 11,400 person TCAT waiting list
  • $145 million for air and rail transportation infrastructure

“I’d like to thank the General Assembly for their outstanding partnership in passing this historic budget,” Department of Finance and Administration Commissioner Butch Eley said. “I am proud of the way state agencies worked hard to curtail spending, allowing us to make long-term strategic investments in the future of our state. This budget will enable us to maintain Tennessee’s status as one of the best fiscally managed states in the nation.”

The budget includes strategic investments in public-private partnerships, non-profit organizations, and external partners to support Tennesseans’ top priorities without growing government. Those highlights include:

Pro-Life & Pro-Family

  • $500K to Agape Child & Family Services
  • $250K to Families Free, Inc.
  • $3M to Human Coalition
  • $50K to Isaiah 117 House
  • $183K to Psalm 139 Project

Fighting Human Trafficking & Supporting Victims 

  • $3.5M to End Slavery Tennessee
  • $1.2M to Her Song, a Ministry of the Tim Tebow Foundation
  • $600K to Tennessee Anti- Slavery Alliance

Career & Technical Education

  • $1M to Associated Builders and Contractors Greater Tennessee Chapter
  • $150K to Center for Employment Opportunities
  • $40K to Flight Foundation
  • $700K to Niswonger Foundation
  • $478K to Tennessee Builders Education Foundation

K-12 Education

  • $225K to Boys & Girls Clubs of the Clinch Valley – Oak Ridge
  • $200K to Niswonger Foundation

Criminal Justice Reform

  • $600K to Carroll Academy
  • $121K to Lipscomb University, Lipscomb Life Program
  • $250K to Tennessee Higher Education Initiative

Mental Health & Substance Abuse 

  • $150K to Helen Ross McNabb Center
  • $305K to The Jason Foundation
  • $100K to Thistle Farms

The budget returns money to hardworking Tennesseans by including $50 million to provide a week-long sales tax holiday on groceries and prepared food. It does not add new debt and contains the highest reserves in history to prepare for uncertainty, bringing the Rainy-Day Fund to $1.55 billion.

Key FY21-22 budget highlights include:

  • $71M to fully fund the state share of the BEP for K-12 education
  • Four percent raise for teacher salaries
  • $100M to invest in the Rainy-Day Fund
  • $931M for capital maintenance and improvements
  • $5M for the Health Care Safety Net
  • $7M to extend postpartum care for the TennCare population to 12 months
  • $24M for Rural Opportunity Site Grants
  • $100M for local infrastructure grants
  • $30M to eliminate deferred maintenance and improve accessibility at state parks
  • $8M to expand marketing and tourism initiatives
  • $36 million to fully fund the THEC outcomes-based formula
  • $37.9 million to fully fund TennCare growth

The FY21-22 budget takes effect on July 1, 2021.


4/13/2021 - Tuesday, Tennessee Governor Bill Lee announced his amendment to the proposed Fiscal Year 2021-2022 budget.

The amendment includes $580 million in available funds as a result of fiscal prudence. 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 proposal supports Tennesseans by strategically investing in long-term initiatives that will move our state forward,” said Gov. Lee. “I’m especially proud to provide tax cuts to get money back to Tennesseans to encourage them to frequent industries that have been disproportionately and negatively impacted this year.”

This amendment reflects the Governor’s priorities and includes record investments in broadband, economic development, safety and law enforcement, increasing reserves, and education.

“Due to Tennessee’s strong financial leadership, Tennessee has been ranked number one in fiscal stability by US World News & Report in both 2019 and 2020,” said Commissioner of Finance and Administration Butch Eley. “Our prudent and cautious approach has established Tennessee as a leader in fiscal conservatism, and we thank the General Assembly for their partnership in these efforts.”

Notable investments in the FY 21-22 budget amendment include:

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 who are 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 4 high quality, grade aligned books and resources over the summer for the 88,000 rising first graders in Tennessee

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 for total of $300K and $5M non-recurring)
  • $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)


  • $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


  • $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.

Before You Leave, Check This Out