Gov. Bill Lee pledges renewed help for everyday expenses in State of the State address

Yahoo

11-02-2025

In his seventh State of the State address on Monday, Gov. Bill Lee pledged to assist Tennesseans with increasingly unaffordable everyday expenses like child care and housing, though his proposed budget includes no direct tax breaks for consumers.
Lee highlighted 2025 as a year of innovation, saying it's time to "think bigger and to think boldly about what's possible."
"If Tennessee has led the nation as a beacon of opportunity, security and freedom, why can't we be the nation's capital of innovation too?" Lee said in his annual address before a joint session of the Tennessee General Assembly, according to prepared remarks. "Somebody is going to determine what the future looks like. That should be Tennessee."
Still, his budget proposal released Monday maintains much of the status quo in Tennessee. Lee's budget proposal, also released Monday, totals $58.4 billion — $2 billion less than last year amid projections of flattening state revenue and waning federal funding.
Lee has proposed no new tax breaks for everyday Tennesseans, a year after pushing through a massive corporate tax refund. The governor's budget does not include funding to repeal the state's grocery tax, which has been proposed in two bills on both sides of the political aisle, or even offer a temporary holiday from the tax.
In his speech from the Tennessee House chamber, Lee noted a "dramatically" different housing market than when he bought his first home, citing skyrocketing home costs in the last four years and increasing mortgage rates.
"Meanwhile, starter home demand is completely outpacing supply. Today, Tennessee is ranked 5th worst in thenation for the loss of starter homes," Lee said. "Our state needs a housing plan that makes this key part of the American Dream possible."
Lee proposed a $60 million Starter Home Revolving Loan Fund, which will provide 0% interest construction loans, in addition to funding a housing tax credit passed in 2024 intended for rural and workforce housing.
Elsewhere, Lee promised to add "tens of thousands" of new day care spots across Tennessee on the heels of a new report that skyrocketing child care costs have raised the average cost at infant child care centers to higher than in-state college tuition.
"That is an insurmountable cost for the vast majority of moms and dads who want to be in the workforce," Lee said. "But hear me clearly – we don't need to start a new government program to solve the child care problem. We need to empower tried and true community partners who know what they're doing and are already making a difference."
It's not yet clear how exactly the Lee administration could accomplish such a dramatic expansion of day care availability in the state, but Lee pledged to invest $11 million in the Boys and Girls Club to serve 7,500 low-income kids across Tennessee. The organization does not serve children under 5.
Lee also said Tennessee will expand the WAGES program, which supplements child care worker salaries based on certain educational requirements, and cover more middle and low-income working families in an existing state subsidized childcare program.
The budget includes $80 million in recurring funds and a one-time $1 billion injection for roads improvement, which comes after transportation officials gave Lee a "sobering" financial outlook at a fall budget hearing. Transportation officials, already facing a significant backlog of improvement projects, said state transportation funding was projected to decrease by about $42 million over the next few years.
Lee's proposal, which will require legislation to accomplish, would divert tax revenue from tire sales to fund the recurring funds.
Lee's budget calls for a $244-million increase for the state's K-12 funding structure that includes schedule pay raises for teachers.
The governor on Monday also took a victory lap on school vouchers, which he successfully advanced through a special session last month after failing to pass the proposal in 2024.
"We innovated our approach to education with new, creative investments in public school facilities, andwe have finally brought universal school choice to Tennessee families,' Lee said. "These pressing issues could not wait, and yet, we still have a lot of work to do in the legislative session before us."
The governor on Monday also touched on agriculture and conservation. Lee plans to take another swing at his proposal to establish a $25 million state Farmland Conservation Fund, plus another $20 million for two additional funds to assist farmers.
It's time that we support family farms like Noble Springs Farm in rural Tennessee, owned by first-generationdairy farmers Dustin and Justyne Noble," Lee said. "Together, they source food for their local community to make a living and help drive our economy, all while teaching their children the value of agribusiness. Our strategy will ensure farms just like theirs can be preserved well into the future."
Lee also aims to direct more than $120 million to the Duck River region. The biodiverse, endangered river as been at the heart of a tug-of-war between conservationists and utilities that draw water from the river. Lee last year signed an executive order aimed at protecting the natural resource.
The state will fund $100 million in "seed money" to kickstart a pipeline plan aimed to bring water into the region and take pressure off the Duck River, Finance and Administration Commissioner Jim Bryson said Monday.
Lee also plans to launch an environmental education institute, a "base camp for environmental learning perfectly situated along the main route to the Great Smoky Mountains National Park. The institute will be named in honor of former Tennessee governer and U.S. Sen. Lamar Alexander, who joined Lee in the House chamber on Monday.
'From the Delta to Appalachia, Tennessee is blessed with natural abundance that we have to protect and preserve for future generations," Lee said. "Yet, we also continue to be one of the fastest-growing states in the nation – in rural and urban areas alike. So, how do we balance record growth with a plan to protect our natural resources? You start by rejecting conventional wisdom that says you cannot do both. To grow Tennessee, we have to conserve Tennessee."
This article originally appeared on Nashville Tennessean: Gov Lee's State of the State address: Tennessee must 'think bigger'