Tennessee Governor Bill Lee delivered his sixth State of the State address on Monday, Feb. 5, 2024, highlighting his budgetary priorities in Tennessee for the fiscal year 2024-2025. The Department of Finance and Administration published the governor’s complete FY24/25 state budget proposal, which is available online here.
In his address, Lee acknowledged the recent efforts of Tennessee Department of Transportation (TDOT) employees, “who were everywhere just a couple weeks ago working day and night through the cold, snow and ice, taking care of Tennesseans, and now they’re everywhere taking care of potholes. You TDOT workers are true public servants, and we thank you.”
Lee also proposed a few initiatives relevant to state employees, including the hiring of an additional 60 state troopers for the Tennessee Highway Patrol, the merger of our Commission on Aging and Disability with the Department of Intellectual and Developmental Disabilities to form a new Department of Disability and Aging under Commissioner Brad Turner, and adding eight new state parks. We will monitor these proposals for any impacts on state workers.
Moving on to the governor’s proposed budget, Lee recommends $49 million for Pay for Performance in executive branch agencies (most state employees). According to the proposed budget document, this amount provides a pool of recurring funding equivalent to a 3.0 percent salary increase for employee compensation adjustments based on performance evaluation. If the legislature approves funding, exact percentages of P4P awards will be announced in the fall based on individual performance. Additionally, Lee proposes $15 million to fund a pool of recurring funds equivalent to a 3.0 percent salary increase for Non-TEAM Act agency employees.
The governor’s proposed budget also recommends funding for a 3.0 percent salary pool for higher education employees. Note: the board of trustees at each higher education institution maintains the authority to use the 3 percent pool toward salary in whatever manner they choose. Also, the salary pool funding is insufficient to fully fund a 3 percent across-the-board raise; additional funds must come from the institution. TSEA is concerned about these obstacles to higher education members’ adjustments and is working to find a more equitable system with the legislature and institutions.
In support of these budget proposals, we will work with your legislators to secure the proposed funding for raises for state and higher education employees and continue fully funding employee benefits and TCRS.
Lee’s proposed budget does not include funding to continue the one-year 401(k) match increase, which has been in place for the last two years after the legislature approved the one-year increase in 2022 and extended the benefit for one year in 2023. TSEA will be working deliberately through the budget process to look for any available funds to increase the match should additional revenue become available, but not at the cost of any improvements already recommended in the budget for state and higher education employees. If funding is not available or approved, your 401(k) will revert to the statutory amount of a $50 match. As a reminder, TSEA’s successfully advanced legislation in 2021 to increase the state’s 401(k) match from $40 to $50. We are committed to advocating for further increases to the 401(k) match in this and following years. Keep in mind, as the legislative session advances, there will likely be a supplemental budget adjustment later, potentially introducing some additional funding into the overall budget picture.
In the coming days, TSEA will attend future budget hearings, meet with your legislators, continue to review the governor’s proposed budget and relay any additional information as it becomes available. We will also publish a list of bills we are watching on our website and in our legislative updates.
Thank you for all you do for Tennessee and for being a member of TSEA!
Photo: Governor Lee during his 2024 State of the State address © 2024 State Photographic Services
