Tennessee

On February 9, Tennessee Governor Bill Haslam announced his fiscal 2016 proposed budget of $33.3 billion in total state spending, representing a $349.7 million increase from the prior year. Both K-12 and higher education were his top priorities with total spending for education totaling 47 percent of the general fund, including $170 million more for K-12. The budget reflects $300 million in revenue growth, $500 million in cost increases, and $200 million in reductions (Haslam, 2015).

1. 1. Funding Priorities for P-12 and/or Higher Education

   • • $100 million for increasing teacher salaries through a four percent pool that local education associations will have available as they make decisions on increasing teacher pay;

   • • $44 million to fully fund the Basic Education Program;

   • • $5 million to create the Educators’ Liability Trust Fund to provide liability insurance to teachers at no cost;

   • • $260 million for higher education capital projects;

   • • $25 million to fully fund the Complete College Act formula;

   • • $10 million to fund additional need-based student scholarships;

   • • $2.5 million for state-wide outreach efforts for adult students, technical assistance to local communities finding ways to support adult learners, and a one-stop portal for adults;

   • • $2.5 million for the SAILS (Seamless Alignment and Integrated Learning Support) program, which addresses math remediation for high school seniors;

   • • $1.5 million to fund last dollar scholarships for adults with some post-secondary credit to attend community college;

   • • $1 million to establish competitive grants to two-year and four-year institutions to develop initiatives specifically designed for veterans;

   • • $400,000 to establish the Tennessee Promise Bridge Program to bring first-generation college students to campus prior to fall enrollment; and

   • • $48 million for state employee raises tied to performance and market adjustments (Haslam 2015).

2. 2. Changes to Funding Formula for P-12 and/or Higher Education

   There were no changes to the funding formula for P-12 or higher education.

3. 3. Pressing State Issues Affecting P-12 and/or Higher Education Funding

   The most pressing state issue affecting P-12 and higher education is the 3.5 percent annual cost increase for TennCare, the state’s Medicaid agency. Over the past ten years, TennCare has grown to be more than 30% of the state’s overall budget, which directly impacts other budgetary needs. In December, 2014, Governor Haslam proposed his Insure Tennessee plan, a two-year pilot program to provide health care coverage to Tennesseans who have none or who have limited options. By using Medicaid expansion funding under the Affordable Care Act, the program would be funded without additional state taxes and with no cost to the budget. Insure Tennessee offers two options to individuals aged 21 to 64 who are 138 percent of the federal poverty level: one, a health insurance voucher to participate in their employer’s health insurance plan; and, two, a Healthy Incentives Plan to receive coverage through the TennCare program through Healthy Incentives for Tennesseans accounts (State of Tennessee Newsroom and Media Center 2014). The proposal failed to make it out of the Senate Health Committee in 2015 and is expected to be reconsidered in a special session or the next session of the General Assembly in January, 2016.

1. 4. Exclusive to P-12: Forces Diverting Funds from Traditional Public School Districts and/or Exclusive to Higher Education: Trends in State Funding for Public Institutions

   A primary focus of Governor Haslam’s funding priorities for this fiscal year continues to be the Tennessee Promise plan. In May, 2014, the state legislature passed the governor’s plan, which provides two years of community college or a college of applied technology free of tuition and fees to graduating high school seniors beginning with the class of 2015. A key component of Haslam’s Drive to 55 campaign to increase the percentage of Tennesseans with post-secondary credentials to 55% by the year 2025, any high school senior who graduates from a Tennessee eligible high school or completes a Tennessee home school program can apply for the Promise scholarship (About Tennessee Promise, 2015). This year, of the 65,000 high school seniors in the state, 58,000 applied, more than double...