Think Tank Says Gov. Lee's Budget Reaches "Unprecedented" Spending Levels

Advocate Andy

Sycamore Institute analysis shows state spending at an all-time high

A nonpartisan, nonprofit research group known as the Sycamore Institute released an analysis of Tennessee Gov. Bill Lee's proposed 2022-23 state budget and says it raises spending to "unprecedented" levels.

Among the highlights of the $52.5 billion proposal are:

The governor’s FY 2023 recommendation is 2.5% (or $1.3 billion) higher than current fiscal year estimates. State spending is 19.9% (or $4.4 billion) higher.

The largest recipient of new investment is K-12 education - with a total of $1 billion in new money being used this year for CTE programs and to improve facilities.

Sycamore said of the budget:

"The FY 2023 recommended budget includes unprecedented new spending levels fueled by multiple years of significantly better-than-expected state revenue collections."

New spending connected to revenue growth

The Lee administration now expects to collect $2.9 billion more revenue this fiscal year than originally estimated – plus another $372 million next year. This explains the significant jump in state spending - that is, the state has a significant revenue surplus and plans to spend some of it in the upcoming budget cycle.

As Sycamore notes, the state will also add to the rainy day fund:

"The two main rainy day reserves combined would total $2.6 billion in FY 2023 and cover about 47 days of General Fund operations."

Where's all the money coming from?

State dollars in the recommended budget total $26.4 billion, an increase of 19.9% (or $4.4 billion) from the current year. State taxes come mostly from sales tax (47%) and taxes on businesses (15%).

In short, the state has been collecting more sales tax revenue than expected. This budget, then, reflects both one-time and recurring expenses of surplus funds.

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Andy Spears is a middle Tennessee writer and policy advocate. He reports on news around public policy issues - education, health care, consumer protection, and more.

Nashville, TN
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