NASHVILLE, Tenn. (AP/CLARKSVILLENOW) Gov. Bill Haslam is proposing a $37 billion annual state budget for Tennessee.

The Republican presented his spending plan to a joint convention of the General Assembly at the state Capitol on Monday.

Lawmakers attending the event were met by hundreds of people protesting President Donald Trump’s policies.

Haslam is proposing the state’s first gas tax hike since 1989 to help boost transportation funding in a state with a more than $10 billion backlog of road and bridge projects.

The governor wants to offset the about $280 million his roads plan would generate with tax cuts in other areas.
Haslam also wants to dedicate $45 million in grants and tax credits to encourage commercial providers to offer broadband internet in rural areas.

Haslam is also proposing $77 million in pay raises and rate adjustments for Tennessee state workers in the upcoming budget year.

The governor informed public employees about his salary proposal in an email before his annual State of the State address at the state Capitol on Monday.

Haslam says the new money for state workers will be distributed based on performance and in the form of market rate adjustments aimed at high-turnover positions in state government.

The governor says his administration has increased state workers’ salaries by 15 percent since he took office in 2011, and added more than $100 million for salary market adjustments.

Haslam’s proposed new spending includes:

—$655 million for building construction and maintenance across state government and higher education.

—$279 million in new road building and maintenance funds generated largely from a hike in the gas and diesel taxes.

—$278 million to cover tax cuts including $55 million to reduce the sales tax on groceries; $102 million to cut corporate taxes for manufacturers; and $60 million to reduce the tax on income from stocks and bonds.

—$230 million for K-12 schools, including $100 million for teacher salaries and $22 million for English language learning programs.

—$214 million to cover increased costs for TennCare, the state’s expanded Medicaid program covering 1.5 million Tennesseans.

—$135 million to give back money taken from the highway fund by previous governors.

—$132 million to bring the state’s rainy day fund budget reserve to all-time high of $800 million.

—$60 million for economic development and jobs training grants.

—$78 million for higher education and the Complete College Act.

—$77 million for state employee pay increases and market rate adjustments.

—$45 million in grants and tax credits over three years to encourage commercial broadband expansion to rural areas.

—$21 million to fund Rural Task Force recommendations.

—$15 million for career and technology education equipment.

—$15 million for the state’s aeronautics economic development fund.

—$12 million to fund substance abuse and crisis intervention treatment and service.

—$8 million to buy a new rescue helicopter and $1.7 million to pay for new fire trucks.

—$3.5 million to hire 27 positions in state prosecutors’ offices and 18 in public defenders’ offices.

—$3.4 million to hire and outfit 25 new Tennessee Highway Patrol troopers.

Copyright 2017 The Associated Press.