Entering his second year in office, Gov. Bill Lee is proposing major investments in Tennessee's education system, new mental health programs, pay raises for teachers and state employees, and a push to send millions of tax dollars back to local communities.

In his second annual State of the State address, the governor Monday night outlined his vision for the state, which includes creating a new $250 million endowment to address mental health in K-12 education and a record-setting $117 million investment in teacher salary increases.

By and large, the announcements were met with bipartisan praise during Lee's nearly 50-minute speech before the General Assembly, the public and others. But early indications signal a few potential uphill battles for the governor.

Overall, the mood inside the House chamber was jovial, with Republicans praising Lee's assessment and vision for Tennessee. Democrats later criticized the governor for doing too little, too late on issues like education funding and criminal justice reform.

With a proposed $40.8 billion budget, Lee's most significant plans for the year include notable increases in public school teacher pay and the creation of the new endowment fund.

“No teacher I know does it only for the money, but you and I know a worker is worthy of their pay,” Lee said. “Teaching is a calling.”

This year, the $117 million proposed for teacher pay raises amounts to the largest increase for teacher salaries in state history.

If approved, that will move the average starting salary for Tennessee teachers from $36,000 a year to around $38,000, followed by another bump up to $40,000 the following budget year, Lee said. Other teachers would receive 4% raises.

Last year, the governor proposed around $70 million in increases to teacher pay.

Most of the governor's education announcements were met with applause, including from Education Commissioner Penny Schwinn, who enthusiastically led the way. Schwinn frequently jumped to her feet while clapping and nodding her head.

Citing a rising youth suicide rate, Lee announced multiple efforts to provide resources to assist schools with behavioral health issues.

That includes the unprecedented $250 million investment in a newly created K-12 Mental Health Trust Fund, which will be overseen by the state treasurer and is expected to grow in size over time. Lee said the state will also solicit private donations for the fund.

In the next year, the Department of Mental Health will also receive funding to expand its behavioral health liaison program for schools in 36 counties to all 95.

MOBILE USERS: Listen to our analysis of the State of the State on the latest episode of Grand Divisions

Lee wants to put more money into training new, current teachers

Lee also wants to address Tennessee’s poor childhood literacy rate, including introducing legislation to create new teacher training standards and investing $70 million to do so.

As part of his goal to make teaching in Tennessee a “more attractive profession for young people,” Lee wants to set aside $8.5 million to start the Governor’s Teaching Fellowship to provide a college scholarships to at least 1,000 students. The program will be carried out “in conjunction with Tennessee Promise,” an initiative created under former Gov. Bill Haslam that covers two years of tuition at community and technical colleges.

The new Tennessee Teacher and Leader Institute, a teacher preparation program Lee plans to launch, will seek proposals from across the country, he said, on how to “build the best educator preparation program in the nation.”

“Make no mistake,” Lee said. “We will do whatever it takes to make Tennessee the best state in America to be a student, and that means making Tennessee the best state in America to be a teacher.”

Governor calls for boost to health care safety net

In addition to the education proposals, Lee outlined several health care-related plans in his speech, including bolstering safety net programs to help children and uninsured adults.

"Solving our health care challenges requires more than just increased funding — we have to be innovative and thoughtful as well," he said, calling attention to the state's ongoing effort to secure a federal Medicaid block grant.

"While we do not yet know whether this proposal will be accepted, I am confident that what we’ve proposed would be a good deal for Tennesseans and that no Tennessean would be worse off if it is approved."

Lee, who is also calling for expanding dental services and the state's insurance coverage for new mothers, is strictly opposed to expanding Medicaid under the Affordable Care Act.

And while some of his health care proposals could prove popular on both sides of the political aisle, Lee touched on one of his most controversial ideas yet: a forthcoming abortion bill announced last month.

"I’ve proposed legislation that would defend and protect the life of an unborn baby from the time their heartbeat can be detected," he said.

After announcing his proposal, which has few details so far, the governor faced pushback from Democrats and questions about whether some Republicans will withdraw support for the plan since no bill language has yet been filed.

Although he was largely met with praise from his fellow Republicans, Lee's brief reference to his decision to offer 12 weeks of paid family leave for state employees was among the most notable moments of the evening. When he broached the subject, a number of GOP lawmakers remained seated as others rose to applause.

Despite the apparent apathy toward the idea, top Republicans said afterward they remain confident about the overall vision Lee has for the year.

Lt. Gov. Randy McNally, R-Oak Ridge, hailed the governor's plans, calling them comprehensive.

"It's a very excellent way to spend the taxpayer's money," he said, calling Lee's proposed budget an ambitious one that the legislature will embrace.

House Republican caucus chairman Jeremy Faison, R-Cosby, also offered praise. "The governor gave us a great platform tonight," he said.

House Speaker Cameron Sexton, R-Crossville, noted the family leave issue is an aspect that lawmakers have unanswered questions about.

"We're going to sit down and take a look at it as a whole and see where we're at," Sexton said.

Democrats' response to Lee

In a response speech afterward attended by a handful of Democratic lawmakers, Senate Minority Leader Jeff Yarbro, D-Nashville, said he was "encouraged" to see Lee's focus on "kitchen table issues" like education and health care.

"There were a number of initiatives that could do some good," Yarbro said, adding that Democrats had been putting forth their own proposals on them for years.

He said Lee's new "modest" education investments should not be a one-time budget item, but should be part of a multi-year effort to continue funding Tennessee schools. Yarbro also noted a lack of details on the governor's criminal justice reform plans.

"On many issues, Tennessee needs far more than the incremental steps the governor put forth tonight," Yarbro said.

'I see you,' governor tells Tennesseans

Lee, who has remained popular despite ongoing opposition from Democrats and recent criticism from some Republicans over his decision to continue resettling refugees, sought to reassure those in the state he is working on their behalf.

"If I could say one thing to my fellow Tennesseans as I enter my second year as governor, it would be this: I see you," he said.

Throughout his speech, Lee reflected on a host of accomplishments during his first year in office. He highlighted the creation of his controversial Education Savings Account program and investments in broadband and the state's reserve fund.

He also stressed the need to remain focused on Tennesseans living in the state's rural areas.

He acknowledged mayors from the state's 15 economically distressed counties, who were in the audience Monday night.

"This year, we plan to do even more for rural Tennessee," he said, highlighting a host of proposed multimillion-dollar investments, including providing more money to rural health clinics and an agriculture enhancement program.

In addition to focusing on rural areas, Lee's budget calls for making $100 million available to be split between counties and municipalities.

House Majority Leader William Lamberth, R-Portland, called the investment a "game-changer."

Lee continues call for criminal justice reform

As he has frequently done since entering office, Lee called for Tennessee to push criminal justice reform.

Ahead of Monday's speech, the administration met with legislative leadership specifically to discuss criminal justice proposals.

And while he continued to highlight the idea Monday, he provided few details about such reforms. Instead, he said the state should expand recovery courts, utilize community supervision and revamp occupational licensing for those leaving prison.

Lee's criminal justice pushes have not included major proposals seen in other states, such as Mississippi, which eliminated mandatory minimum sentences and placed less of an emphasis on technical violations that put offenders on parole back in prison for small infractions.

Likewise, among its criminal justice changes in recent years, Louisiana expanded probation and drug court eligibility, including for some first-time violent offenders.

Lee, who has called for the state to "empty our jails," took a measured approach Monday, saying, "By drawing upon evidence-based best practices, we are confident that outcomes for those on community supervision will improve, and our communities will be safer."

Push to help ease Real ID crunch

Among the other challenges the state faces, Lee called attention to the need to hire more employees to process the applications of thousands of Tennesseans looking to get their driver's license, an issue that has plagued the state in recent months.

He also used his speech to call for cutting the state's professional privilege tax, an annual $400 fee paid by doctors, lawyers, lobbyists and others. The tax cut would result in the state losing $40 million.

Beyond providing an overview of his proposals for the year, Lee noted the historic nature of the 2020 legislative session, which comes 100 years after Tennessee approved the 19th Amendment to the U.S. Constitution, which gave women the right to vote.

"In this very chamber, the course of American history was changed," he said, calling for lawmakers to stand up for their convictions as they work to address the state's needs.

"May we pursue the challenges before us with grace, humility and courage," he concluded.

Reach Natalie Allison at nallison@tennessean.com. Follow her on Twitter at @natalie_allison.

Reach Joel Ebert at jebert@tennessean.com or 615-772-1681 and on Twitter @joelebert29.

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