Gov. Bill Lee delivered his annual State of the State address Monday night, leading with a push for “innovation” to a joint assembly of the Tennessee Senate and House of Representatives.
The governor briefly touched on last month’s swift special session victories, from his divisive voucher legislation to an immigration crackdown and disaster relief funding for parts of East Tennessee affected by Hurricane Helene.
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Among the most notable lines of the night was Lee’s push for a plan for housing in the state. Recognizing continued population growth as a “point of pride,” he also characterized it as “a call to action" and proposed a $60 million "self-sustaining" Starter Home Revolving Loan Fund, which will provide 0 percent interest construction loans for new single-family homes. He also announced funding for affordable housing through the Rural and Workforce Housing Tax Credit, passed in the previous legislative session.
“Whether you’re born in Tennessee or choose to move to Tennessee, we want you to stay in Tennessee,” Lee said. “Our state needs a housing plan that makes this key part of the American Dream possible.”
While noting the state’s growth, Lee said he still believes conservation efforts are key to retaining Tennessee’s charm.
“How do we balance record growth with a plan to protect our natural resources?” Lee said. “You start by rejecting conventional wisdom that says you cannot do both. To grow Tennessee, we have to conserve Tennessee.”
Mainly, the governor laid out his new economic agenda, pushing the talking points of past years’ successes.
“Together, over the last six years, we have recruited more than $40 billion in capital investment that has resulted in 234,000 new jobs,” Lee said. “Tennessee is a top contributor to our nation’s economy because of our willingness to adapt and welcome emerging industries.”
He proposed sending the Tennessee Department of Transportation an additional $1 billion, and underlined support for innovation in all sectors and especially in energy.
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“The Volunteer State is on track to be the epicenter of energy innovation, and it couldn’t happen at a more crucial time,” he said, criticizing what he described as the federal government’s neglect of energy policy. “As a result, we’re staring down the barrel of an energy crisis with an electrical grid that is on the fragile verge of being completely overwhelmed. … So Tennessee’s ambition to lead in nuclear innovation is much bigger than just competing with other states. This is about securing the future of America.”
Lee pledged $10 million to the state's Nuclear Energy Fund and $50 million to the TVA's Clinch River Nuclear Site — for which the TVA applied for an $800 million federal grant.
While critical of the Biden administration, Lee praised President Donald Trump and the creation of the Department of Government Efficiency — a legally dubious office under the direction of billionaire Elon Musk that is now cutting government programs.
“Limited government is knowing how to do more with less,” Lee said. “More bureaucracy does not mean better service. Businesses already know this — government should do the same.”
Lee — whose background is in private business, having run his family’s home-services company prior to his election in 2018 — has long cited business as a prime example for how the state should function. He continued with the comparison in Monday’s address.
“Just like a business innovates to better serve their customer, or science innovates to save lives, or an athlete innovates to change the game, this is a time for us to innovate to create a brighter future for Tennesseans,” Lee said.
In a scathing “prebuttal” address released Friday, House Democratic Caucus Chair John Ray Clemmons (D-Nashville) said after 14 years of Republican legislative control, “families are less safe and less secure.”
Gov. Bill Lee gives the 2025 State of the State address
“Instead of focusing on the basics and governing responsibly, Tennessee’s governor and Republican legislators have chosen a different path for our state,” Clemmons said. Though Democratic leadership remained in the chamber during Lee's address Monday night, roughly a dozen House and Senate Democrats — including Reps. Justin Jones, Shaundelle Brooks and Jason Powell of Nashville — walked out in protest.
“They have abandoned true fiscal conservatism in favor of handouts to the wealthy and payouts for special interests. They’ve doubled our state budget, grown our state government bureaucracy, increased our reliance on federal funding, and shifted an unprecedented financial burden to local governments.”
Clemmons added that Democrats’ focus is on getting back to basics like eliminating the grocery tax and lowering health care and child care expenses. He also stressed new infrastructure and public school investments.
The 114th General Assembly’s regular legislative session is ongoing, with more than 1,400 pieces of legislation filed. Several bills have already been introduced on first and second reading, and committee meetings are set to heat up in the coming weeks.
Lee’s administration is set to present his 2025-2026 budget for the first time to the Senate Finance Committee Tuesday morning.
Read Lee's remarks in full at this link.
