NASHVILLE, Tenn. --For the first time in four years, state employees will be getting a raise.
That's what Tennessee Governor Bill Haslam said in his first ever state of the state address from the capital building in Nashville.

Governor Haslam walks in and addresses the 107th general assembly.
He said we've had several months of economic growth, but tough choices lie ahead.
The state has over a billion dollars less to work with this year.
There will be 1180 fewer state jobs next year -- 90 percent will be eliminating unfilled positions.
But -- the budget proposes a 1 point 6 percent salary increase for all state employees.

As expected, Governor Haslam also addressed teacher tenure reform.
He said there should be tenure after a 5 year period instead of three.
And there should be periodic reviews to keep teachers in the classroom.

Governor Haslam says no more taking from rainy day fund.
So TDOT is cutting 5 million dollars from the budget, the Department of Health spending drops 1.7 percent, Tenn Care goes down 2 point 1 percent, and higher education reduces 2 percent.

The governor also took a minute to recognize Knoxville's own Trevor Bayne!
The Daytona 500 winner is, the youngest ever at 20 years old.
The governor said Trevor's a game changer in Tennessee who represents fulfilling dreams and aspirations.

Others recognized by Governor Haslam - an outstanding Tennessee teacher, Elaine Harper and LT William Anderson who was awarded the bronze star for combat in Iraq with the 278th.

-----UPDATE------

NASHVILLE, Tenn. (AP) -- Tennessee Gov. Bill Haslam is preparing to present his first state budget plan to Tennessee lawmakers.

The Republican governor, who is scheduled to lay out his spending proposal Monday evening, has warned that that the state budget will shrink by more than $1 billion because federal stimulus money is running out this year.

While the state's revenue collections have begun to improve, they are nowhere close to making up the losses incurred during the recession. Haslam estimates that tax collections won't match 2008 levels until about 2014.

Haslam has said many of the cuts were already planned by his predecessor, but that further reductions will be necessary. While the cuts will be tough, Haslam said he wouldn't describe his plan as "dire."

In the governor's words: "I'd call it realistic."

(Copyright 2011 by The Associated Press. All Rights Reserved.)