As expected, lame duck Governor Don Sundquist's proposed 2002-2003 budget unveiled Wednesday would require $1.2 billion in new revenue, a 12 percent increase over last year's budget. His plan to raise the money will be sent to lawmakers Thursday.

Few on Capitol Hill expect much support for the proposed budget. Even Sundquist alluded to the low odds his budget would be passed during his State of the State speech to the General Assembly Monday night.

"Is it the only budget we'll come up with? No," Sundquist said. "Is it the only one I'll approve? No. But we've got to put political gain aside and put the future of Tennessee first."

New spending in the proposed budget includes $179.1 million for public education, $136.9 million for higher education and $114.4 million for TennCare. In all, Sundquist proposes $686 million in improvements. The balance of the $1.2 billion would cover the shortfall Sundquist and other legislators say exists in the state budget.

The new spending for public education includes $70 million for Sundquist's "Reading Initiative," which passed but wasn't funded by the legislature last year. The program aims to have all children reading by grade 3, provide pre-school for 4-year-olds and offer incentives to attract better teachers to Tennessee. Sundquist's budget also earmarks $45 million to fully fund the Basic Education Program and $41 million to increase teacher pay. Another $80,000 is proposed to provide for public charter school legislation.

The bulk of spending proposed for higher education would be used to raise employee salaries, recruit and retain quality faculty, address maintenance needs and increase financial assistance for students.

TennCare increases would include $89 million to cover the cost of capitation rate increases for managed care organizations and behavioral care organizations, a pharmacy inflation increase and increased dental services. In all, Sundquist's budget would provide $1.9 billion for TennCare, up from $1.6 billion in actual expenditures in 2000-2001.

Close to $9 million in new spending is included for homeland security measures.

Over $15 million would be used to improve economic development in the state.

Other highlights of the Governor's proposed budget include a five percent salary increase for state employees, $5.5 million more for state parks and a $103 million deposit into the rainy day fund.

The governor's only proposed budget cuts were $50,000 from labor and workforce development and $500,000 from general services.

Only the state funded portion of the budget was unveiled Wednesday. Finance Commissioner Warren Neel said it more accurately reflects how state taxpayer dollars are being spent than the over $18 billion total budget.

"It illustrates how our limited state revenues are used to leverage federal funds and provide services that touch the lives of every Tennessean, everyday," Neel said. "This document cuts through the red tape to show Tennessee taxpayers the tremendous return they receive for their state tax dollars.