Gov. Bill Haslam proposed a $31 billion spending plan that would raise pay for state workers by 2.5 percent, fund a new science building at Middle Tennessee State University and cut more than 1,100 state jobs across Tennessee.

Haslam also proposed spending increases for TennCare and public education, as well as putting $50 million back into the state's "rainy day fund." But the governor also recommended shrinking the total state budget by 2.7 percent to account for falling federal contributions to the state budget.

In a budget proposal released just before his second State of the State address, Haslam said the state had largely bounced back from the depths of the recent recession and would post revenues that are actually higher than their previous peak during the 2006-2007 budget year.

"The good news is we've experienced stronger than anticipated revenue," he said in a briefing to reporters Monday morning. "The flip side of that is we're just now getting back to where we were in 2007."