NASHVILLE, Tenn. (AP) — Republican Gov. Bill Haslam has signed Tennessee’s $33.8 billion annual budget plan into law.

Haslam spokesman David Smith said the governor on Monday signed the appropriations legislation that establishes spending priorities for the spending year that starts July 1.

The plan does not include the first installment of a $2.8 billion plan to extend health insurance to 280,000 low-income Tennesseans. Haslam’s Insure Tennessee proposal would have had state hospitals cover the $74 million state share to draw down the money, but fellow Republicans in the Legislature twice rejected efforts to allow the governor to proceed with the deal.

The budget does include about $166 million in economic incentives for Volkswagen even though some lawmakers had chafed over labor activity at the German automaker’s plant in Chattanooga.