Restart and migrate database once before all phpunit tests. Optionally, use a tratit to restart between each test.

bootstrap-phpunit.php

<?php

use Illuminate\Contracts\Console\Kernel;

require __DIR__ . '/../vendor/autoload.php';

// Initialize Laravel application
$app = require __DIR__.'/../bootstrap/app.php';

$artisan = $app->make(Kernel::class);

$artisan->bootstrap();

// php artisan test:restart-database
$exitCode = $artisan->call('test:restart-database', [
    '--ansi' => true,
]);

// Print the command's output
echo $artisan->output();

// If the command errored, exit with error
if ($exitCode !== 0) {
    exit(1);
}

database.php.diff

diff --git a/config/database.php b/config/database.php
index 9184f0c..d486dec 100644
--- a/config/database.php
+++ b/config/database.php
@@ -54,6 +54,21 @@ return [
             'engine' => null,
         ],
 
+        'testing' => [
+            'driver' => 'mysql',
+            'host' => env('DB_HOST', '127.0.0.1'),
+            'port' => env('DB_PORT', '3306'),
+            'database' => env('DB_DATABASE', 'forge').'_test',
+            'username' => env('DB_USERNAME', 'forge'),
+            'password' => env('DB_PASSWORD', ''),
+            'unix_socket' => env('DB_SOCKET', ''),
+            'charset' => 'utf8mb4',
+            'collation' => 'utf8mb4_unicode_ci',
+            'prefix' => '',
+            'strict' => true,
+            'engine' => null,
+        ],
+
         'pgsql' => [
             'driver' => 'pgsql',
             'host' => env('DB_HOST', '127.0.0.1'),

phpunit.xml.diff

diff --git a/phpunit.xml b/phpunit.xml
index 5273873..5f1a6b1 100644
--- a/phpunit.xml
+++ b/phpunit.xml
@@ -1,7 +1,7 @@
 <?xml version="1.0" encoding="UTF-8"?>
 <phpunit backupGlobals="false"
          backupStaticAttributes="false"
-         bootstrap="vendor/autoload.php"
+         bootstrap="tests/bootstrap-phpunit.php"
          colors="true"
          convertErrorsToExceptions="true"
          convertNoticesToExceptions="true"
@@ -23,13 +23,13 @@
         </whitelist>
     </filter>
     <php>
-        <env name="APP_ENV" value="testing"/>
-        <env name="APP_KEY" value="base64:gvhlk/E8jhHhcgHPzKR5XCdu3i30wIZScndosFMbGws="/>
-        <env name="DB_CONNECTION" value="testing"/>
-        <env name="BCRYPT_ROUNDS" value="4"/>
-        <env name="CACHE_DRIVER" value="array"/>
-        <env name="SESSION_DRIVER" value="array"/>
-        <env name="QUEUE_DRIVER" value="sync"/>
-        <env name="MAIL_DRIVER" value="array"/>
+        <env name="APP_ENV" value="testing" force="true"/>
+        <env name="APP_KEY" value="base64:gvhlk/E8jhHhcgHPzKR5XCdu3i30wIZScndosFMbGws=" force="true"/>
+        <env name="DB_CONNECTION" value="testing" force="true"/>
+        <env name="BCRYPT_ROUNDS" value="4" force="true"/>
+        <env name="CACHE_DRIVER" value="array" force="true"/>
+        <env name="SESSION_DRIVER" value="array" force="true"/>
+        <env name="QUEUE_DRIVER" value="sync" force="true"/>
+        <env name="MAIL_DRIVER" value="array" force="true"/>
     </php>
 </phpunit>

RestartDatabase.php

<?php

namespace App\Console\Commands;

use Illuminate\Console\Command;
use Illuminate\Support\Facades\DB;

class RestartDatabase extends Command
{
    /**
     * The name and signature of the console command.
     *
     * @var string
     */
    protected $signature = 'test:restart-database';

    /**
     * The console command description.
     *
     * @var string
     */
    protected $description = 'Command description';

    /**
     * Create a new command instance.
     *
     * @return void
     */
    public function __construct()
    {
        parent::__construct();
    }

    /**
     * Execute the console command.
     *
     * @return mixed
     */
    public function handle()
    {
        $dbName = DB::getDatabaseName();

        if (!preg_match("/_test$/", $dbName)) {
            $this->error("Command 'test:restart-database' expects the database name"
                . " to end in '_test'  to avoid deleting real data. The current"
                . " database is '$dbName', something may be misconfigured.");
            return 1;
        }

        $tables = $this->listAllTables();

        if (count($tables)) {
            $this->deleteTables($tables);
        }

        $this->call('migrate');

        $this->call('passport:install');
    }

    /**
     * List all tables of the current database.
     *
     * @return array
     */
    protected function listAllTables()
    {
        $rows = DB::select('SHOW TABLES');

        return array_column($rows, 'Tables_in_'.DB::getDatabaseName());
    }

    /**
     * Delete tables of the database.
     *
     * The deletion is wrapped in a transaction to avoid
     * making any deletions if something fails.
     *
     * @param array $tables
     * @return void
     */
    protected function deleteTables(array $tables)
    {
        DB::beginTransaction();

        DB::statement('SET FOREIGN_KEY_CHECKS = 0');

        DB::statement('DROP TABLE '.implode(',', $tables));

        DB::statement('SET FOREIGN_KEY_CHECKS = 1');

        DB::commit();
    }
}

RestartsDatabase.php

<?php

namespace Tests;

trait RestartsDatabase
{
    /**
     * Define hook to restart the database before each test.
     *
     * Will be called from CreatesApplication::setUpTraits().
     *
     * @return void
     * @throws \Exception
     */
    public function restartDatabase()
    {
        $this->artisan('test:restart-database');
    }
}

TestCase.php.diff

diff --git i/tests/TestCase.php w/tests/TestCase.php
index c58ad54..d9d2faf 100644
--- i/tests/TestCase.php
+++ w/tests/TestCase.php
@@ -9,4 +9,24 @@ abstract class TestCase extends BaseTestCase
 {
     use CreatesApplication;
     use DatabaseTransactions;
+//    use RestartsDatabase;
+
+    /**
+     * Boot the app's testing helper traits.
+     *
+     * Extends how Laravel sets up its default testing traits.
+     *
+     * @return array
+     * @throws \Exception
+     */
+    protected function setUpTraits()
+    {
+        $uses = parent::setUpTraits();
+
+        if (isset($uses[RestartsDatabase::class])) {
+            $this->restartDatabase();
+        }
+
+        return $uses;
+    }
 }

TODO: throw Exception if APP_ENV !== testing or DB::getDatabaseName() is not a database ending in _test. Something like that, to avoid running this trait in a database which is not meant to be thrown away.

Done!