Enacted Budget – Fiscal Year 2026
On May 21, Tennessee Governor Bill Lee signed the state’s fiscal 2026 budget that appropriates $59.5 billion in all funds, an increase of 1.6 percent over fiscal 2025 (as cited in the 2024-2025 Fact Book). The revenue forecast projects general fund revenues of $19.2 billion in fiscal 2026, an increase of 2.0 percent over the revised fiscal 2025 estimate. The budget invests $35.6 million in the state’s Rainy Day Fund, bringing reserves to nearly $2.2 billion, the largest in state history.
The enacted budget makes investments to improve infrastructure, invest in education, strengthen the workforce, and support innovative approaches to serving Tennesseans. The budget invests in the state’s infrastructure needs and maintenance projects at commercial and general aviation airports. In education, the budget provides additional funds for growth in the education formula including teacher pay raises, summer learning programs, fast-growing districts, school safety, and paid parental leave for Local Educational Agency employees; the budget also supports capital improvements at higher education institutions. To support strong and healthy families, the budget enhances long-term care services and supports for older adults and people living with disabilities; reduces turnover in the child care workforce by increasing pay and rewarding greater education; covers child care for more working families; continues a pilot project to address unmet dental service needs; and increases bed capacity at a regional mental health institute. The budget invests in public safety by establishing Downtown Public Safety Grants; supporting evidence-based strategies to improve public safety; adding state troopers and support staff; and expanding the Statewide School Resource Officer Program Grant. The budget also invests in conservation, agriculture, energy, and provides additional resources for disaster relief.