Passage of Balanced Budget Clears Path to Adjournment
By State Senator Page Walley
Our General Assembly gave its final approval to a $58 billion budget for 2026-2027 fiscal year, delivering a fiscally responsible plan that meets the core needs of Tennesseans while safeguarding taxpayer dollars. Passage of the budget signals the General Assembly is very near to adjourning, with all committees except Finance now closed for the year.
In addition to passing the budget, the Senate advanced a wide range of legislation last week, including efforts to increase private school vouchers, modernize healthcare regulations, strengthen public safety, and support infrastructure and workforce development across the state.
General Assembly passes state’s $58 billion budget
Last Thursday, the Tennessee Senate and House passed the state’s $58 billion budget for the 2026-27 fiscal year, fulfilling the General Assembly’s only constitutional duty.
This year’s spending plan reflects a continued return to more typical economic growth following several years of record-high revenues. The budget reaffirms the General Assembly’s longstanding commitment to fiscal responsibility while making targeted investments to strengthen Tennessee’s economy, improve education, and support families across the state.
This budget reflects the steady, fiscally responsible approach we’ve taken over the past decade. We’ve kept spending under control while continuing to invest in those areas of paramount importance to our citizens, such as education, healthcare, and public safety. This discipline has resulted in structurally balanced budgets year after year putting Tennessee in a strong position to provide for the people of Tennessee not just today, but in the years to come. I appreciate the work of each of our members to keep us on this path.
The legislative amendment redirects $282.4 million from the administration’s original proposal to fund $276.4 million in legislative priorities, while maintaining a strong bottom line to account for potential uncertainties.
Lawmakers also repurposed funding to advance key initiatives supporting hospitals statewide and addressing critical community needs.
Grant Pool for Community Services
The General Assembly created a $42 million grant pool with nonrecurring funds for important emergency and community services. These grants are in high demand each year, with applications consistently exceeding available funding. Local communities have repeatedly expressed strong support for the program, reinforcing its value in meeting essential needs and strengthening public services statewide.
● $20 million for Volunteer Fire Departments
● $5 million for Emergency Medical Services
● $5 million for Volunteer Rescue Squads
● $5 million for local museums and capital improvements
● $5 million for senior centers
● $1.5 million for local fairs
● $500,000 for courthouse renovations
Rural Hospital Support and Healthcare Investments
Lawmakers made significant investments in hospitals by providing $137 million from the General Fund to help hospitals, particularly in rural areas, with uncompensated care. By directing General Fund dollars towards this effort, hospitals will have the flexibility to use these resources for critical capital improvements, an option not permitted under the Rural Hospital Transformation Act. This approach not only helps stabilize rural healthcare providers but also strengthens their ability to expand services and meet long-term community needs.
Years of fiscally conservative budgeting have put Tennessee in a strong position to meet today’s needs while planning confidently for the future. Even as revenue growth has leveled, our disciplined approach has kept the state on solid financial footing. This budget makes significant investments in healthcare and hospitals, ensuring providers have the resources to serve patients and strengthen care across our state. We remain committed to improving healthcare in Tennessee and finding innovative ways to support it. This budget delivers on that commitment.
Infrastructure, Housing and Rural Investment
● $400 million for new and existing transportation projects, bringing TDOTs total General Fund allocations to $5 billion
● $165 million to renovate and replace Tennessee’s rest areas and welcome centers
● $81.2 million to support aviation infrastructure, with $25 million of that added by the General Assembly
● $15 million to the Rural Development Fund for business development and infrastructure
● $20 million to create the Community and Workforce Housing Innovation Pilot Program to support construction of workforce housing
● $20 million for upkeep and infrastructure of shortline railroads
Economic Opportunity and Fiscal Stability
● $20 million investment in the Rainy Day Fund, bringing total reserves to more than $2.2 billion – the largest in state history
● $8 million to expand Tennessee Youth Employment Program
● $25 million to the Tennessee Entertainment Commission for continued support for Tennessee’s music and film industries
● $750,000 for Learning Blade, Career Blade and Ready for Industry programs to improve workforce readiness for STEM/CTE careers
This budget puts Tennesseans first by investing in the priorities that matter most to families across our state. It strengthens our education system, as well as increases the number of private school vouchers. At the same time, it makes meaningful investments in public safety and community development, while staying true to Tennessee’s longstanding tradition of fiscal discipline.
Education
Public Education
● $339 million for public education, including additional TISA funding, summer learning camps, and raising starting teacher pay to $50,000
● $20 million for K-12 facilities maintenance
● $40 million for facilities improvement at public charter schools
● $3 million to expand school-based behavioral health liaison program
Expanding School Choice
● $112 million to expand school choice to more Tennessee families by increasing Education Freedom Scholarships available, to serve a total of 35,000 students
Higher Education
● $350 million to build a new College of Medicine Interdisciplinary Building at the University of Tennessee Health Science Center in Memphis
● $71.7 million for capital maintenance at higher education institutions
● $10 million for the Governor’s Investment in Vocational Education (GIVE) program to support nuclear workforce education, as recommended by the Nuclear Energy Advisory Council
● $3 million for Next-Gen Academics at Tennessee Tech for nuclear and cyber technologies
● $39.4 million to fully fund the outcomes-based funding formula
● $3.5 million for Corrections Education Investment Initiative to prepare incarcerated individuals for reentry success
● $3.7 million to fund specialty units of higher education
● $3.2 million to support the Gatton College of Pharmacy at ETSU
Children and Families
● $34.5 million to Department of Children’s Services (DCS) to assist with reducing caseload ratios
● $10.7 million to enhance staff safety at DCS facilities that accommodate delinquent youth
● $15 million for capital project and maintenance grants to YMCAs across Tennessee
● $500k to nonprofit partner Jonathan’s Path for housing teens in foster care
● $2 million for summer food program for children
Safe Neighborhoods
● $44.2 million to bolster the Governor’s Response and Recovery Fund which provides support to individuals, businesses, and communities after natural disasters
● $3.7 million for grants to continue recovery efforts from Hurricane Helene
● $50 million for public safety grants to enhance crime prevention and increase public safety in Memphis
● $9 million to create the Tennessee Safe Initiative Task Force within TBI
● $83 million to Tennessee Department of the Military for construction of a new Army Aviation Support Facility in Rutherford County
● $37.5 million for salary increases and creation of an additional 50 State Troopers and related support staff positions to improve public safety across the state
● $932k for digital forensics law enforcement training in East Tennessee
● $1 million to establish the Volunteer Firefighter Vehicle Grant Program
● $1.5 million to replace three fire engines lost to Hurricane Helene
● $20 million for capital improvements at the West Tennessee and East Tennessee Regional Juvenile Justice Centers
● $1.7 million recurring grants to non-profit partners that combat human trafficking and support survivors
● $400k to nonprofit partner Thistle Farms for workforce and housing for survivors of human trafficking
● $1 million recurring grant to non-profit partner Men of Valor for faith-based reentry support for incarcerated individuals
● $250k recurring grant to Lipscomb University’s LIFE Program, which provides higher education opportunities for incarcerated individuals
● $500k recurring grant to non-profit partner Tennessee Prison Outreach Ministry, which provides faith-based reentry support for individuals and their families
Conservation and Culture
● $81.6 million to create three new Tennessee State Parks
● $1.6 million for the Subsurface Sewage Disposal Program, reducing waiting times for permitting services and oversight
● $1.1 million to support further enhancement of Tennessee’s electric grid
● $10 million for Clark Center Park for future use as new state park
● $5.5 million for a new Memphis Art Museum
HOPE Treatment Act
Last week the Senate passed my bill, Senate Bill 2149, to advance treatments to address the epidemic of veterans suicide as well as opioid addiction in general. The legislation enacts the “Helping Open Pathways to Effective (HOPE) Treatment Act” and creates the Council on Emerging Behavioral Health Treatments to oversee the state’s participation in emerging treatment research.
We have people suffering from addiction and mental health challenges who deserve better options. This bill puts Tennessee at the table in a serious research effort while making sure it’s done safely and responsibly.
We expect to conclude this session of the General Assembly this week. I will be sharing more about the conclusion of the session and the budget investments made in our Senate district in the coming weeks. Thank you for allowing me to represent you as our state senator. Please continue to reach out to me at sen.page.walley@capitol.tn.gov or 615-741-2368.
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