In his recent State of the State address, Tennessee Gov. Bill Lee presented a budget of $59.5 billion for the fiscal year 2025-26. The funds will support a range of initiatives, including economic growth and education. Lee highlighted his administration’s focus on responsible fiscal management, enabling strategic investments across several sectors, as per the Governor’s Office website.
For the upcoming year, Gov. Lee announced a $35.6 million increase to the state’s reserves, bringing the Rainy Day Fund to a record $2.2 billion. The budget also includes tax relief and economic opportunities. Notable allocations include $45.8 million for the Rural Development Grant Fund to revitalize rural areas and $25 million for FastTrack grants to attract new businesses. Housing and infrastructure will also receive significant support, with $1 billion for road projects and $60 million for affordable housing, especially in rural areas.
Education is a key focus of Gov. Lee’s budget. Public education will receive $198.4 million for teacher bonuses, and $244 million will support the Tennessee Investment in Student Achievement (TISA) formula. In higher education, a $12 million TennesseeWORKS Scholarship will cover tuition at technical colleges, and $52.8 million will support the outcomes-based funding formula.
Gov. Lee’s budget includes $95.5 million for Shared Savings to improve services for the elderly and disabled, and $24 million for a Department of Health initiative to address unmet dental service needs. The budget also includes $130 million for the Violent Crime Intervention Fund to support local law enforcement. In conservation, $100 million is allocated for a water resource plan for Duck River, and $52 million is earmarked to create five new state parks. Agriculture and energy will also receive funding, with $25 million for the Farmland Conservation Fund and $50 million for the Small Modular Reactor Grant Fund to support nuclear energy development.
