TENNESSEE — The Tennessee General Assembly passed a $58.3 billion fiscal year 2026-2027 budget as Governor Bill Lee marked the close of his final legislative session on April 23, 2026. The spending plan directs funds to K-12 education, the state's nuclear energy ecosystem, transportation, healthcare and conservation.

"When I first became Governor, I was hopeful about what we could accomplish in partnership with the General Assembly to serve Tennesseans. Over eight legislative sessions, we've passed strategic measures to invest in education, strengthen our workforce, improve infrastructure, and secure our state's position as a leader in next-generation nuclear energy. We've accomplished much together, and I'm deeply grateful to the members of the General Assembly who have worked alongside us to deliver real results for people across our state," Lee said.

The budget directs $339 million to public education, including funding for the Tennessee Investment in Student Achievement formula, summer learning camps and raising starting teacher salaries to $50,000. Another $155 million expands Education Freedom Scholarships by 15,000, bringing the total to 35,000 for the 2026-2027 school year. The plan also includes $40 million for facilities improvements at public charter schools, $20 million for K-12 facilities and maintenance grants, $10 million for K-12 safety grants, and $3 million to expand the school-based behavioral health liaison program. Smaller education grants include $1 million for the Niswonger Foundation's tutoring program for grades 1 through 8, $1 million for Teach for America, $500,000 for CodeCrew in Shelby County, and $450,000 for the Governor's Early Literacy Foundation Imagination Library.

For higher education, the budget provides $350 million to construct a new College of Medicine Interdisciplinary Building at the University of Tennessee Health Science Center in Memphis, $71.7 million for capital maintenance, $39.4 million to fully fund the outcomes-based funding formula, $10 million for the Governor's Investment in Vocational Education program supporting nuclear workforce education, and $3 million for Next-Gen Academies at Tennessee Tech University for nuclear and cyber technologies.

Transportation receives $400 million to expedite road projects and fund new projects across rural and urban areas, $165 million to renovate rest areas and welcome centers, $81.2 million for the Transportation Equity Fund to support infrastructure needs for commercial and general aviation, and $1.5 million to bring more nonstop international flights to Tennessee. The budget also allocates $40 million for a bridge reconstruction project in Montgomery County to support Korea Zinc's $6.6 billion manufacturing investment, which the state has identified as the single-largest capital investment in state history.

Other allocations include $230 million to TennCare to cover increasing costs associated with medical inflation, higher prescription drug prices, Medicare payments and increased utilization, $125 million for targeted capital projects and to expand models from the Rural Health Transformation Program, $30 million for Tennessee zoos, $25 million for the Tennessee Entertainment Commission for incentive grants for the state's music and film industry, $20 million for the Tennessee Housing Development Agency to incentivize public-private partnerships for workforce housing development and rehabilitation, $20 million for the Rainy Day Fund, $15 million for the Rural Development Fund to support business development and infrastructure planning in rural communities, and $8 million to expand the Tennessee Youth Employment Program. The Rainy Day Fund deposit brings reserves above $2.2 billion, the largest in state history.